Alone among EU countries, the UK has introduced a radically market-based system to try to increase packaging recycling rates in order to comply with the EU's 1994 packaging directive, which requires a minimum of 50% of all packaging to be recovered and 25% to be recycled by 2001.
Its "packaging waste recovery note" (PRN) system was introduced in 1997, with the aim of raising recycling rates from historically low levels relative to many other EU countries while imposing downward pressure on costs. Many other EU countries have achieved much higher packaging recycling rates than the UK, but some, such as Germany's Dual System, only by dramatically increasing costs.
In practice, UK recovery rates are failing to reach the figures anticipated by the government. In 1997, around 28% of packaging waste was recovered, whereas the interim target for last year was 38%.
Unlike countries such as the Netherlands, where funds are raised by charging a levy at one point in the waste stream, the burden of responsibility for waste recovery in the UK is shared among four categories of waste producer: packaging manufacturers, converters (making cans, boxes, etc.), packer/fillers (using packaging to sell products) and retailers. Each has responsibility for a percentage share of the total waste stream; the latter two currently bear over 80% of the total burden.
Each company over a certain size is "obligated" to recover and recycle an amount of waste according to the volume it produces or to pay a compliance scheme to do so. Recovered waste can be exchanged for PRNs from waste reprocessors who recycle it to generate revenue which can be used to invest in further recycling capacity.
Last year the government launched a thorough review of the system after it became clear that more packaging waste was being produced than it thought, automatically reducing the recovery rate. The price of PRNs has also collapsed, placing processors' expansion plans into jeopardy. The system will soon come under further pressure when the scheme is widened to include smaller companies, more than doubling the number of participants and increasing administration costs.
While the full results of the review have not yet been published environment minister Michael Meacher has announced a stop-gap measure by increasing interim recovery and recycling rate targets by between 2 and 5 percentage points.
While it welcomed the announcement, leading PRN trader Valpak said a number of "major issues" remained to be clarified, including modifications to the PRN system and amendments to the share of the obligation taken by each sector.
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