The PRN system: Introducing a free market to packaging waste

collection

Angus Macpherson

Managing Director, The Environment Exchange

Eco-Invest 2012, Kiev

3 October 2012

Outline

• Setting the scene

• What is the challenge?

• The Packaging Cycle

• What is a PRN?

• How do you price a PRN – Theory and Practice

• What has the system achieved?

• Conclusion

Why me?

• Involved with Producer Responsibility in the UK from 1997

• Consultee to the Office of Fair Trading in the UK on Producer Responsibility

• Founder member of the CO2 Emissions Trading Group in the UK

• Involved in the development of the Renewables Obligation in Europe and the UK

• I was asked!

Setting the scene1. Local Authorities have a statutory obligation in the

UK to collect waste from domestic households and dispose of it.

2. Domestic households all pay council tax to the Local Authority.

3. Businesses pay rates to the Local Authority but are responsible for the costs of their own waste disposal.

4. All inputs into landfill sites are taxed by National Government.

5. No funds from Producer Responsibility regimes go directly to National or Local Governments.

What is the challenge?

1. To prove that the target percentage of packaging handled in the UK has been recycled.

2. Target percentage = total packaging waste recycled / total packaging waste handled.

3. Steps to achieve it:

a. Find out how much packaging is handled in the UK

b. Find out how much UK packaging waste is recycled

c. Stimulate growth to the requisite target

The Packaging Cycle

C o m p lian ceS ch em es

T h e E n viro n m en tE xch an g e

P ackag in gMan u factu rer

P ackag in g C h ain/ I n d u stry

D o m esticC o n su m er

W asteC o m p an ies

Lo calAu th o rit ies

Lan d fill

R ecycled

R eco very /W aste to E n erg y

P rim ary R aw MaterialS eco n d ary R aw Material

P ackag in g F lo wMin o r P ackag in g F lo wS ale o f E vid en ce (P R N s)

2 6 %m in im u m

2 6 %

4 8 %m axim u m

R ep ro cesso rs

What is a PRN

Evidence issued by a reprocessor accredited by the appropriate Agency:

of the acceptance of packaging waste for reprocessing

And:

required by obligated companies and compliance schemes as their representatives as evidence of compliance

And:

required by compliance schemes as evidence of investment in new reprocessing and collection activities

Pricing the PRN

P R I C E O FR E C Y C LE D

C O MMO D I T Y

C O S T O FW AS T E

D I S P O S AL

C O S T O FW AS T ED I S P O S AL

P R N

P R I C E O FR E C Y C LE DC O MMO D I T Y

P R I C EO F

P R N P R I C E O F P R N

T I ME

£ 's

T O T AL C O S TO F D I S P O S AL

O FR E C Y C LE D

C O MMO D I T Y

1 9 9 8

T O T AL C O S T O FD I S P O S AL O F

R E C Y C LE DC O MMO D I T Y

to d ay to m o rro w

© Enviromac 1998

Conclusions

1. The PRN system has risen to the challenge.

2. The PRN system has contributed to packaging waste recycling growth.

3. The PRN system has injected substantial funds into the UK recycling infrastructure delivering genuine environmental benefits.

4. The PRN system has proved itself flexible when crisises have arisen.

What is t2e?The Environment Exchange:

• Internet based Integrated Marketplace provides:

Information– SmartTransaction – SimpleSettlement – SafeDispute Resolution - Solutions

• Launched PRN marketplace 28 November 1998

• Traded 1million PRN tonnes in 2009 and 2010

• Launched UK Collected Recovered Paper Market - 11 March 2011

• Opens China Delivered Recovered Paper Market - 6 November 2012

Thought

"The best way to predict the future is to create it."

Dr Peter F Drucker

Rankin Clarke Professor of Social Science and Management at Claremont Graduate University"The most influential observer in modern business history" - Training & Development Magazine