New waste management fees being introduced to fund consistent collections must acknowledge fluctuations in material and PRN values to provide stable funding, Ruth Beckley, Director of customer service and compliance, Valpak, argues.
Whatever you think about packaging reforms, they are well under way. Understandably, supply chains have reservations about EPR (extended producer responsibility), but the reforms also offer a great opportunity to overcome the current stumbling blocks.
When we talk about EPR, the discussion revolves mainly around money, from producers concerned about compliance costs to local authorities wanting adequate funding for kerbside consistency.
Everyone agrees that full net-cost recovery will drive local authority collections, but what does this mean? So far, we know that the costs of collecting, sorting and disposing of packaging will be covered by fees levied on producers, giving authorities a new level of budgetary security.
As annual compliance costs rise from £140 million in 2021 to an expected £1.7 billion in 2024, some producers will experience soaring overheads. Affected businesses – including brand owners and importers – will understandably pay close attention to how and where their money is being spent.
Given this expected hike, ensuring that full net-cost fees acknowledge any fluctuations in material values will help determine whether those fees actually need to be so costly.
While this may trigger alarm bells for some, EPR should reduce regulatory deficiencies and support each section of the packaging waste management chain. The goal is to create a system whose tenets complement each other and provides the tools needed to deliver a more circular economy for packaging. Full net-cost funding and consistent collections must work effectively in a symbiotic relationship.
As with any other resource, the price of recovered packaging materials fluctuates.
As with any other resource, the price of recovered packaging materials fluctuates. Historically, while local authorities have shouldered the cost of collections, their costs are offset, to varying degrees, by the value of the processed materials.
Under a proper full net-cost recovery system, the funding received by local authorities from producers would take into account material values and the uplift in value provided by the packaging recycling note (PRN). Any local authorities that do not already enter into profit-share agreements with contractors will have a greater incentive to do so.
It’s easy to focus on cost, but it’s important to remember that PRN funding drives recycling by providing the investment needed to source and process greater volumes. As EPR’s eco-modulation function begins to drive the use of more sustainable packaging from 2024, we can expect both increased collections of recyclable material and greater demand for it too. A full net-cost fee, payable by producers, should reflect the increased value of the materials passing through the system.
A full net-cost fee, payable by producers, should reflect the increased value of the materials passing through the system.
Whichever are included in consistent collections, the link with the full net cost is unbreakable; producers will pay full net-cost fees for those items included. For materials outside consistency proposals, producers will be incentivised to take back and self-manage them, the reward for which will be a reduction in their full net-cost fees.
Therefore, packaging materials excluded from consistency lend themselves to voluntary schemes, which enable producers to offset costs and ensure problematic materials find a route to recycling.
Across industry, examples of voluntary EPR are already working well. Waste cosmetics are collected in store and supermarket flexible-film collections have proved popular with consumers.
Valpak’s National Cup Recycling Scheme has recycled 188 million disposable cups since April 2018 and, recently, we have been working with brands to explore take-back options for textiles. If we can set those systems in place, we will move closer to the holy grail of fibre-to-fibre recycling.
As EPR spreads around the world, issues such as transparency and legislation alignment will become increasingly important. These demonstrate how successful EPR should work: as a fully-costed system with provision for every area of the chain. The goal is to drive more sustainable design, but EPR is also a mechanism to ensure that more problematic materials are recycled responsibly.
With priority materials handled through consistent collections, and the offsetting of full net-cost filling in the gaps, we should all be pulling in the right direction.
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