Benefits of increased UK recycling capacity

Over the past two years, a number of packaging material markets have experienced a great deal of volatility. Prices for plastics and cardboard packaging recovery notes (PRNs), for example, have reached unprecedented heights. Although these elevated prices have been challenging for producers, UK reprocessing is seeing a surge which will help to secure markets and drive increased recycling capability in future years.

When China closed its doors to plastic, paper and cardboard packaging in 2018, the sudden gap in the export market created a shortfall in the number of PRNs available. This, in combination with an increase in recycling targets, which resulted in greater demand, led to a subsequent price hike.

China’s National Sword initiative has not been the only pressure. While export markets have contracted, the proposed move towards a requirement for 30 per cent recycled material in new plastic packaging products has increased demand at precisely a time when materials were facing a dramatic fall in reprocessing outlets.

For local authorities, the effect has been variable. Although prices available for recyclable material fell significantly in 2018, the PRN price has helped to bolster the market and, this year, revenues have bounced back.

At Valpak, we have seen an unprecedented number of new UK reprocessors coming onto the market in the last 12 months. This is good news for producers, local authorities and manufacturers. Not only will pressure on PRNs be alleviated, but for local authorities and packaging producers keen to ensure that material is fully traceable and processed in a responsible way, UK markets are desirable.

Many of these businesses have been working with Valpak to access valuable PRN funding to cover initial outlay costs. For example, Frank Mercer & Sons in Bolton, which processes waste plastics to produce tough sheet for building, recently used PRN funds to purchase an Erema plastics recycling machine.

 

Like many of the companies we speak to, Frank Mercer & Sons reprocesses material for its own end product. Others are starting up to produce flake or regrind to supply the market with a clean resource. What many of these businesses have in common is their size – as relatively small concerns, they are able to consider smaller loads that may previously have slipped through the net or to adapt to take materials that have historically been consigned to general waste.

Although demand for UK recycling is high, export still plays a part. In the paper fibre market, for example, we consume around eight million tonnes a year, yet UK capacity sits at just three million tonnes a year.

Moving forward, we can expect the focus to remain on UK recycling. The key for local authorities is to maintain a good quality material that is well-suited for recycling into new products.

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Opinions in this article are those of the author and not necessarily those of LARAC