The Small Producer Allocation Method

A company with an annual turnover of between £2M and £5M can register with the relevant Environment Agency using the Allocation Method. This method uses a specific calculation based on the company’s turnover and the Recycling Allocation figure for the year (30 tonnes).

By using the Allocation Method, your company only purchases PRNs for your main packaging material. If the Allocation Method is not utilised an obligated company must provide specific weights for each material they handle and each activity they carry out. In some cases it is cost effective to opt for calculating the packaging placed on the market.

SME (small and medium-sized enterprises) options removes the requirement & expense of analysing packaging weights handled and calculating complicated recycling and recovery obligations. The introduction aims to target smaller companies who have evaded the laws on packaging because of the costs and time involved.

IMPORTANT!

If your company chooses to use the Allocation Method, it must continue to use it for at least three years, assuming turnover remains between £2M and £5M.

The calculation used to determine your obligation using the Allocation Method is as follows:

Business turnover (to the nearest £10,000)/1,000,000) x Recycling Allocation = your obligation in tonnes (of your main packaging material)

Example

A company’s turnover is £2,753,993 for 2011. Their main packaging material is paper. First of all, the company’s turnover is rounded to the nearest ten thousand pounds, which makes the turnover £2,750,000. Divided by 1,000,000, this gives 2.75. The Recycling Allocation for 2012 is 30 tonnes. The company multiplies 2.75 by 30 to give them an obligation of 83 tonnes of paper.

The cost of using the Allocation Method involves a registration fee of £345 and a PRN cost dependant on your turnover and the cost of PRNs for your main packaging material.

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