Local authorities (LAs) should be able to benefit from packaging recovery note (PRN) revenue if they collect high-quality material for recycling, a consultation into packaging and battery legislation has suggested.

The suggestion came as part of a consultation run by the Department for Environment, Food & Rural Affairs (Defra) from 27 March to 22 May, which sought opinions on government plans to amend regulations for producer responsibility for batteries and packaging waste.

The proposed changes to legislation follow sustained calls from the recycling industry, and the plastic industry in particular, that the UK’s PRN system is in urgent need of reform.

The government yesterday (13 October) released a summary of responses it received to the consultation, which aimed to assess ways of reducing the burden of producer responsibility obligations on business by improving the effectiveness of the schemes.

It also sought evidence to help assess the case for changing the business target for the recycling and recovery of plastic waste packaging, and to explore the opportunities for increasing links between LAs and the producer responsibility regime for packaging.

Fifty-three responses were received by Defra, the majority of which were from either producer compliance schemes (PCSs) or trade associations. All proposals to amend regulations were generally supported by respondents to the consultation.

These included removing the need for battery and packaging PCSs to produce operation plans setting out how they will comply with legal obligations and enabling the signing-off of information regarding scheme activity to be delegated by an ‘appropriate person’.

These amendments to the Producer Responsibility Obligations (Packaging Waste) Regulations 2007, the Producer Responsibility Obligations (Packaging Waste) Regulations (Northern Ireland) 2007 and the Waste Batteries and Accumulators Regulations 2009 will now be laid before Parliament for implementation from 1 January 2016.

Comments on the PRN system

Respondents commented that short-term price volatility in the PRN market makes budgeting difficult. A mechanism should be introduced to create a more stable short-term value for PRNs, such as a default minimum value for plastic PRNs of £20 per tonne. On the same theme, ‘significant known target increases can have significantly less adverse impact than uncertainty’ as to what targets will be set, so respondents tended to favour progressive, clearly defined targets.

Concerns were expressed about double-counting – PRNs being issued more than once for the same material due to the new classification of PET flake as reprocessing, and plastic packaging from the Ireland being issued PRNs having already been issued recycling credits in their country of origin.

Other criticisms of the system were its lack of transparency on what funds were spent on and the risk of fraud when PRN prices are high.

Some respondents argued that any changes to the PRN system should divert more funding to local authorities in return for delivery of high-quality waste for recycling. It was also suggested that if collection targets were introduced alongside the existing recovery and recycling targets, local authorities could issue collection notes that could be bought by compliance schemes and individual compliers.

Compliance scheme partnerships with local authorities

Regarding the opportunities for compliance schemes to work with LAs to increase collection of household packaging waste, respondents suggested that LAs should be able to benefit from PRN revenue if they collect high-quality material for recycling. LAs could then ‘potentially negotiate reduced costs with the waste industry’ with the domestic recycling industry becoming stimulated by limiting revenue to LAs from PRNs and not PERNS (packaging export recovery notes).

They noted, however, that commercial, economic and legal reasons mean it is currently impossible for schemes to work with LAs, with a legislative driver, such as collection targets along with existing recycling and recovery targets, needed to change this.

Furthermore, LA contracts with third parties lasting up to 25 years, ‘effectively isolate compliance schemes or producers from direct contact with LAs’.

However, any steps to bring LAs into the PRN system ‘must involve industry engagement’, one respondent stated, as there were fears that producers would have to pay because of LAs that have over-contracted long-term waste disposal contracts for tonnage that the LA does not have.

Examination of plastic packaging targets

The packaging regulations set a business target for plastic of 52 per cent in 2016 and 57 per cent in 2017 based on the amount of packaging Defra estimated would be placed on the market by obligated producers.

However, the Plastic Flow report, an industry-wide study carried out by Valpak Consulting and the Waste & Resources Action Programme (WRAP), suggested in December 2014 that Defra had ‘significantly over-estimated the amount of plastic placed on the market’ – stating that the 2013 UK flow of plastic was 2,260,000 tonnes, 332,000 less than the previous estimate.

This would mean that obligated producers are legally required to recycle a higher proportion of plastic packaging placed on the market than previously thought.

Respondents generally supported the Plastic Flow report and stated that it was important to regularly reassess figures, and that while reassessing the targets would mean the UK would comfortably meet the 2017 target without the need to place an additional cost burden on producers, it could also results in a ‘more challenging growth curve to meet a significant rise in the EU target’.

Reducing the targets, it was suggested, would ‘reduce the income of the recyclers and increase the likelihood of further closures’, while raising the target would increase the cost to business across the whole of the UK.

It was also argued that maintaining the current recycling targets would not automatically create a significant additional producer responsibility burden if the collection, handling and reprocessing infrastructure capacity exists or is developed.

Read the full summary of responses to the consultation on Defra’s website or learn more about the problems of the PRN system from the perspectives of the plastics and aluminium reprocessing industries.