The British Plastics Federation’s Recycling Group (BPF RG) has said that the packaging recovering note (PRN) system needs urgent reform before more UK recyclers become victims of the current market failure affecting members such as Closed Loop Recycling (CLR).
Reductions in oil and commodity polymer prices coupled with strong demand from global low cost economies for waste plastics have undermined confidence in the UK plastics recycling industry putting jobs and economic security at risk.
BPF RG believes that the current situation could have been avoided had the UK government taken decisive action and implemented the proposals it published last year in its manifesto.
The proposals focused on identifying drivers to achieve a sustainable future for the plastics recycling sector by introducing two fundamental changes in the PRN system.
The first is a split on the plastics packaging recycling targets, to distinguish recycling in the local market (UK and EU) from that which is exported outside Europe. This would be achieved through the existing PRN/PERN mechanism, leading to a progressive weighting towards increased local recycling year-on-year.
Roger Baynham, chairman of the BPF RG – “We have effectively reached a fork in the road. Do nothing, accept that the UK recycling sector will struggle to compete with global low cost economy…”
Not only could this deliver the best environmental outcomes, but it would also encourage and incentivise innovation and investment – enabling the UK to future-proof markets for plastic waste.
The second relates to an “offset” proposal, which calls for a modification to the producer responsibility framework to encourage retailers and brand owners to increase the use of recycled polymers.
In the case of CLR, the BPF RG believes that had a PRN offset model been adopted, the dairy sector and retailers would have thought twice before switching back to virgin and losing their relief from what is a hugely unpredictable cost under Producer Responsibility obligations.
Moreover, had the Split Target escalator been adopted, CLR would be in an increasingly strong position to compete against demand from exports for waste plastic bottles.
Roger Baynham, Chairman of the BPF RG said: “We have effectively reached a fork in the road. Do nothing, accept that the UK recycling sector will struggle to compete with global low cost economies and become increasingly dependent on such markets for our waste or implement changes which can deliver successful and investable long term recycling businesses which create green UK jobs as part of a sustainable circular economy. Events at CLR show that this is a decision which can no longer be ducked”.
Closed Loop Recycling
Closed Loop Recycling, the UK’s largest recycler of plastic milk bottles, recently announced that without financial support from the industry or government, going into administration is “inevitable”, after the slump in global oil prices have forced clients to cut back on the amount of recycled plastic they purchase.
CLR produces more than 80% of recycled plastic used in milk bottles in the UK. Prices that can be achieved for recycled material has fallen nearly 40% in the past nine months, due to a drop in global oil prices.
CLR’s Chris Dow said in a statement that WRAP has a “solution” on the table.
It says it would cost just 0.1p per two-pint plastic milk bottle to secure the future of the company, a cost that, according to a YouGov survey, 68% of adults supported. (See CIWM Journal Online story)