Q2 2022 Unverified Recycling Data Released

Last week (Friday 22 July) saw the release of the second set of unverified, quarterly packaging recycling data for 2022, outlining total amounts of packaging volume to have been reprocessed or exported in Q2. This information is still unverified with several reprocessors/exporters to report their figures, so these volumes will have chance to evolve before release of the verified version on 13 August.

The data is always widely anticipated by stakeholders due to only having access to less reliable monthly information since the initial Q1 data release back at the end of April. The monthly data is notoriously unreliable as it is currently not a requirement of accredited reprocessors/exporters to submit data monthly. Therefore, it leaves those releases more open to interpretation than the quarterly data which is a requirement for all accredited reprocessors/exporters to submit data.

Strong recycling levels presented in this initial data set will hold the potential to remove pressure and stabilise markets, however, in contrast any weak levels will also hold the power to destabilise markets.

Table 1: 2022 packaging recycling levels alongside confirmed carry in and an estimated UK obligation

Figure1.1: Q2 2022 Unverified packaging recycling levels without carry over PRNs from December 2021 included

Figure 1.2: Q2 2022 unverified packaging recycling levels with carry over PRNs from December 2021

Paper – Paper appears to have struggled again this quarter, despite sitting on target when carry in figures aren’t factored in at the halfway stage for the year. This is lower than what we have come to expect from paper. In previous years paper’s surplus tonnages are usually a large contributor to the general recycling target, once its own recycling target has been achieved. It looks as though, if current rates continue, paper will play a smaller role in contributing towards general recycling therefore putting pressure on the remaining materials.

Wood – Wood is likely to be the significant contributor to general recycling, if strong recycling rates continue as they have done in Q2. Supply has remained strong meaning that when carry in is included, wood has almost hit its full annual recycling target at the halfway point of the compliance year. However, as mentioned with the situation surrounding paper, the surplus of wood becomes more valuable as it will be likely to prop up other struggling materials.

Glass – Throughout 2022, glass has continued to be the material which is tightest to the target. This remains the case with Q2 data showcasing glass sitting just under where we would expect recycling rates to be. The figures are encouraging due to optimism in the industry surrounding a long summer with hot temperatures driving up glass recycling levels, and this is now beginning to show up in the recycling data as well. When viewed holistically across both glass types and including carry in from 2021 as well, glass is sitting above target which is good, but we must continue to view this market closely as it is still close to its ‘par’ progress at this stage of the year.

Aluminium – Another good quarter from aluminium. The recycling rates appear to be strong as they sit just above the halfway mark with no carry in considered, which is improved even further when it is factored in. This should continue to reduce the market pressure, at least in the short term.

Steel – Steel has seen a significant recovery from the previous quarter and is now back on track to hit it’s recycling target. This is most likely down to a few notable additions to the accreditation list and their supply of tonnages being back in the system. This, combined with slightly higher PRN prices than we have come to expect from steel, is creating a further incentive for reprocessors/exporters to increase supply. There is still a long way to go and plenty of work to be done but in theory it appears steel is back on track.

Plastic – Plastic had a strong quarter of recycling rates despite being slightly down to where we would expect it to be at this stage of the year. We can see in the Q2 figure that more packaging has been recycled in Q2 than Q1, and when viewed overall with the carry in figure from last year too, we can see that plastic is on course to hit its recycling target in 2022. It’s historically a volatile material so we must continue to track it closely, but the data release here has helped reassure all stakeholders that despite continued disruption/volatility, the UK does seem to be remaining on course to reach its goals.

This data release here is still ‘unverified’ which means the figures are subject to change by the Environment Agency, and it also means that there are still a number of both large scale and smaller scale reprocessors and exporters still to report their data. Usually this would mean that recycling levels will typically increase from this point, however, there have already been a few changes to this information, both up and down.

We plan to look at the data much closer to the ‘verified’ stage, as well as the market as usual and PRN pricing in our upcoming PRN Market Update webinar, which we are running on 17th August 2022. You can register for your free place HERE.

If you have any questions at all, please don’t hesitate to get in touch with your account manager or the packaging team and we’ll be happy to help.