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Packaging market review: Progress in achieving the 2021 obligation

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Using the data published by the Environment Agency on 26th November 2021, the UK appears on track to meet its 2021 obligation for all materials. For glass remelt, at current average year-to-date reprocessing rates, it is likely that this will require the use of December transitional PRNs that were carried forward from 2020 into 2021.

The table below shows the current UK obligation, the quantity and the average quarterly recycling tonnage achieved in Quarters One to Three 2021 and finally, remaining obligation, which is provided both as the tonnage of recycling required in Quarter Four 2021 to achieve this and as a percentage of the overall 2021 obligation.

As the data demonstrates, the 2021 wood obligation has already been achieved, with sufficient surplus PRNs generated to meet over a quarter of the UK general recycling obligation, which currently stands at 539,323t. Paper, aluminium and steel also look to be in strong positions to contribute to the 2021 general recycling obligation and / or provide carry-forward PRNs from 2021 into 2022 that can be used to meet the 2022 UK obligation.

Looking Forward to the 2022 Compliance Year

The 2022 targets are higher than those of 2021 for every material except wood, with the increases in paper and aluminium being particularly notable, as shown in the table below:

Provided that current recycling tonnages are maintained, when combined with the likely carry forward of December 2021 transitional PRNs into the 2022 Compliance Year, in principle, the 2022 targets should be achievable for most materials. However, this is rarely as straightforward as the latest data suggests, given the diverse range of factors that can impact recycling, with those to watch in 2022 likely to include:

  • Plastic – whilst implementation of the Plastic Packaging Tax should stimulate the UK demand for recyclate and reduce reliance on volatile and often short-term recyclate markets, any delays in commissioning of the new UK reprocessing capacity may affect the achievement of the higher plastic recycling target.
  • Paper and wood – there is a risk that some reprocessors will not re-apply for accreditation in 2022 in light of low PRN prices for these materials at the close of 2021
  • Glass – any restrictions in the hospitality sector, affecting the proportion of glass bottles suitable for remelt and aggregate recycling applications can adversely impact achievement of the glass re-melt target.
  • Steel and paper – the well documented increase in UK and global energy prices has potential to impact on the recycling of all packaging materials, with steel and paper recycling being particularly susceptible as extremely energy intensive processes.

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