Higher plastics PRN prices predicted

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May 2012

Plastic PRN prices could rise to between £35 to £65 a tonne following the increase in plastic packaging recycling targets to 57% by 2017. Currently, plastic PRNs sell for around £5 a tonne.

Mr Simpson of Valpak said “The plastics targets proposed are controversial and many in the plastics industry believe they are unachievable and costly. We think there will be a shortfall in this target but not to a huge extent – enough so that plastics PRN prices rise to between £35 and £65 a tonne.”

Pressure has been put on plastic PRN prices for 2012 due to Chinese New Year and availability issues of sea freight containers for the export of packaging materials in Q1 2012.

The increased packaging recycling targets for plastics as well as aluminium and steel, alongside a new split target for glass, were confirmed in the 2012 Budget on 21 March 2012 (see news article).

Mr Simpson “Gently rising targets would be no better than flat targets. Investment would shrink, PRN prices would remain flat and many would be paying more in administrative costs than in actually supporting recycling.”

Andy Doran, who chairs the Resource Association, said “Higher targets for plastics [recycling] need to come with reform of PRN and PERN to level the playing field for UK plastic reprocessors. The present situation where PERN is issued on what is exported, not what is reprocessed, will only mean that higher targets will fuel export markets and not benefit the UK."

Resource Association Chief Executive Ray Georgeson said ”The Government could take the opportunity to send a strong investment signal to UK reprocessors, especially in plastics, by lowering the PERN value for exported mixed plastics to 60% of the weight of mixed plastics exported. This would help deliver a level playing field for UK reprocessors, who can only issue a PRN for the weight of reprocessed material they actually produce, which because of the often contaminated nature of the material can be as low as 50% of the incoming feedstock.”