The PRN sector continues to be full of surprises. After the value of aluminium PRNs (packaging waste recovery notes) rose earlier this year, it has now fallen back. But paper PRNs have risen due to increased pressure to meet the packaging recovery obligation in the final quarter of 2015.
Paper PRNs are generally issued by paper mills recycling cardboard, both in the UK and overseas.
The PRNs have risen from around 85p to £5 per tonne, the largest spike since prices peaked at £10 per tonne in early 2009, as producers race to meet the estimated 500,000 tonne recovery obligation.
In January 2015 the Environment Agency (EA) ruled that energy from waste (EfW) facilities must now be R1 compliant in order to issue recovery PRNs. The EA predicted that revenue from generating recovery PRNs would be enough to drive up the number of operators to register their EfW plants to require the R1.
This was doubted by industry, with one source predicting it would take an EfW operator “two hundred years” to recoup the losses made on upgrading an incinerator from PRN revenue alone.
However, with a number of new R1 compliant energy from waste plants coming online between now and 2019 – and the price of recovery PRNs now also between £3-5 per tonne, there is hope more reprocessors will apply for accreditation in 2016.
Ian Andrews, of the Environment Exchange, said: “The current pressure in this year’s market is a result of a lack of financial support for the lower value PRN materials in previous years.
“It is expected that the higher values currently being achieved in this year’s markets will result in an increase of accreditation levels for 2016 and a subsequent rise in tonnage available to the market.”