The unverified Q1 recycling data for 2020 has been released by the Environment Agency today (22 April) which holds a large importance when determining the UK’s recycling performance at the start of a new compliance year
The data is much anticipated despite the fact it may not quite fully illustrate the difficulties both UK packaging producers and reprocessors/exporters will be facing over the coming months, due to Coronavirus. It is important as it provides a bit more visibility on where we stand before heading into this unknown and uncertain period, and also highlights the task ahead.
Whilst the Q1 recycling rates are now released, we don’t yet have full visibility over the UK’s total obligation for PRNs in 2020 just yet, as all of the obligated producers’ submissions are still being fully collated and analysed by the Environment Agency. Therefore, we are using an estimated obligation to provide the benchmark for comparison. We have taken the final 2019 obligation after all obligated producers were registered, and then worked in the new increased 2020 recycling targets, to provide a ‘worst case scenario’ type obligation mark.
Figure 1.1: Q1 2020 packaging recycling levels without carry over PRNs from December 2019 included
Figure 1.2: Q1 2020 packaging recycling levels with carry over PRNs from December 2019 included
As you can see from figure 1.1, without carry in PRNs (from December 2019) included, we are on track with all materials except for Energy from Waste (EfW) PRNs which is 1% behind target. It’s very encouraging to see the two materials which struggled last year; Plastic and Aluminium, doing very well at this early stage. Glass is also on target thanks to a good performance from Glass Remelt helping to bring up the level of Overall Glass to cover any deficit caused in Glass ‘Other’ or aggregate recycling. Paper and Wood, which contributed heavily into General Recycling last year, are also tracking above target. However, as they contribute so much to the UK’s General Recycling obligation, we must be cautious when viewing these materials, as a healthier surplus will no doubt be required when compared to other materials.
More good news comes in that for 2020, the carry over levels when compared to those of 2019, are much improved. This means that when we look at recycling levels with this carry over ‘insurance’ tonnage included, the progress of each material is boosted much more than last year. Figure 2.2 illustrates the recycling rates when this extra tonnage is included.
As well as improved carry over, if the UK obligation was to drop, then the progress of each material against their recycling target would also improve, and this is likely to happen in 2020. Due to high prices of PRNs in 2019, it seems that many UK producers will have taken much greater care over their submission for 2020, improving data accuracy and dropping over declared obligation. The high PRN prices will also have caused material changes in packaging use as well as driving some producers to perform activities such as light weighting, to reduce their obligation for 2020 as well. In addition, sadly, if the Coronavirus continues to work against UK business as it has shown to have already, and for a prolonged period, it is likely that more UK producers will go under meaning that PRN obligations may well be lost too. All of these factors mean that the final UK obligation (and therefore, number of PRNs required) in 2020, is likely to be lower than the estimate used here.
Please remember that at this stage, the data is still unverified which means the numbers do have potential to change before the verified release on 15 May. We can see that from the initial release, there are still a number of reprocessors and exporters still to report on their figures, meaning that it is likely these overall recycling levels for Q1 may still grow further.
The data shows a very good start to the year and there is as number of other good news headlines (obligation may drop meaning progress will be boosted, stronger carry over level this year, still reprocessors/exporters to report).
However, the big unknown is the effect of Coronavirus. We already know that this is impacting UK business which means both UK producers as well as UK reporcessors and UK exporters will all be feeling the difficulty. Exactly how this will affect recycling levels and therefore, the PRN market still remain to be seen, but we do know there will be an effect. As this data here covers January through to March, it will have had some virus effect included within it, but more of it will be highlighted within Q2’s data release so this will be a very important time for the PRN market.
All in all, despite us heading into a great unknown, we’ve got the best possible start as shown to us today. We’ll remain on top of all the data available and all the markets on your behalf. After the verified version of the data is released, as always we’ll be running an update webinar for our members to discuss everything in greater detail. The next webinar will be on Friday 22 May at 10am and you can register for your free place here: https://register.gotowebinar.com/register/3600944966917505027
If you have any questions at all, please don’t hesitate to get in touch with your Account Manager directly or on email@example.com. Stay safe.