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Pennine Pack

Review of the PRN Market, June 2019.

In 2018 we were expecting turmoil in the packaging compliance market when China implemented its ’National Sword’ policy that restricts the import of waste materials. This has spilled into 2019 with uncertainty in most markets. Plastic PRNs have seen the most fluctuation. During 2018, our average cost for plastic PRNs in 2018 was £64.75, rising to around £150.00/t in Q1/2019, crossing £200.00/t during May peaking at £450/t (18th June) and dropping back to £250/t at the end of june.

Why do we have a problem?

Plastic PRNs have seen a difficult 18 months since China implemented its ‘National Sword’ policy to block the import of waste materials containing over 0.5% contamination.

0.5% contamination would be something like two A5 paper labels on a set of pallet wrap. To get below the 0.5% level, we would need to cut out both the paper labels, but at around 400g – 600g per pallet, you would have to cut out 4,000 A5 paper labels from one tonne of pallet wrap.

The Chinese Government wants to stimulate more recycling of plastic waste generated in China.

Prior to 2018, more than half of our plastic waste was exported to be recycled, most of it going to China. After the ban, waste material started to go to other countries in the Far East. By the end of 2018, many of these countries have banned the import of our waste and we are running out of places to send our rubbish to be recycled.

The PRN system is based on supply & demand; when there are plenty of PRNs, the price falls; if there is a shortage, the price will go up to encourage other recyclers to join in and make more PRNs available.

What is the problem?

In order to respond to the changing market we need to know how big the problem is. The next set of reliable data upon which we will be able to make reasonable judgements is likely to be released during the last week of July. If the numbers are sufficiently improved, prices will begin to return to more acceptable levels. If they have not improved, prices may continue to rise and we will review the situation again.

We want to assure you that we are working to achieve compliance at the best possible price for your company but we can not achieve this in isolation. While our turnover doubled last year, we beat the market in all materials bar one. Our plastic PRN cost in 2018 was £6.36 below the average market price (£64.75 Vs £71.11 T2E spot average).

This graph shows how quickly the price of plastic PRNs has gone up and is compared to the previous 4 years:

Plastic PRN Prices

Looking at recycling of plastic packaging :

  • The cost of Plastic PRNs is likely to account for half of all PRN costs this year, in spite of representing less than 15% of the number of PRNs needed.
  • There are 121 large plastics reprocessors & exporters registered this year (was 137 in 2018)
  • PRNs registered with the Environment Agency in Q1/2019 were 95% of the number registered in Q1/2018. This may have been aggravated by changes to the way the Environment Agency enforced rules at the start of Q1 but fluctuations of this size are not unusual.
  • In spite of the reduction in registered reprocessors and poor figures in Q1, Plastic PRNs traded by T2E during Jan – May were only 0.5% lower than Jan – May 2018 which is reassuring.
  • In Q1/2019 41% of our plastic packaging waste was recycled in the UK (in 2018, only 37% was recycled in the UK).

What does this mean in real terms?

Here is a simple cost model: For every 1000t of plastic that a business handles as ‘imported as an end user’ (you import and remove packaging), that company has to buy 810 PRNs (81% overall UK recycling & recovery target). This is made up of:

  • 555t plastic PRNs (55% plastic recycling target in 2019)
  • 64t recovery (up to 8% of 81%)
  • 196 ‘general’ (not material specific recycling. This is usually paper)

At our current estimated costs, if our average plastic PRNs cost is £350/t, this would give us a cost per 1,000t of plastic imported and unpacked of:

  • £192,500 = 550t plastic PRNS @ £350/t
  • £ 160 = 64t recovery PRNs @ £2.50/t
  • £ 3,920 = 196t paper PRNs @ £20/t
  • £196,580 / 1000t plastic imported.
  • £196.58/t

This is about 10p/0.5kg ‘palletwrap’ imported and unpacked

And for consistency, if you are using palletwrap in the UK to pack your products that are sold to someone who unpacks your products, the cost is about 8p/0.5kg ‘palletwrap’ pack/filled & sold.

If you have any questions or would like to discuss anything published here, please get in touch directly.

JM 17 June 2019

PENNINE PACK AND INVESTORS IN THE ENVIRONMENT WIN TWO AWARDS AT THE HOUSES OF PARLIAMENT

The GBN, a Yorkshire micro-business, has been presented with two Green Apple Awards earlier today in recognition of their Environmental Best Practice at the Houses of Parliament in London.

Two of The GBN’s divisions were recognised within their individual fields at the Awards: Investors in the Environment won the Green Champion Award for environmental best practice in the service industries for their work with companies, assisting them to reduce their environmental impact by the implementation of an Environmental Management System (EMS), with a real focus on practical implementation. Pennine Pack won a Bronze Award for best practice in the packaging and paper industries, helping companies to comply with packaging regulations whilst actively supporting the UK recycling industry.

Commenting on the awards, John Mooney, Director of The GBN said “We are thrilled to be recognised in areas where small businesses can often be overlooked. Collectively SME’s and micro-businesses can make a huge difference to our economy and supporting UK business is essential for the future” he added, “Investors in the Environment is brilliant for employee engagement and is extremely accessible for all businesses whatever their size or core business. Last year we helped our members to save the equivalent of just over 5,500t of CO2 emissions”.

Pennine-Pack’s Low Carbon Packaging Compliance Scheme, works across many different industry sectors helping companies to work beyond legal compliance, to reduce their carbon impact for waste and recycling, and it continues to be committed to supporting the UK recycling industry. Buying PRNs from Recyclers in the UK avoided emissions of just over 7,900t of CO2 because waste was recycled in the UK and not in China.

With regard to, Pennine Pack, John commented “We had the foresight in 2012 to see the inevitability of the recent changes in the waste recycling market. Therefore, last year, once China had made its position clear that it would no longer accept volume waste from other countries, our clients were already ahead of the curve using a domestic solution supporting the UK recycling industry.”

Climate Change penalties of £1.4million for 85 companies who did not follow the rules.

The Government recently updated their list of companies prosecuted for failing to comply with five different sets of climate change legislation. Click here for the original post.

EU Emissions Trading Scheme:

There were 16 prosecutions for failing to comply with Regulation 9, operation without a permit. Penalties ranged between £650 and £55,000.

There were 3 prosecutions for failing to comply with Regulation 41, Failing to surrender (buy) ‘allowances’ to offset their carbon emissions. Penalties ranged between £27,500 and £460,900. The largest penalty was to PUPL Realisation Limited (formerly Polestar UK Print Limited) which has since gone into administration and been dissolved.

EU ETS Aviation Trading Scheme

There were 43 companies penalised for failing to comply with the Aviation Greenhouse Gas Emissions Trading Scheme Regulations, with penalties ranging between £250 and £115,300.

Carbon Reduction Commitment

Nine companies were penalised for failure to surrender sufficient allowances for the 2015 to 2016 compliance year, contrary to Part 4 of the CRC Order 2013. The biggest penalty went to the only name we recognised on the list, Bet365 Group.

Energy Saving Opportunities Scheme

15 companies were penalised for failure to comply with an enforcement notice, contrary to Regulation 46(1) of the Energy Saving Opportunities Regulations 2014. Penalties ranged between £1,550 and £54,000. We recognised the names of a couple of on-line businesses on this list, including Ebay Gumtree and fashion chain Forever21.

Climate Change Agreements

Two businesses were penalised under the Climate Change Agreements (Administration) Regulations 2012. The penalties were small, £250 and £315, but the latter was issued to an individual or partnership and not a corporation so the name(s) has been withheld.

OK, it is not very sexy but the penalties amounted to over £1.4million for failing to comply with the Climate Change legislation!

Zero Waste Week – The David Attenborough effect.

There have been two consultations recently relating to plastics and packaging. The first was the usual humdrum we need to tweak the recycling targets for the amount of waste packaging that businesses must subsidise. It received 45 responses. It was fairly typical of the annual updates to packaging targets that we see nearly every year.

The second was posted after Sir David Attenborough’s Blue Planet was televised and sought opinions about the definition of single use plastics and the use of taxes to influence single use plastics. It received over 200 responses from trade associations, compliance schemes and businesses with an interest in the outcome. There were also 162,000 individual responses which may be a record for a consultation like this. The consultation one year earlier seeking views on the banning of microbeads only received 430 responses, but since the screening of the Blue Planet, public awareness has triggered a response that is several hundred times greater!

The response document from the Government says that they will:

  • Look at how taxes could encourage more recycled content. (The French Government have recently announced plans that will penalise virgin material / incentivise recycled content.
  • Look at how taxes can encourage more sustainable design of packaging and incentivise the use of packaging that can be recycled.
  • Consider taxes that will directly influence commonly littered items, such as coffee cups and take away containers, as well as measures to encourage them to be recycled.
  • ban or restrict the use of some items where plastic free alternatives are readily available and consultations are already planned for plastic stemmed cotton buds, plastic coffee stirrers and plastic straws.

This is also set against the background of the UN Environment ‘Single Use Plastics Roadmap’, EU Circular Economy and the WRAP lead Plastics Pact – in which The UK’s largest businesses have pledged to make significant improvements to their current performance

As long as the public pressure is translated into action at all levels, we should start to see progress every soon.

For our part, here in Hebden Bridge, we have just done our weekly fruit and veg shop from ‘Andy, the market trader’ with almost no packaging involved, just a couple of paper bags and our Pennine-Pack reusable cotton carrier bag made from recycled waste textiles.

Zero waste

The GBN events programme

All events free for PP / EC members, except 1st Feb where we have a discount code to get a discount if they book both sessions. please get in touch with John / Becky to reserve a place / access the discount code or go to the iie website for more details.

The GBN Events Programme

Clean Air Zones – Is this going to be the biggest change to motoring that we have ever seen?

Clean Air Zones – Is this going to be the biggest change to motoring that we have ever seen?

The UK has consistently failed to meet air quality targets to the point where both the European Union and environmental charities are taking the UK Government to court to help to prevent thousands of premature deaths associated with pollution. A significant proportion of this pollution comes from our use of cars, buses and lorries.

The UK is putting a framework into place to address the worst pollution hotspots through the introduction if Clean Air Zones (CAZ).

The driver behind the CAZ is to reduce air pollution which will have health benefits to the local population and so reduce pressure on the health service as well as comply with air quality standard legislation. A recent high court ruling says that local authorities must meet the targets in the shortest possible time. All affected Local Authorities are carrying out extensive modelling and analysis, to determine how much action they need to take in order to meet the targets.

The first to be introduced in the West Yorkshire area is likely to be in Leeds, but there are over 60 areas identified across the country which may also introduce CAZs, including all the other Local Authorities in West Yorkshire.

Local Authorities are charged with taking action to reduce pollution in areas where the local air quality is considered to be harmful to our health and the measures are likely to be different in each area; just enough to meet the targets.

We already have the Greater London Low Emission Zone (almost everywhere inside the M25). For all buses, coaches & lorries that do not meet the Euro IV emissions standard the charge is £200 per day to use a non-conforming vehicle in the Low Emission Zone. From 26th October 2020 when the charge will go up to £300 per day for buses and coaches over 5t and lorries over 3.5t if they do not meet the more stringent Euro6 standard. Vans and minibuses have to pay £100 per day if they do not meet the Euro 3 standard.

Enough about London. What is happening in Yorkshire? There are areas of significant local pollution in all 5 West Yorkshire authorities and each authority is looking at their options. Leeds City Council are the first authority to publish proposals.

The proposal for Leeds includes a CAZ around Leeds City Centre. This will extend all the way to the outer ring road, Pudsey to the west, Temple Newsam & Crossgates to the East, the M621 to the South and Meanwood, Chapel Allerton and Roundhay to the North.

Clean Air Zone Map Leeds

The proposed CAZ will cover buses, coaches, taxis, private hire vehicles and HGVs – but NOT vans and private cars¹.

If you drive a bus, coach, lorry or taxi which does not meet the current emissions standards you will have to pay a charge from 2020. The proposal is that this charge will be £12.50 per day for taxis and £50 per day for other vehicle types, although there are a number of exemptions proposed (eg for specialist vehicles like fire engines, if there isn’t a suitable compatible vehicle available, or if you are forced to make a diversion into the CAZ due to a road closure).

There will be no charge for vehicles which meet the current standards, and no charge for vans and private cars in the current proposals. The revenue from the charges will be ring fenced to be used to improve air quality.

Leeds City Council are lobbying for a reciprocal agreement between charging authorities, so that if you drive in a number of different CAZ’s on the same day you do not build up huge daily charge.

To support business which are based within the CAZ the council are proposing a mitigation package which includes grants of up to £15,000 for HGV owners and up to £19,000 for coach operators to retrofit their vehicles to become compliant. Initially these grants will come from a £220 million (UK Wide) fund which the government is making available to help businesses based inside the CAZ to become compliant.


¹When considering Clean Air Zones Local authorities have to follow a hierarchy of measures. For CAZ vehicle restrictions these are:

  1. Buses and Coaches
  2. HGVs
  3. Taxis
  4. Light Goods Vehicles
  5. Private Vehicles

Local authorities have to consider how many of these categories of vehicle they need to cover in their CAZ in order to meet the emissions targets. It is expected that in Birmingham they will have to charge for all vehicle categories in order to meet the targets coach operators to retrofit their vehicles to become compliant.

If Leeds City Council’s proposals are accepted by the government they could come into effect as soon as January 2020, with mitigation grants being available from early 2019.

Of course, Clean Air Zones are only part of the solution. These go hand in hand with other initiatives such as

  • investment in public transport infrastructure,
  • campaigns to reduce car use (eg car sharing, park and ride),
  • campaigns to encourage drivers to turn off their engines while queueing. (Heaven only knows why anti-idling devices are not fitted as standard on all new vehicles!)
  • to increase use of electric or hybrid vehicles, especially for taxis,
  • improved cycling and pedestrian routes and
  • other low cost tools such as optimising traffic lights.

Pennine-Pack is 20!

When the Pennine-Pack packaging compliance scheme was set up in 2008 by The Calderdale and Kirklees Green Business Network it had only 10 members. We now number over 100 members split between the original Pennine-Pack scheme, an offshoot that operates in Northern Ireland and Ethical Compliance. Ethical Compliance was launched in 2014 giving members the option to choose to buy UK only PRNs.

It is wonderful that 2 of the original members are still with us and almost half of our members have been with us in excess of 10 years.

We left the umbrella of the council’s support nine years ago but staying true to our roots, we continue to offer free environmental advice to businesses in West Yorkshire and across the UK, offering members a wide range of environmental services as well as the specialist services relating to Packaging Waste.

In September 2016, we took over the operation of Investors in the Environment in Yorkshire. This is an entry level environmental accreditation that focusses on a business's environmental performance ahead of the formal procedures required by other environmental management systems.

To celebrate our twenty years, we have invited our members to join us for a presentation in Leeds on 20th June when we will have Pennine-Pack’s founder, Graham Wiles and environmental expert and acclaimed author Tony Juniper to address the group.

If you would like to attend, please get in touch with us via This email address is being protected from spambots. You need JavaScript enabled to view it..

Awards 2018

Government to review the use and impact of single-use plastics and packaging waste

Summary:

The Government wants to make big changes to consumer behaviour to reduce the impact of single use plastics, increase recycling of reusable materials and that the packaging industry will have to pay for this. It is likely that the cost of ‘packaging compliance’ will increase by a factor of five to ten times its current level over the next two to five years to meet changes in both British Governmental policy and new EU directives.


On Tuesday 13th March, in his Spring Statement, Philip Hammond announced that the British Government will consult on how the tax system can be used to change consumers’ behaviour and the use of plastic. This follows a lot of press coverage of European proposals for a ‘Circular Economy’, single-use plastics, coffee cup tax and plastics finding their way into water-courses and oceans. The UK currently holds the world record for a water-course with micro-plastics contamination.

The Secretary of State has asked WRAP (a resource efficiency charity), INCPEN (voice of the packaging supply chain) and the ACP (Advisory Committee on Packaging) to engage with stakeholders to identify options to improve the UK’s environmental performance. This is being done via a set of workshops that with trade and industry groups covering the whole supply chain.

In the UK, our producer responsibility legislation for packaging waste was designed to increase recycling of packaging in line with EU targets with the lowest nett cost to business and has done this very well over the last 20 years. The UK will have to comply with the EU’s new Circular Economy Package that comes into force before we leave the EU and during the transition that will follow. One of its principles is that producers (businesses using packaging) will have to subsidise not only the recycling of packaging waste as they currently do, but also its collection and sorting.

In other European countries which have already taken this approach their cost of compliance is typically £100/t, compared to the UK’s £20/t to subsidise recycling only. We expect to see these costs passed onto businesses handling packaging in the UK in the next 2-5 years.

There is no suggestion that the UK will go as far as France who are to ban all single-use plastics from 2020, unless they are made from compostable bio-sourced materials. Current thinking on a paper published in March 2018 suggested that the Government wants to give Industry time to develop innovative solutions before they consider a direct charge on coffee cups and plastic bottles.

The review looks at six main principles:

Everyone playing their part.

  • Currently, packaging regs apply only to businesses that turn over more than £2m and handle over 50t of packaging. This will be questioned, although it is recognised that widening the net to include a lot of smaller businesses would not catch much extra packaging. It recognises that a lot of on-line sellers are excluded from the regulations because they fall below the threshold. It also recognised that the current regulators do not effectively police free-riders and this should be addressed with more vigour than chasing smaller businesses.

The system should reward recyclability

  • It is clear that packaging is important to industry and in particular the food industry where some ‘difficult to recycle’ packaging may offer almost infinite shelf life, so we must accept that difficult to recycle plastics have their place in society.
  • Our current system of PRNs does not distinguish between single material packaging that is easy to recycle and complex multi material packaging that can not be recycled.
  • It is not clear how this proposal could be implemented but it was suggested that any material that is not readily recyclable in the UK could be subject to an additional per tonne levy for ‘difficult to recycle’ materials. This could fund innovation in recycling or new recycling facilities as appropriate.
  • Deposit return systems have been shown to improve return rates (and therefore recycling rates) and should not be ignored, although there are none currently running across the UK.

The system should reward recycled content

  • When a business buys packaging with recycled content they are supporting the use of recyclates, helping to reduce the amount of waste material that is not recycled. They are also stimulating demand for recyclate materials thereby reducing the cost of PRNs (that subsidise the cost of recycling).
  • Creating demand for recycled content will stimulate demand for recyclate and help to make the system more effective. Our current PRN system rewards demand for recycled content by reducing the cost of PRNs when more material is being recycled.
  • It would be nice if the recycled content of packaging were made VAT free (in line with having zero VAT on second hand goods) but we do not expect the Government to want to do this.

Local Authorities and businesses should work towards a standard base for recycling systems

  • A common baseline for material recycled, where all authorities recycle a minimum number of material streams separately, would make nationwide education campaigns much more effective – all businesses, households and street bins having the same number of divisions for different recyclates.
  • The On Pack Recycling Label (OPRL) is a scheme that indicates how likely it is that packaging is recycled in any given area. As there are over 300 local authority recycling groups in the UK, there are nearly as many different sets of arrangements. As much as the labels are a good idea, until we have the same recycling arrangements across the UK, the label will continue to be ineffective.

The proceeds of a new Producer Responsibility fund should be distributed by an independent cross sectoral body.

In our discussions we identified that in addition to the PRN, that subsidises the cost of recycling, we would need:

  • a similar market-driven mechanism for collecting and sorting waste packaging (perhaps a CSN – Collection and Sort Note) that subsidises the cost of collection and sorting of waste packaging,
  • a communication fund to promote recycling and
  • a fund to promote recycling of the difficult to recycle materials mentioned above.

These latter two funds would need to be managed by an independent body made up of stakeholders from all affected sectors.

All recyclers of waste packaging should be required to be part of the system in order to capture more accurate data about recycling. Exporters of packaging materials should not be able to enjoy the advantages they now have over UK recyclers in the current system

  • It is agreed that the current inequalities are created because the regulations are not enforced as rigorously on exporters as UK recyclers.
  • There is resentment from some producers that when the price of a PRN increases, the extra revenue is not directed towards increasing capacity directly, it is an inducement for recyclers to recycle more and for additional recyclers to join in with the system. (But I will restate that it is this flaw that has helped give the UK the cheapest cost of compliance in Europe.)
  • It is possible that there could be a limit on PRN prices so that recyclers cannot exploit the market when there is a shortage of supply. If the price were to hit the limit, producers (and their schemes) could contribute to a capacity building fund rather than paying too much for a PRN. This has been seen to be effective for waste electricals in the UK.
  • There is general agreement that we should endeavour to promote a better standard of collection and sorting in the UK as well as encouraging recycling in the UK.

Please be aware that this summary reflects my personal impressions of the review organised for Packaging Compliance Schemes, our current research and that the Government may choose to follow up on none, some or all of these themes.

JM 16/3/18

Investors in the Environment’s Becky Taylor is recognised for her contribution to sustainability at the inaugural Inspiring Women Changemakers ‘Igniting Inspiration’ Awards.

Investors in the Environment’s Becky Taylor is recognised for her contribution to sustainability at the inaugural Inspiring Women Changemakers ‘Igniting Inspiration’ Awards.

At the Inspiring Women Changemakers ‘Igniting Inspiration’ Awards in Bradford last week, Becky Taylor, who runs ‘Investors in the Environment’ in Yorkshire & the Humber, was presented with an Award for the Sustainability Savvy Organisation. The judges noted Becky's passion for sustainability and her ability to make a meaningful impact through her work. She was nominated for the award by iiE member Michelle Marks of Coral Mountain.

In September 2016, after over 20 years’ experience in industry, Becky gave up a full-time career to take over and develop the Yorkshire & Humber region of Investors in the Environment, alongside John Mooney from Pennine-Pack, the Packaging compliance organisation based in Hebden Bridge. Both organisations are part of the Green Business Network.

Investors in the Environment (iiE) is an established, national environmental accreditation and membership scheme designed to help small and medium-sized businesses save money, reduce their environmental impact and be formally recognised for their green achievements. “It’s all about ‘doing’ the right thing; taking action to achieve environmental goals, and receiving recognition and support” said Becky, “in the 12 months since we’ve been running the scheme, active membership has increased by over 50% mainly due to us having a personal approach and taking time to get to know our members’ businesses and how we can best help”

Investors in the Environment works with over thirty businesses in the Yorkshire & Humber region with a plan to continue to grow and develop the network. It encourages developing environmental initiatives and improving resource efficiency whilst helping to save money. The programme organises a series of fun and varied events which are free for members and include site tours, members coaching and networking events and our very special annual Awards Ceremony.

Investors in the Environment (iiE) is an established, environmental accreditation and membership scheme. The scheme is designed to help businesses of all sizes to save money, reduce their impact on the environment and get formally recognised for their green credentials. Your business will implement a simple Environmental Management System (EMS) to get accredited. www.iie.uk.com

Inspiring Women Changemakers is a dynamic movement of women leading transformational change – in work, in society, and in the world. www.inspiringwomenchangemakers.co.uk

Inspiring Women
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