Future changes within the compliance market

The environmental compliance market is set for quite a few changes over the next 5 years; primarily on the back of the Resources and Waste Strategy and the ongoing consumer shift towards heightened awareness of the environmental credentials of products - here's our summary...

Packaging Compliance

The Producer Responsibility (Packaging Waste) Regulations are currently undergoing a process of review and consultations on the regulations, including potential alternative models were released on 18 February 2019 - see our news story HERE on the 4 packaging consultations for an overview on the content and details on how to respond.

Potentially, the conventional relationship between producers, waste management companies and compliance schemes could change significantly. The definitions of each of the aforementioned parties could also change. What is certain is that the upfront financial burden to “producers” will likely increase significantly.

The restructuring of the Packaging Waste Regulations will not come into play until at least 2023.

Evidence Procurement

PRNs (Packaging Recovery Notes) are the sole evidence of compliance obligations within the Producer Responsibility (Packaging Waste) Regulations. Due to their complex position as a Pseudo Commodity traded by specific parties within the waste management system, they can vary in price significantly. Although the main driver for PRN costs in theory is tied to the recyclability and value of specific materials, the actual price paid will fluctuate based on the perceived supply and demand. These factors are not always clear due to published data updates on the NPWD not always reflecting the actual supply of PRNs onto the market (monthly data submissions are non-compulsory and quarterly updates have been known to be revised before). This combined with a relatively significant lag time between “placing on the market” of PRNs and public reporting can lead to a pricing discourse.

Due to the above and ongoing material specific issues causing heightened variance in PRN pricing, some examples from 2018 are below:

  • China’s recent “green fencing” policies for plastic and paper
  • Significant supply issues for wood recycling based on a series of competing governmental legislation
  • Rumours of potential market fixing in the aluminium sector (subsequently reported to the Competition and Markets Authority for investigation)

Future changes to the PRN market are likely to consist of price fluctuation and a movement away from reliance on exporting waste as more producers seek to fund the development of the UK recycling industry.

WEEE Compliance

The future of the WEEE regulations is not yet firmly set in stone. The UK has vowed to follow the EU’s movements on eco-design. There is also the possibility that some form of modulation will begin to apply for WEEE; meaning that there may be a shift from “pay for what you replace” towards a system more in line with the “polluter pays” system, whereby WEEE fees are applied based on a products direct environmental credentials rather than its predecessors. Whilst changes to the WEEE regulations could have a high impact on the levels of data and method of funding provided by producers into the waste management system, the relationship between compliance schemes, their customers and their suppliers should remain largely unchanged.

Extended Producer Responsibility

Two additional Extended Producer Responsibility Schemes are set to be reviewed and consulted on by DEFRA by 2022. Whilst the specifics of these two schemes are not yet available, they could cover a range of waste management issues such as waste carpet disposal, tyre disposal, chewing gum disposal, litter removal and many others.

If you have any further questions regarding future environmental legislative changes please feel free to email consultation@complydirect.com or if you are a Comply Direct member, please contact your Account Manager directly.

Click here to download our Future Changes Fact Sheet