Circularety producer dashboard.
Reprocessors Take Brunt of PRN Price Volatility
Reprocessors are finding it difficult to plan PRN (Packaging Recovery Note) investment as a result of a 70 per cent fall in revenues over the past 6 months, according to ecosurety.
Reprocessors are finding it difficult to plan PRN (Packaging Recovery Note) investment as a result of a 70% fall in their revenues over the past six months, according to leading resource efficiency specialist ecosurety.
The start of the year saw turbulence in the price of aluminium, steel and plastic, with prices starting unstably high, forcing producers concerned about supply to purchase their 2016 PRNs.
However, prices for all materials have dissipated in recent months, says the company’s commercial manager, Robbie Staniforth, as supply has been revealed to be good, with the UK on target to reach its recycling targets for 2016. As a result, however, reprocessors have been unable to make solid plans for PRN investments until the last quarter of the year.
ecosurety will be hosting two webinars on Circularety, its solution to volatility in the PRN market, on 14 October and 3 November. The revolutionary platform, which is in a Beta phase, will go live from January.
Circularety provides a transparent way to invest PRN obligation money in tangible recycling projects. It is the only system that shows producers governed by Producer Responsibility Obligation Regulations exactly where and how PRN money is being invested.
Benefits include a detailed report that producers can be used internally or externally to communicate about the end destination for packaging obligation money, while reprocessors can attract larger sums for investment.
Robbie explains, “The 2016 PRN market has shown significant PRN price fluctuation, and most of this is down to perceptions about supply and demand of PRNs throughout the year. Producers have paid higher costs at the start of the year and now those prices have fallen dramatically.
“This isn’t fair on producers, especially if prices recover when the Q3 figures are released at the end of this month. Neither is it fair on reprocessors, who will have waited until almost the end of the year before feeling able to invest.
“We would urge producers and reprocessors out there to see Circularety for themselves and consider whether they could help us refine the platform, for the good of the entire recycling industry.”
How Circularety works:
A producer chooses a project listed on Circularety by a reprocessor that they are interested in funding through their PRN obligation.
In doing so, they are committing to purchase a specific number of PRNs from that reprocessor at a set price, with the proceeds guaranteed to be invested in the listed project. The platform automatically invoices the producer and generates a record which counts towards their PRN obligation.
Each listed project has a description, and a photo with options for a video. Producers will be able to search for projects according to material, investment opportunity (new equipment/facilities, awareness campaigns etc), project location, and the deadline a project needs to be completed by.
Producers that invest their PRNs in a completed project will receive a report detailing where and how their PRN money has been spent, enabling them to communicate about their investment in the recycling industry to their stakeholders.
Reprocessors will be spot-checked to ensure they are delivering the project, and will be required to make up the difference on any of their projects that do not receive 100% funding. There will also be penalties at a contractual level to ensure reprocessors do not reneg on their promises.
Producers and reprocessors interested in joining the Beta phase can contact 0845 094 2228, or sign up for the Circularety webinar here.