So How Does the PRN System Work (in brief!)?
In March 2016 The Advisory Commission On Packaging, ACP, issued a PRN System Guide – click here to download the guide ACP_PRN_System_Guide_2015_-_Final
To confirm our clients have met their legal recycling and reprocessing obligations, Co2Compliance purchases evidence on their behalf in the form of Packaging Waste Recovery Notes (PRNs) and Packaging Waste Export Recovery Notes (PERNs).
PRN/PERNs are issued by accredited packaging waste reprocessors and exporters to the amount of waste reprocessed (e.g. 500 tonnes of cardboard reprocessed allows the reprocessor to issue 500 PRNs in paper/cardboard).
The evidence notes have two functions. First, they are a counting tool for the amount of recovery/recycling undertaken on the behalf of producers. Second, they channel producer funding to recovery/recycling operations, improving the collection and reprocessing infrastructure across the UK
PRNs/PERNs have a market value that depends on relative supply and demand (and perceptions of scarcity). The value of PRNs/PERNs is not proportional to the value of material. The total economic value of a tonne of material in this context is the combination of the intrinsic value of the material plus the PRN value at the prevailing rate based upon supply or demand.
Therefore, a low value material may be collected because it is subsidised by the added value of the PRN, in order to meet the targets. Equally, a high value material may be collected for its own worth even if recycling targets have been met (e.g. aluminium and high value polymers). If there is insufficient packaging recycling to achieve the targets, the PRN price will increase, thereby making more recycling happen at an economic rate for the operators.
The more difficult or expensive materials are to collect and recycle, the smaller the quantity that gets recycled and therefore the more expensive the PRN/PERN.
Similarly, the more limited available reprocessing capacity or demand for the material, the smaller the quantity that gets recycled and therefore the more expensive the PRN/PERN.
Figure 1: Illustration of materials (red) and financial (blue) flows in the packaging chain, household stream only.
Source: DEFRA 2014