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These are some of the questions we are commonly asked:
Why did Government allow only reprocessors to issue PRN's?
Are PRN's issued free of charge by reprocessors?
Q. What does PRN Stand for?
A. Packaging Recovey Note <<back
Q. What is it for?
A. The PRN is a mechanism established in the Regulations as the means by which an obligated company or compliance scheme will demonstrate to the Envirmonment Agency that they have met their recycling obligations under the law. Each PRN establishes that a particular tonnage of packaging has been recycled.
The PRN has a second, no less vital role. This is to act as a financial instrument to help fund the increase in recycling demanded by the EU Directive and the British Regulations. <<back
Q. Why did Government allow only reprocessors to issue PRN's?
A. Experience in other countries demonstrated that if this type of control were exerted, for example by collectors of waste packaging, programmes would become collection driven rather than market driven and system costs would soar as collected, waste materials not needed in the marketplace were merely stored. The EU's butter mountain would be burried under a mountain of expensively collected waste packaging.
By allowing reprocessors to issue PRN's there will always be a market for all the material recycled and there will be timely and adequate investment in reprocessing capacity. And, just as importantly, compliance costs in the UK should be far lower than in such countries as Germany, which has a collection driven process. This has so proved to be the case. <<back
Q. Are PRN's issued free of charge by reprocessors?
A. No <<back
Q. Why Not?
A. Remember - in order to meet the new recycling targets we must recycle materials and products which previously were uneconomic to recycle. That means that a subsidy must be paid into the recycling loop to incentivise recycling.
Organistations (e.g. local authorities) setting up cost-effective programmes to collect and sort household packaging must have their costs covered. Recyclers must be offered an incentive to invest in new cleaning and reprocessing capacity. And recycled materials must be marketed at a price which potential customers are prepared to pay.
So the reprocessor charges an amount for the PRN which can be used to incentivise adequately the growth of these three vital components:-
a) Collection and sorting
b) Reprocessing capacity
c) End use markets <<back
Q. If I, as an obligated company under the Regulations, offer to deliver waste packaging that I have collected to a reprocessor, will I get the PRN?
A. That is your choice. You can insist, however the PRN becomes part of your commercial contract with the reprocessor. You can expect to receive the commercial value of the material you deliver. If you also want the PRN, you benefit from the fact that you have performed one of the three tasks which the PRN has to incentivise. So the PRN should cost you a little less than normal. Alternatively, you could let the reprocessor keep the PRN but negotiate a higher price for the material you deliver.
It will all be part of a normal, commercial negotiation. <<back
Q. How much will a PRN cost?
A. This varies widely depending on the material concerned, ie:- plastics, steel., paper, glass, aluminium and the price level of the relevant prime (virgin) material.
The value of the PRN reflects the cost, at any moment in time, of achieving the recycling of that particular material. As a guide, in the first three years of the Regulation's operation this value has varied between £30 and £185 / tonne for plastics. Year 2001 is likely to be the most difficult year yet which costs projected toward the top end of this range.
Other materials range from £10 to £20 per tonne. This difference is often more than offset by the fact that plastic packaging is much lighter than packaging made from other materials and performs functions which no other material can.
It is also expected that as the PRN market tightens and as targets for recovery & recycling are increased each year, the PRN price will rise steadily. Equivalent modes of compliance in other European countries cost on average over £200 per tonne.
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