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Post Brexit - environmental legislation & future trading blog

7th January 2019

Gareth Roberts

Brexit is an unprecedented political, economic and legal phenomenon. With Brexit on the horizon and a chance of a 'no deal', our MD Gareth Roberts discusses the implications on environmental legislation and additionally provides a document from our Group partner company Uniserve on 'Preparing for a no deal Brexit'.

Gareth discusses...

"There are a number of key pieces of EU legislation that have a broad impact in the way we deal with waste in the UK. The Packaging and Packaging Waste Directive (94/62/EC) is indeed one of them and sets escalating targets for reducing packaging waste and for better labelling of packaging’s recycling needs. Others include the Landfill Directive (1999/31/EC), The Waste Framework Directive (2008/98/EC) and The WEEE Directive (2012/19/EU).

In terms of Packaging Compliance then we have our own UK Regulations (The Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2016) that ensure that the EU Directive Packaging targets are at least met. It is fairly certain that the UK government will retain the Packaging Waste Regulations post-Brexit (in either a no deal or Brexit deal scenario) and appear to be quite ambitious going forward in terms of ever higher packaging recycling targets. We currently have UK legislation taking us through to 2020 in terms of packaging recycling targets. We expect a consultation in the coming weeks to determine packaging recycling targets post 2020. It has become apparent that the current UK government is keen to at least meet minimum environmental standards that Europe adopt going forward. It appears certain, to implement in the UK, the key aspects of future EU legislation such as the EU Circular Economy Package and this will aid the ease of future trade with EU member states.

In terms of planning for a no deal Brexit then firstly it is important to be with the right compliance scheme partner, in terms of one that you can trust and that has an impeccable track record on compliance over many years. Comply Direct indeed has such a track record and will ensure you are kept fully up to speed with market developments in light of Brexit. In terms of specifics with the PRN system and a no deal Brexit at the end of March 2019, then the biggest potential impact will be more volatility on PRN prices as a result of increased pressure on a potential shortfall of PRNs for 2019 compliance. The UK still relies quite heavily on exporting UK generated packaging waste for recycling outside the UK and with a reasonable percentage being sent for reprocessing in other EU member states.

A no deal Brexit is likely to cause disruption to the logistics of exporting packaging waste by road and sea and is likely to delay the generation of P(e)RN generation from exports and possibly a reduction in exports too due to the difficulties associated with a non-deal Brexit and shipping. Costs and administration will increase for exporters and we are likely to, therefore, see a drop off in exports. A no deal Brexit should encourage more UK reprocessing of packaging waste and for the UK over time to become less reliant on exports but this will take time to happen.

Other factors to consider in a no deal Brexit are the cost-effectiveness for UK companies selling recycled product to the EU and whether a lack of access to the single market would make them competitive. Again, this could see a reduction in PRN generation and a pressure on PRN prices. Another factor is that UK reprocessors and exporters might have issues with recruiting the right skills into their business to be fully operational in the event of a no deal Brexit.

In summary, our approach to packaging waste in the UK is currently shaped by EU legislation, and going forward we are convinced the UK government will ensure this ongoing parity still stands post-Brexit and that this is essential to maintaining cost-effective access to the single market via ‘regulatory equivalence’. In the short term, a no deal Brexit is likely to put further pressure on 2019 PRN prices."

Additionally, our Group partner company (Uniserve) has recently created a guide to a no deal Brexit which you can find here

As soon as we have further details, we will keep you updated.