Ten things I hate about how UK recycling is (not) funded

plastic-bottles-115082_1280Hatred is quite a strong emotion to feel for inanimate evidence notes intended to show that a company has paid towards recycling its packaging, but bear with me and I’ll explain what’s got me so wound up.

Back in 1997, the Packaging Recovery Note (PRN) scheme was devised as the way for the UK to meet EU packaging recycling targets. Businesses above a certain size that fill packaging or put products on the market, as well as raw material producers and converters, usually belong to compliance schemes that purchase PRNs from domestic recyclers or packaging export recovery notes (PERNs) from exporters to show that a proportion of the material they’ve put on the market has been recycled on their behalf.

The scheme has been a great success in allowing the UK to meet targets at minimal cost to producers, but it has been much less successful in some fundamental ways.

In truth, hate probably is an exaggeration of how I actually feel about the PRN system. But here are ten aspects of it that deserve some scorn (and a considerable overhaul):

1. Producers do not cover anything like the full cost of recycling
The idea behind producer responsibility is simple: those who create products and packaging – and can, therefore, control their design – should cover the full costs of environmental impacts throughout their lifetimes. However, a 2014 pan-European study estimated that the UK PRN system sees producers contribute a derisible ten per cent.

2. Local authorities (and, ultimately, taxpayers) are left to pick up the bill
Costs for recycling packaging, therefore, fall mainly on councils (who have no direct control over the amount of waste that’s produced), and, ultimately on residents (regardless of whether or not they take steps to reduce their use of packaging). At a time of continued austerity, when councils have seen their budgets slashed by at least 26 per cent since 2010, this is increasingly unreasonable.

3. It gives businesses little incentive to design out waste
Producers should be rewarded for designing less wasteful packaging, using recycled materials and communicating with their customers about the right thing to do, but none of this is encouraged by the UK’s system. We could learn from France where producers of hard to recycle packaging pay a 50 per cent surcharge, while producers of unrecyclable packaging pay double.

4. The system is not transparent
There is no obligation in the current regulations to track funding or provide any sort of financial audit trail, meaning, amongst other things, that it is impossible to know what PRN revenue is used for and making the system susceptible to manipulation.

5. PRN prices are highly volatile
Graphs showing PRN prices over the past two decades look like physically impossible roller coasters, with revenue fluctuating wildly depending on how easily targets are met in any given year. This is bad for businesses as well as local authorities, as it makes it impossible to plan for expected outgoings or revenue.

6. There is no mechanism to address material price volatility
Unfortunately, it’s not just PRNs that fluctuate in price; material prices are also volatile, so the economics of recycling don’t stack up consistently. A better producer responsibility system could address this through a price stabiliser that would adjust depending on market conditions.

7. It is unclear if the system will allow us to meet future targets
PRNs can be issued for either household or commercial packaging, but, as most commercial waste is already captured by the system, improvements must be on the household side. Given the well-documented flatlining of household waste recycling rates (now stuck at around 44 per cent) and council funding cuts, this seems unlikely to happen.

8. The system is difficult to regulate
In addition to questions of transparency, some have questioned whether the amount of packaging actually put on the market is higher than that reported. Moreover, the cash strapped Environment Agency polices the system and, although it has sanctioned 240 retailers in the past six years, enforcement takes the form of voluntary arrangements where offending organisations are made to pay money to charities. This is not as strong a deterrent against fraud as criminal prosecution would be.

9. The system favours export…
Since PRNs were introduced in 1997, there has been a much greater increase in export than in the domestic reprocessing of recyclable material, including a fourfold surge in the first three years. The reason is simple: PRNs are issued at the point of reprocessing – at the very end of the recycling process – but PERNs are issued at the point of export – when material could still contain contaminants incorrectly counted as recycled.

10. …which has drastically harmed domestic processors
UK reprocessors often struggle to obtain material of high enough quality, as collections of sub-par material can’t be wiped out if export offers such an easy, lucrative outlet. This means UK businesses are saddled with contaminated materials, which affects their bottom line and has been implicated in the failure of several world-leading UK reprocessors.

All this has left us vulnerable to chaos from China’s National Sword programme, which has seen our main outlet for recyclate export cut off. Until January of this year, China took around half of the world’s paper and plastic waste, but it has now shut its doors to 24 types of ‘foreign garbage’, including unsorted papers and all plastic. This is already leading to material stockpiles here in the UK and there are concerns that this will have to be landfilled or burned as we do not have the domestic infrastructure to handle it, seeing as growth in the reprocessing industry has been anything but encouraged by the current PRN system.

If there’s anything good to be said about this list of shortcomings, it’s simply that they are being increasingly acknowledged. Some businesses and parts of government have joined local authorities, reprocessors and environmental organisations in calling for reform. As luck would have it, this consensus comes just at the point we have the perfect opportunity to change things in the government’s renewed resources and waste strategy, due later this year. Rather than tinkering around the edges, we need bold reform that will mean there is nothing to hate – or regret – in future about whatever system we end up with.

This article first appeared on Footprint 

3 comments

  • Eve Kendall Wolfe

    I’m not sure hate is too strong a word, actually. ‘Polluter Pays’ should be a meaningful guiding principle.

  • Libby, I have long argued that the PRN system is broken, it was a great idea using a market instrument, but no one else in Europe took up the idea.
    You do however miss out the vital part that consumers can play in this though, we put up with this packaging, we buy it, we should pay for it to be recycled, it is not fair to ask a single household to pay for a family of 7 recycling, and remember recycling costs money, it is on par with or in some cases more than the cost of landfill or EFW.

  • Excellent article. As one of the beleaguered UK reprocessors I am not sure ‘hate’ is too strong a word for this system! Probably 30% by weight of plastic packaging of what has been exported over the years will have been landfilled, burnt or polluted the oceans, and this has all counted towards our recycling target. A real step change is required for us to take responsibility for our collection systems and to drastically improve the quality of our waste stream in order to facilitate real recycling within our own borders.

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