Yesterday (15 May 2019), the Environment Agency released both the verified recycling data for Q1 2019, as well as the first release of total UK obligation data
The verified recycling data is the final version of the recent Q1 information which was released and analysed by Comply Direct (you can view the original analysis here). The obligation data is also hotly anticipated as it provides the first benchmark of the amount of recycling we will have to hit for 2019 in order to meet the UK government's recycling targets, as well as indicating how many obligated packaging producers in the UK are currently registered, and it also indicates how many are still yet to complete their submissions.
UK Obligation Data
As we are still at an early stage of the year, the UK obligation data will currently show reduced levels when compared to the final obligation we reached as a country at the end of the 2018 compliance year. This is because there will still be late registrants’ information to add to this as well as any new ‘free riders’ which become obligated to comply and registered throughout the year. In the table below we have compared the current 2019 UK obligation (which uses 2019’s recycling targets) with the 2018 obligation from this point last year, as well as showing the final UK obligation from the end of the 2018 compliance year.
Figure 1: UK total obligation for initial releases in both 2018 and 2019, as well as final obligation for the end of the 2018 compliance year.
Figure 2: Number of obligated producers registered and included in UK obligation data for the initial release in 2018 and 2019, as well as the final UK total for the end of the 2018 compliance year
The obligation data in Figure 1 shows that we are currently at similar levels of obligation when compared to the initial release at this point in 2018, but when the final standing for 2018 is taken into account it highlights just how much the 2019 obligation still has to grow throughout this year. Figure 2 shows how so far this year 6964 obligated UK producers are registered, which again is similar to this point last year, however, last year’s final total came to 7411 which was an increase of 476 producers throughout 2018. This means that for 2019 it's very likely we can expect an increase at least this big again, if not greater as the Environment Agency is known to be taking a focus on reducing ‘free riders’ (obligated packaging producers who are not yet complying with the regulations), and ensuring they are registered and added into the figures.
With this growth in obligation expected it means that the amount of PRNs we are required to produce and procure as a nation will be greater than 2018. Increased recycling targets for 2019 as well means that even if we had the same amount of obligated producers in the UK as last year, and if those producers handled exactly the same amount as packaging as they did last year, more PRNs would be required to offset their obligation.
Verified Q1 Recycling Data
Up until now we have been tracking progress of each material against an estimated 2019 obligation. This was calculated using the final 2018 UK obligation, with 2019’s respective targets attached. Now we have the final verified recycling levels and an initial 2019 UK obligation, we can show the progress of each material against the actual 2019 obligation, as it stands. As highlighted previously, the 2019 obligation will rise throughout the year so it’s worth noting that progress of the materials as shown below are against the smaller initial obligation.
Figure 2.1: Recycling levels for each material against the initial 2019 obligation, excluding carry in levels
Figure 2.2: Recycling levels for each material against the initial 2019 obligation, including carry in levels
The data set against this initial, smaller obligation shows how Plastic and Aluminium are still behind target without carry in being taken into account, and very tight to target when the small carry in is included. This highlights how far behind both materials are and the PRN market for Plastic especially has remained very dynamic on the back of this data with prices per tonne continuing to rise for the troubled material.
Plastic PRN prices are continuing to rise and it’s important that all UK obligated producers are aware of this. Until more positive news for Plastic is received, such as very healthy Q2 recycling levels, prices seem likely to remain at high levels for the near future so it’s more important than ever to ensure that UK producers budget accordingly.
Other materials do seem to be performing well, with Wood in particular a stand out performer. Hopefully the positive news across these materials (which typically will also cover General Recycling obligations), will help relieve existing market pressure and the positive levels do offer potential for PRN prices to soften.
Upcoming PRN update webinar for Comply Direct members
Due to the current climate of the PRN market we recognise that’s its vitally important we continue to keep our members up to date with the PRN market and potential price changes. We recently ran a webinar on the unverified Q1 recycling data release (if you are a member of our scheme please don't hesitate to contact us for a copy of the recording), however, on the back of the UK obligation data release as well as the verified recycling data, we are running another webinar on Tuesday 21 May at 3pm - click here to register your free place
We encourage as many of our members as possible to register on this webinar as we feel it may help to answer any questions you may have at this stage and we will also be outlining our Q3 PRN rates.
If you do have any questions in the meantime, please don’t hesitate to get in touch with your Account Manager directly or email firstname.lastname@example.org