PRN system
In order to provide a recognisable, auditable trail of evidence of recovery, the Environment Agency has developed a system of packaging recovery notes (PRNs) and packaging export recovery notes (PERNs).
You (or your compliance scheme acting on your behalf) are required to demonstrate compliance by purchasing/acquiring evidence that the required amount of packaging waste has been recovered or recycled. The only form of evidence that may be used is PRN and/or PERNs.
The only businesses which are entitled to issue PRNs or PERNs are packaging waste reprocessors and exporters respectively which have been accredited by the Environment Agency. Reprocessors and exporters are expected to use this income to increase collection and recycling capacity and to develop end use markets.
P(e)RNs demonstrate that certain activities have been completed, i.e. that packaging waste has been collected and delivered to reprocessors (or exporters) for recycling.
Companies with producer responsibility obligations are responsible for ensuring that sufficient packaging waste is collected and delivered to reprocessors and exporters to generate the PRNs or PERNs they need to demonstrate that they have met their obligations.
PRNs are traded on the open market and their value is determined purely by supply and demand, with the cost being picked up by obligated producers. Therefore if the market is tight for PRNs, the price will rise and if it is expected that there will not be enough to meet demand, the price will shoot through the roof. For producers to comply with their obligations, they must have sufficient evidence to match their targets. The theory is that if there is a shortage, the high prices make it more worthwhile collecting and recycling waste and that should then produce enough for people to comply.
PRNs are issued relating specifically to the material that has been recycled - paper, glass, aluminium, steel, plastic and wood. PRNs can only be issued for the recovery of packaging waste. Producers (90% via their compliance schemes) must certify annually to the relevant agency at the end of the year whether the recovery and recycling obligations have been met in the form of PRNs and/or PERNs.