Changes in the UK's Packaging Recovery Note scheme have affected pricing dynamics between some UK converters and recyclers of polyethylene terephthalate.
PRNs are a type of document that provides evidence that waste packaging material has been recycled into a new product, and can also be sold to companies or schemes.
Whereas the notes could previously be issued/sold only by converters, they can now also be issued/sold by recyclers.
In turn, this means the notes' revenue stream, which is currently understood to be around GBP25-30/mt, has in some cases moved from converters to recyclers.
Some expressed concern over the changes.
"I think it will have a big effect on UK market prices. I am going to lose a revenue stream which would drag down the Platts value," said one converter.
Some recyclers are giving buyers the option of taking the PRNs, while others now automatically claim the PRNs themselves.
"Two of my suppliers are taking the PRN and two are letting me take the PRN," the converter said.
The recyclers that provide the option then reflect the absence or inclusion of PRNs in their selling price.
"We issue PRNs on a good proportion of what we sell. Customers that are accredited get that factored in. Those that are accredited pay more. It works," a recycler said.
Those that do not provide the option claim that, as few converters are accredited under the scheme and the scheme only runs in the UK, the true market price is that which excludes the PRN.
"This only affects two UK sheet manufacturers, so they are unhappy, but it will not affect the overall market price as they do not get this benefit from their European suppliers. The two who are accredited are going to have to swallow the pain as they only represent a small part of the market," a second recycler said.
A representative of the UK Environment Agency agreed that there were not many accredited converters in the UK, though he could not confirm a number.
"The move in PRNs is a sensible one. As recyclers we would prefer that PRNs didn't exist at all as it confuses market pricing at all levels, but since it's here it is best that the value remains with the recycler," the second recycler said.
"The reality with PRNs is that they find their way in value terms back to the waste management companies and in turn the councils as the waste bales of plastic have an inflated value based in the PRN element that can be claimed by either exporting or reprocessing," the recycler added.
