PRN prices continue to rise

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PRN Overview

Over the last quarter packaging recovery note (PRN) prices have risen sharply. Compared to prices 12 months ago for the same packaging types, it is clear that many of the prices have rocketed in recent times. Could this be a common occurrence for the next few years; continued increases for all packaging materials?

Whereas metal, glass and paper have a traditional end user market, plastics are still in the development stages for recycling opportunities. As such, plastic PRNs have had a considerable problem. At present, the majority of plastic waste is exported. The new plastic recycling target has increased over the next five years to levels that will make it extremely difficult to achieve. The following scenario could potentially occur, causing plastic PRN values to explode.

 

Current practice and possible future

At the moment, the UK recycles 600,000 tonnes of obligated plastics packaging annually, of which 170,000 remains in the UK and 430,000 tonnes is exported. Currently, the export PRN money does not support the recycling infrastructure in the UK and as such, an increase in existing targets will inevitably result in more plastic packaging materials being exported.

By 2017, using the 2013 targets, the UK will be required to recycle 1,218,000 tonnes of plastics, of which 170,000 tonnes in the UK and 1,048,800 tonnes for export.  With the added possible scenario of the export market slowing down, this would result in the UK requiring an end user market for over 1,000,000 tonnes of post consumer recycled plastics annually. If the capability to handle this much plastic recycling is not available, how can the industry cope with the increased volume over the next five years? If we consider the estimated increase of plastics PRN values for 2013 reaching up to £50 per tonne, that would seem a fairly reasonable rate for the next few years. However, these PRNs are likely to increase to astronomical rates as the market changes.

 

  For more information on PRN values and the changes in legislation and recycling targets, please contact Tim Hutchinson on 01642 466617 or by email on tim.hutchinson@rpsltd.com