UK PRN/PERN values rise, could add upward pressure to recycling markets in March

LONDON (ICIS)–Packaging Export Recovery Note (PERN) and Packaging Recovery Note (PRN) values continued to rise – hitting £350/tonne this week.

PRN/PERN values are typically priced in to UK waste bales, albeit at a lag. Although this has yet to impact on UK recycling values, sources in the recycled polyolefins (R-PO) chain said that this could add upward pressure to March negotiations.

PRNs are a UK-specific scheme whereby accredited reprocessors sell PRNs on a per tonne basis to packaging producers and compliance schemes as proof that material has been recovered and recycled.

PERNs are similar to PRNs, except that they are granted per tonne of waste exported from the country.

Packaging producers that exceed £2m/year in turnover and handle over 50 tonnes/year of material are required to purchase PRNs or PERNs.

Any shortfall in PRN/PERNs can be met through a cap and trade scheme which provides resale values and works in a similar way to the emissions trading scheme. Because of this, the recoupable value of PRNs and PERNs is often factored into UK post-consumer bale (PCB) prices, albeit usually at a lag.

Nevertheless, there is a difference in how PRN and PERN values are calculated.

PRNs are granted per tonne of recycled material, whereas PERNs are granted on the total volume of post-consumer material exported.

The amount of material lost during the recycling process varies considerably depending on contaminant levels, tensile strength and mechanical factors, but losses are typically significant.

Although the increased value of PRNs and PERNs are expected to encourage exports, stricter inspections from the UK government are expected to add lead times to export shipments.

ICIS has launched a new Europe recycled polypropylene (R-PP) price report covering post-consumer and post-industrial bales, flakes and pellets. To subscribe to the new report, or for further information, please contact clientsuccess@icis.com.

Click here to see regulatory targets and a list of chemical and mechanical recyclers on the ICIS Circular Economy topic page.