Packaging recovery note (PRN) prices will start at “much lower levels” in 2021, compliance specialists have predicted, after the publication of provisional packaging data for the third quarter of 2020.
The data suggests that all materials are on track to meet their estimated obligations for the year, which means there will be “significant” carry over PRNs for next year, when the targets will be higher.
Published on 27 November on the National Packaging Waste Database (NPWD) website, the data shows the overall volume of material collected to meet targets during the three months from July to September.
This means the data does not include figures from November when England was placed into a national lockdown.
While paper and glass are down on the same period last year, as shown below, there were particularly strong showings for glass other, aluminium and steel. Wood has recovered after what was described as a “poor” Q2.
In October, the optional monthly packaging reports showed the Q3 targets were likely to be met (see letsrecycle.com story).
The figures published by the Environment Agency are thought to be more reliable, however, as quarterly reporting of data is mandatory.
David Daw, project analyst at compliance scheme Valpak, explained to letsrecycle.com that the figures showed an increase of about 6,000 tonnes from the provisional data last month. He was confident that PRN prices would be lower next year.
“It is likely that this will mean that PRN prices for 2021 will start at much lower levels than they started 2020″
“It is likely that this will mean that PRN prices for 2021 will start at much lower levels than they started 2020, even allowing for the recent announcement of higher targets for most materials by the government as packaging reported by obligated companies could fall further,” Mr Daw said.
He added: “It is still vitally important though that reprocessors and exporters ensure they get accreditations complete as soon as possible if they not done so already. We believe the agencies have tightened up on export destination information required to send recycling to OECD countries, the added scrutiny could lead to delays in them being able to issue PERNs next year and valuable recycling evidence could end up being lost.”
With materials on track to hit targets, there could also be a significant amount of carry over PRNs from 2019 which can contribute to next year’s figures, which could be significant as targets have been risen for most materials.
Martin Trigg-Knight, head of packaging at Clarity Environmental, told letsrecycle.com the industry was “ahead of where it needs to be”, but said he remained cautious about what the future holds.
“With only two months left of the year, the verified quarterly data, alongside the latest monthly data, report that some grades have already achieved their targets when carry over is taken into account,” he said.
“Looking ahead to the new year, external forces outside of the industry will remain a factor when considering how easily the UK may achieve the higher 2021 and 2022 targets. But if production continues at positive levels in November and December, some grades will have the benefit of starting January in a positive position, with significant carry over.”
Andrew Letham is operations manager at the PRN trading platform The Environment Exchange (t2e). He was also positive about the data and said plastic PRN prices had continued to fall.
Mr Letham told letsrecycle.com: “Q3 was the largest quarterly return since Q4 2015 as materials adversely impacted by Covid 19 in Q2 such as paper and wood posted strong returns, with other materials continuing in excellent supply.
“Although the overall obligation is currently short of where many predicted it will finish the year, most materials now look like they will comfortably meet their obligations, with PRN prices softening to reflect this position.
“Plastic prices have fallen 90% since the initial release of the Q2 data having temporarily dipped below £5 for the first time since 2014.
“The 169,587 tonnes of wood reported as recycled in Q3 is the largest return since 2011 and puts wood back on track to meet the target after a poor Q2.
“As buying for 2021 has opened at significantly higher prices to current 2020 levels, many sellers have opted to stockpile tonnage to move in the month of December for an increased subsidy, which will likely result in high carry-in levels for 2021.”
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Source: letsrecycle.com Packaging