Yesterday the Environment Agency released the interim Q3 packaging figures for 2019, showing strong performance for aluminium and plastic
It is encouraging to see that there has been an increase in the amount recycled for plastic and aluminium, which were previously at risk of non-compliance. The table below shows the figures across all materials:
The first column in the above table shows the ‘Forecast 2019 total requirements’, the amount of PRNs required to meet compliance in 2019. Importantly this is a forecast as not all producers have registered yet, meaning the precise total requirement for the year is not yet known.
‘2018 carry over’ in the second column details the amount of PRNs generated in 2018 that were assigned to the 2019 compliance year. These can therefore be subtracted from the 2019 total requirements to give us the forecast net requirements for 2019, shown in the third column. These are the amounts we actually need to achieve this year.
By dividing the net requirements by four we obtain the ‘Forecast 2019 quarterly requirements’, a useful benchmark of whether or not we are on track as we progress through the year and quarterly data is released.
What does the data mean for producers?
Here we take a look at each material to see how the most recent data impacts producers:
Aluminium has seen a positive increase in Q3 and gets the UK pretty much back on track to meet compliance. It is encouraging to see that new reprocessor and exporter accreditations have been accepted for 2019 to help ease the pressure in the market. The UK will still need to ensure recycling rates remain high for Q4 to provide assurance that compliance will be met this year.
Q3 has been the strongest quarter year-to-date and subsequently has taken the pressure out of the market in the short term. Similarly to aluminium, plastic requires high levels of investment in Q4 to guarantee that material is processed at current levels to ensure that the recycling target is met.
The recent increase in the price of steel PRNs has suggested a shortfall in the market. The Q3 data shows a further slowdown of recycling in this material, however the carry over and the strong performance in Q1 and Q2 has meant there is a low risk of non-compliance although with the recent increase in price it is one to keep an eye on.
Glass has performed well all year and there are no immediate concerns with this material and the UK should see a strong carry out of PRNs into 2020, which will provide a good head-start for meeting targets for 2020.
Paper has been performing well all year and has reduced the reliance on other materials to perform well to contribute towards meeting the general recycling obligation. There are no immediate concerns with this material and similarly to glass, the UK should see a large carry out of PRNs into 2020.
We continue to see wood performing well above the levels required to meet the wood target, which has significantly impacted the fall in paper price over the last few weeks as wood contributes towards meeting the general recycling obligation. We foresee no problems here and PRN prices have been on a significant downward trend since the beginning of the year.
Recovery is again well on track for this year and we expect to see no issues with the supply of recovery PRNs for the rest of the year.
Ecosurety will continue to communicate the changes in the PRN market throughout the year and the impact on producers. If you would like to speak to a member of the Ecosurety team about the impact of compliance on your business, please contact us on 0333 4330 370.
Sandeep joined the procurement team in April 2019 and works in the role of procurement manager. Sandeep builds and maintains strategic relationships with our key service partners, whilst creating new relationships and initiatives to improve UK recycling.