The Future Of PRNs – Are Faster Horses Enough?

Peter Clayson, general manager for business development and external affairs at DS Smith, discusses Defra’s review into packaging recovery notes (PRNs) and their future in the UK.

 

When Henry Ford, founder of the Ford Motor Company, launched the first affordable production automobile, he famously went against public consensus and invested his reputation into an idea which many said would never catch on. Less than a decade later, nearly one million Model T units had rolled off production at the company’s Piquette Avenue plant in Detroit.

Commenting on the success of such a risky strategy, Ford explained: “If I had asked people what they wanted, they would have said faster horses.” Innovation meant the birth of the American motor industry.

Whether you agree with following a prophetic leadership vision or sticking by the merits of following customer feedback, Ford’s message of innovation for a better future is clear.

The Future Of Waste Management

At DS Smith, we appreciate how both micro and macro-economic forces will continue to change the waste management industry, and we understand the importance of looking to the future to embrace progress. As part of our Rehearsing the Future project, we even speculated on three hypothetical versions of the world in 2025 – all plausible, but different from today’s business environment.*

So, when Defra released the results of its review into UK packaging recovery notes (PRN) and the packaging recycling system, the vote to retain the current system inspired discussion into the scheme’s success to date – and its suitability for the future.

Understanding The Basics

In their existing form, PRNs are required by all businesses that place packaging into the supply chain and are large enough to be covered by the producer responsibility requirements of the Packaging Waste Regulations. PRNs allow businesses to demonstrate that they have met their obligations and have (either directly or indirectly) recycled waste packaging material into a new product. In this way, they form a key part of the Producer Responsibility Obligations Regulations (Great Britain), which have been in force since 1997.

The findings of Defra’s recent Post-Implementation Review (PIR), announced in July, concluded that the PRN system should keep its position as the national method for proving and reporting reprocessing rates. In fact, PRNs are likely to remain the preferred system until at least 2020 – when the industry will be experiencing the real impact of Brexit negotiations with the EU.

At DS Smith, we agree that the PRN system has met its intended targets. However, it’s not perfect. Thinking to the future, a number of reforms are needed as we move towards 2020. First and foremost, the PRN system needs to be considered within a wider national strategy to deliver a more circular economy

Evolution, Not Revolution

If we are to remain on track to meet 2030 municipal waste recycling targets, close monitoring of reprocessing rates is essential to ensure precise capturing of outputs. One criticism of the current PRN system is that it does not provide enough incentive for reprocessors to ensure accuracy is treated as an absolute priority.

This accuracy gap makes little difference when the UK is consistently meeting targets, but it could become problematic if not tackled in the future.

In addition, feedback from the wider industry highlights that the system appears to overlook costs incurred by local authorities. We need a financial framework that ensures that local authorities can provide the collection infrastructure needed to cope with increased recycling.  We need to look at the current financial model, not just around PRNs, but the whole collection infrastructure – to see if it is fit for purpose to provide the framework for increased recycling collections. If it isn’t we need to review what steps need to be taken.

One proposed idea to fund the packaging recycling system is to reduce the applicable de minimis level. Currently, the Packaging Regulations apply to all businesses with a turnover of more than £2 million and which handle more than 50 tonnes of packaging per year. However, according to recommendations outlined within the Producer Responsibility Review, that £2 million threshold could be increased.

This would reduce the overall obligated tonnage and eliminate the requirement to register and report data for smaller companies. By doing so, this would actually reduce the tonnage of packaging to which the Regulations apply.

Incremental Changes

As an industry, it’s crucial that we always have one eye on the future. That future should deliver increased recycling, but also better recycling – so that reprocessors are provided with quality raw materials for their production operations.

For paper mills, sourcing high quality fibres ensures optimum outputs. At DS Smith, as with any paper mill, our paper mills can only make paper from paper fibres – not plastics, glass, metal, or any other recyclable material that can sometimes end up in paper and card recycling collections. As such, we are strong advocates of the separation of recycling streams at the point of collection. Early segregation of recyclables gives us the best chance of ensuring the highest quality of paper for recycling and our customers products

In an ideal world, as material reprocessors, we would want all recyclable material to reach us contamination-free. Unfortunately, in reality, dealing with contamination in recycling streams is an everyday occurrence. However, segregating recycling streams at the point of collection helps to improve quality. As such, DS Smith advocates moving to a standardised materials collection system (as advocated by WRAP in the Framework for Greater Consistency in Household Recycling in England report) but based on the separation of the paper fibre at source.

Looking To The Future

Moving forward, it will be vital that we see more consistency with recycling across regions and nations. We must also make it easy and accessible for people and businesses to recycle. This is particularly important as the rise of e-commerce means that more packaging is ending up in the hands of consumers, where recycling rates are significantly lower than in business.

Rather than shy away from change, we should recognise the opportunity provided, and set our own waste agenda. It gives us the chance to implement systems and processes that will work most effectively for the UK One such area for development could be to put measures in place to trial charging for residual waste. Pay as you throw (PAYT) has been a contentious issue within the UK, but we need some reliable pilots on which to base future decision-making.

As waste producers, collectors and recyclers, we all want to recycle more. To achieve this, we must positively embrace change and realise opportunities to   provide the right environment for even better recycling.

For now, faster horses will suffice. For the future, maybe a Ford-ian approach is necessary.

 

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  1. Excellent thoughts on the way forward. It is crucial that the PRN system provides greater ring fenced funding and financial incentives to Local Authorities to increase both the quality and quantity of recycled materials. Finance will always be a crucial key to driving up standards and quality.

    The same applies to the producer of waste. As someone who has consistently argued for Local Authorities to have Pay as you Throw (PAYT) powers it is regrettable that it was a deregulatory Conservative Government that removed the legislation that would have allowed Local Authorities to experiment with PAYT schemes. It is a wonderful example of Alice in Wonderland Government that you remove powers, put in place and requested by Local Authorities to test PAYT, before they have been given the chance to use them and then claim it is a deregulatory success. It is simply National Government wasting money once again. Evidence from around the world shows that PAYT works and a scheme could be developed that far from penalising the public would reward those who adopt and apply best practice by providing rebates for those who throw away less waste or add to the quality of recyclate collected.

    For too long National Governments have tried to micro manage the work of Local Authorities. It is time to release the shackles and allow real innovation around the whole PAYT agenda to begin and to link it to rewarding innovative Local Authorities as part of a change to the way the funds from PRNs are used.

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