Last week saw the release of the first set of unverified, quarterly packaging recycling data for 2021, outlining total amounts of packaging volume to have been reprocessed or exported in Q1. Unfortunately, there appeared to be some discrepancies within the initial data release which had delayed reporting on these figures up until now, but these have now been corrected by the Environment Agency.
The data for Q1, despite being unverified at this stage, is always very much anticipated before its release due to a lack of information preceding it. It is always the first opportunity to take a detailed look into how packaging recycling is performing, and holds potential to make a significant impact in the respective PRN markets, depending on what the figures show.
Table 1: 2021 packaging recycling levels alongside confirmed carry in and estimated UK obligation
The UK obligation, determined by all producers final packaging submissions and the recycling targets set for 2021 by DEFRA, will determine how many PRNs are required to be purchased in 2021. Currently, this UK obligation figure is not available (until 14 May), meaning it’s very difficult to track the progress these Q1 recycling levels are making towards the countries final goal.
To provide a performance ‘benchmark’ at this stage, we have used an estimated obligation calculating the final packaging activity of all UK producers in 2020, while applying the new 2021 recycling targets. We understand that this year more than any other, it’s very difficult to pinpoint exactly where UK obligation will fall (especially for some materials), due to the changing usage and behaviours with packaging during last year’s lockdowns throughout the pandemic, so this will remain a key upcoming focus to monitor. It is still extremely useful though for giving a feel for how well each material is potentially performing against its recycling target.
Figure 1.1: Q1 2021 unverified packaging recycling levels without carry over PRNs from December 2020 included
Figure 1.2: Q1 2021 unverified packaging recycling levels with carry over PRNs from December 2020 included
Paper – Seems to have been performing well in Q1 meaning that without carry in considered, it appears to be surpassing its potential target. This is very positive as Paper has historically been utilised to help the UK fill its general recycling obligation at the end of the year.
Glass – Appears to potentially be the material closest to its recycling target at present. This is one of a few materials which also has potential to have is demand altered when UK obligation figures are released in mid-May so remains one to watch closely in coming weeks.
Aluminium – Performance of Aluminium in 2021 seems to currently be mirroring that of last year, with really good levels being achieved at an early stage.
Steel – Similar progress against its potential target to Paper and appears to currently be tracking ahead of an average level which is positive to see at the 25% mark.
Plastic – As always has been the most hotly discussed and debated. The potential discrepancies with the early version of this data release appear to fall under Plastic but has now been stated as rectified. Despite the fluctuating figure, the 305,000t mark is good, and with a potential obligation of just over 1.1 million in 2021, the progress is obviously encouraging. Especially when considering multiple occasions in the past when Plastic has been much tighter to target, or even behind target at the Q1 stage.
Wood – The strongest performer without a doubt. The wood recycling target has actually been decreased by DEFRA for 2021 due to fears of PRNs competing with a push within the Biomass industry. But recycling performance has remained high meaning an unwavered supply is stacking up well against a much easier demand.
For all materials as well, the carry in levels (PRNs rolling over into 2021 which were surplus to requirements against the 2020 compliance year), are at record highs meaning the UK does also have a bit more ‘breathing space’ in 2021 as well. If recycling levels were to dip, we have a ‘reserve’ of PRNs which we can fall back on if required.
The data illustrates positive initial figures, however the data is still unverified meaning they have potential to change (up or down), and also important to remember we can’t gain a true gauge on actual progress until we learn more about the UK obligation too.
It’s also important to remember that it’s still very early in the year too and as with previous years, if the UK is to hit its recycling targets, three more quarters of strong recycling levels will be required.
We plan to look at the verified data, as well as the market as usual and PRN pricing in our upcoming PRN Market Update webinar, which we are running on 20th May at 10am
If you have any questions at all, please don’t hesitate to get in touch with your Account Manager directly or on firstname.lastname@example.org.