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PACKAGING MARKET INSIGHTS


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At that time there was much concern within the sector over whether the UK 2020 obligation could be achieved, with industry working collaboratively to develop proposals for Government to provide solutions to address the widely anticipated reduction in reprocessing. Most lockdown restrictions have been lifted and their immediate impact is evident from the revised UK 2020 obligation data and reprocessing data for quarters one and two, published by the Environment Agency last week.

It appears that fears of COVID 19 restrictions impacting on packaging waste recycling have not materialised. Paper and wood were the only packaging materials for which there was less reprocessed (including exports for reprocessing) in quarter two 2020 than in the same period in 2019. Paper, wood and in addition, steel, were also the only materials for which reprocessing (including exports for reprocessing) were lower in quarter two 2020 than in quarter one 2020. Most local authority kerbside recycling services continued during lockdown and the media reports of increased consumption of alcoholic beverages at home appears to have increased UK recycling volumes. The quantity of aluminum and steel used beverage cartons (UBCs) reprocessed in quarter two 2020 increased notably when compared with quarter one 2020 and quarter two 2019.

Whilst understanding the impact of COVID 19 on reprocessing is important, it only provides part of the picture with respect to the UK’s likely achievement of its 2020 packaging waste obligations.  The UK obligation, which is calculated from the packaging handled by registered producers in 2019, is required to complete this. The environment agencies adopted regulatory positions that enabled producers who could demonstrate that COVID 19 had prevented their submission of accurate packaging data to, either submit an estimate, or to register late in 2020, meaning that the initial UK obligation data was not envisaged to be particularly robust. All producers have since been required to register accurate data. This has increased the UK obligation by 4% from that previously reported. The current UK 2020 obligation is still lower than that of 2019 for all materials, except aluminum, glass and wood. This means that the demand for PRNs is softening and may reduce further if the business failures that are feared, result in obligation being lost.

All packaging materials are currently on track to meet the UK’s 2020 obligation if current performance is sustained. Considering the expected position at the start of quarter two 2020, this is cause for optimism, however compliance is not yet guaranteed. Softening of plastic PRN prices is likely to affect supply and for reasons that are not fully clear, the relatively poor performance in paper recycling year to date will impact on the proportion of the general recycling target met by this material.

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