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Producer Responsibility Obligations (Packaging Waste) Regulations 1997 (As amended)
CHAPTER SEVEN
End of year arrangements for the issue of Packaging Waste Recovery Notes (PRNs) & Packaging Waste Export Recovery Notes (PERNs)
This Chapter discusses the end of year arrangements for PRNs and PERNs and asks for views on whether to change or retain the present arrangements
7.1 Accredited reprocessors issue Packaging Waste Recovery Notes (PRNs) and accredited exporters issue Packaging Waste Export Recovery Notes (PERNs) against tonnages of packaging waste delivered for reprocessing. The PRNs/PERNs are supplied to obligated producers or compliance schemes or their representatives who use them as the documentary evidence they need to demonstrate that their annual recovery and recycling obligations have been met.
7.2 The Regulations operate on an annual cycle. Producers have recovery and recycling obligations for a certain year and are required to provide evidence of packaging waste recovery/recycling relating to that same year. An exception to this is that PRNs/PERNs relating to packaging waste delivered for reprocessing in December can be used to offset obligations in either that year or the following year. This is to enable a smooth transition between compliance years and to ensure that tonnages of waste delivered at the very end of each year may still be used as evidence on compliance.
7.3 This Chapter outlines the current end-of-year arrangements and possible change.
Current End of Year Arrangements
7.4 The specific arrangements in the current system are as follows:
January - November : packaging waste received in this period is required to have a PRN/PERN issued for that year only. Those PRNs/PERNs must be issued before 31 December. Any tonnages received but not issued in January to November are currently to be returned to the EA or SEPA or EHS.
December : packaging waste received in December can have a PRN/PERN issued against it either for that year or for the following year. These PRNs/PERNs must be issued before 31 January of the following year.
7.5 When first devised, this carry-over period was intended to cater for some problems experienced by reprocessors in monitoring, recording, checking and generating PRNs for material received in December, and getting in touch with producers or schemes wishing to purchase the PRNs and carry out the transaction in time for the deadline. This was exacerbated by the fact that many reprocessing plants close over the Christmas period and may not reopen their office until 2 January.
7.6 Some reprocessors use the PRNs they generate to cover part of their own obligation. They may take the view that any change to the carry-over arrangements may mean they have fewer PRNs to sell. Others, however, may say that a change to the arrangements may lead to an increase in PRN prices which could be significant, if the carry-over would have been significant.
7.7 For some materials, a removal of the carry-over period would be occurring at a time of peak collection - e.g. glass, paper and board over the Christmas period.
7.8 There are also potential difficulties in relation to compliance schemes. They may require the degree of flexibility that the carry-over period offers to deal with changes in their obligation through the year. A result might be a need to move to a greater amount of spot purchasing rather than contracted arrangements. This may be seen to work against the longer-term approach based on planning that has been recommended by the ACP.
7.9 On the other hand, in practice, this system is complicated to administer. Accredited reprocessors are required to issue a final PRN/PERN to the Agencies at the end of each of the above periods, in respect of packaging waste received and on which a PRN/PERN has not been issued to an obligated producer.
7.10 The current system allows a carry forward of evidence derived from packaging waste received in the previous obligation year. However, the extent of this carry forward is limited only by the amount of packaging waste received in December for reprocessing and the demand for the evidence in the current year.
7.11 The Agencies consider that the current arrangements are more complex than they need to be and believe that the system can be simplified. A possible change is therefore outlined below as a means of providing for a simpler system which reflects the annual regulatory system which requires the supply of evidence for recovery and recycling of packaging waste.
Possible removal of the carry-over of December waste
7.12 A possibility would be to remove the end of year carry-over of evidence. This would have the effect of limiting supply and demand for evidence to the calendar year. Any evidence not provided to an obligated producer and or their representatives as at 31 January, in respect of the previous year, would be returned to the Agencies as a final PRN/PERN. This option would also remove the end of November cut-off date.
7.13 Under such a system reprocessors receiving waste between the period January and December would have until the end of January of the following year i.e. a 13 month period, in which to supply PRN/PERNs to obligated producers and/or their representatives, but waste received in January would only apply to that year and not to the previous one. The new obligation year also starts in January, so there would be no need for shut-down of plant (other than is normal, for example, over the Christmas and New Year period).
7.14 The demand for evidence results from obligated producers having to meet increasing targets for recovery and recycling of packaging waste. The supply of evidence arises from the packaging waste that is reprocessed. Creating a situation where demand and supply occur in a given timeframe may lead to a closer correlation between demand and supply. Allowing a carry-over of evidence affects the supply and demand situation in any given year by allowing any over-supply to be carried forward. The knock-on effect of this is that in the following year there is already a net balance of evidence before any reprocessing has taken place. For some obligated parties, such as compliance schemes, it may be seen as a disadvantage that this possibility of forward purchasing may disappear. However, the tonnages concerned have usually been small, and there will need to be an assessment of the benefits to be gained from a simplification of the system as against retaining the carry-over arrangements.
7.15 The Government proposes to take decisions on this matter in light of comments from industry and views are therefore invited from stakeholders.
Q35: Do you think that the process would be simpler if the possibility of end-of-year carry-over of evidence were removed ? If not, why not ?
What disadvantages would there be ? Would there be particular problems for -
a) reprocessors themselves ?
b) compliance schemes ?
c) others ?
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