nerf meeting – the prn system

NERF meeting – The PRN system

19th March 2013

© Valpak All Rights Reserved

Agenda

Introductions and purpose of the meeting

UK system Original design intentions

Market dynamics

Cost comparisons with other countries

Questions for discussion

UK system operation


Introduction

UK system designed in close consultation with industry in mid 1990’s

Key principles: Market based, using and incentivising existing infrastructure

Competing schemes

Shared responsibility

Includes both household and commercial packaging to meet targets

Designed to meet national targets at minimum long term cost to producers

Refinements gradually introduced to improve operation and legislation: On line NPWD system

5 year target visibility (apart from 2010, 2011)

Improved enforcement


The UK system for packaging

Finished Goods- Packaging- Other

products

Reprocessors and ExportersW.M.C.s

C+I Material

L.A. Material

Packaging Waste

Packaging recycling has always occurred to the extent it is economically viable



Legal responsibility for increasing rates passed to producers


products


C+I Material

L.A. Material

Packaging Waste

RecyclingObligations

1997 Packaging Waste Regs.

UK Business



Additional funding injected to provide impetus


products


C+I Material

L.A. Material

Packaging Waste


Recycling Obligations(Data and £££)

Data andEvidence


UK Business

£££RecyclingEvidence(PRNs)

Compliance Schemes



Increasing activity at each stage of the chain


products


C+I Material

L.A. Material

Packaging Waste


Recycling Obligations(Data and £££)

RecyclingEvidence(PRNs)

Data andEvidence


UK Business

£££

£ end markets

£ collection

processing

£ material price

Compliance Schemes


System operation: the market balance

Equilibrium helped by -long term target visibility

-long term contracts

Low cost PRNs

Less investmentin recycling

Shortage of PRNs

High cost PRNs

More investmentin recycling

Surplus of PRNs

Tightening of market due to higher

targets or market bottlenecks

PRN prices are NOT directly related to the cost of recycling Focus on lowest cost sources of extra marginal tonnage System has met targets every year


PRN market dynamicsSurplusShortage

+5%

£20

£5

0%-5%

£200

“In balance” material specific price

PRN price

General recycling price

Potential for rapid rises if perceived shortfall

Cost of PRNs driven by Net collection and recycling cost PRN supply & demand

Europe: Comparing the Costs of Compliance


Multi-Material Scenario

Obligated company imports and sells to the general public:

800,000 steel cans of tomatoes (av. 34g)

500,000 aluminium cans of soft drinks (av. 20g)

150,000 bottles of wine (av. 370g)

19,250 cardboard boxes (av. 240g)


How do the Costs Compare? (2012)

Average

Poland

UK Historic Ita

ly

UK 2012

Belgium ROI

FranceSpain

Austria

Germany

-

5,000

10,000

15,000

20,000

25,000

30,000


Multi-Material Summary

In this scenario the average cost for meeting recycling/recovery obligations in Europe is £6,050.43

Complying in the UK in 2012 costs just £2,445 Making the UK nearly 2.5x cheaper than the average

In 2012 the prices for glass and steel recycling evidence in the UK were much higher than normal

Assumed average 2012 priceGlass = £40/tonne

Steel = £15/tonne

On an average year the UK costs would be around £1,330


Glass Cost Comparison: 200g beer bottle (pence)

Ireland France Poland Italy Belgium UK Historic Spain UK 2012 Austria Germany0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40


New Targets (%)

2012 2013 2014 2015 2016 2017

Paper 69.5 69.5 69.5 69.5 69.5 69.5

Glass 81 81 81 81 81 81

Aluminium 40 43 46 49 52 55

Steel 71 72 73 74 75 76

Plastic 32 37 42 47 52 57

Wood 22 22 22 22 22 22

Total Recycling 68.1 69 69.9 70.8 71.8 72.7

Total Recovery 74 75 76 77 78 79


Plastics Challenge

Total plastic collected in 2017 needs to be 330kT more than 2012

Plastic is highly diverse

Need to collect 25% of the untapped resources, including:


Scale of the Challenge

Bottles C&I Film PTT HH Film C&I Rigids0

100

200

300

400

500

600

700

Plastic Recycling Tonnages

2011 Achievement

2017 Re-quirement

2017 Total Available

K to

nnes


How This Will Affect You

2012 2013 2014 2015 2016 2017150

200

250

300

350

400

450

Obligation


Glass: Packaging on to the Market (Estimates)

* Estimate assumes 1% growth per annum

2009 2010 2011 2012 2013 2014 -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000 2,686 Kt 2,767 Kt2,740 Kt2,713 Kt 2,795 Kt 2,823 Kt


Glass Reprocessing 2012

Q1 Q2 Q3 Q4 -

100,000

200,000

300,000

400,000

500,000

600,000


Glass Cullet Prices: 2012 (£)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec0

5

10

15

20

25

30

35

40

“I continue to be impressed by the excellent level of support

and guidance that Valpak offer me.

The staff are extremely professional and helpful and are always quick to respond to any

queries that I have.”Cayne Andrews, Nisbets Plc “We’ve worked with Valpak for

a number of years and have found them to be an efficient, knowledgeable and friendly organisation to work with.”

Phil Slingsby, KCOM Group Plc

Duncan Simpson

Director of Sales and Marketing

[email protected]

01259 725355

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