Unpacking the value of the PRN system
The UK packaging recycling system is under scrutiny. Calls to reform the Packaging Recovery Note (PRN) system have grown louder alongside the rollout of packaging Extended Producer Responsibility (pEPR) and amendments to Plastic Packaging Tax. Much of this debate has been characterised by speculation and, at times, misinformation. Against this backdrop, one fact deserves to be stated plainly: the PRN system has never, in nearly 30 years of operation, caused the UK to miss a national packaging recycling target. That record is the starting point for any honest assessment of the system.
Origins of the PRN system
When the UK’s Packaging Waste Regulations were introduced in 1997, policymakers faced a fundamental question: how should producers contribute towards meeting national packaging recycling obligations? The UK opted for a market-based mechanism; one designed to incentivise recycling through the principles of supply and demand.
At its core, the PRN system creates a direct financial incentive for recycling activity. When evidence of recycling becomes scarce, PRN prices rise. This increases revenue for accredited reprocessors and exporters, encouraging additional collection, sorting, and recycling activity to help meet national targets. Conversely, when recycling outputs increase and targets are comfortably achieved, prices fall. This responsiveness is one of the system’s defining strengths: it links producer funding directly to recycling performance and directs financial support towards the parts of the market where evidence is most needed.
For producers, navigating the PRN system can be complex, particularly for larger obligated businesses managing significant volumes of packaging data and regulatory requirements. Compliance schemes play an essential role in making this system work. By managing data submissions, forecasting obligations, and purchasing PRNs on behalf of members, schemes help producers meet their regulatory requirements efficiently and cost-effectively. Through established relationships with reprocessors and deep market expertise, compliance schemes also support informed purchasing decisions and help producers navigate periods of price volatility.
Today, PSF-member compliance schemes fulfil the recycling obligations of 97% of all UK packaging producers, collectively delivering funding that supports the recycling of over 8 million tonnes of UK packaging waste each year.
Strength through flexibility
One of the PRN system’s most valuable, and frequently underappreciated features, is its capacity to respond, in real time, to changing conditions in the recycling market. When evidence of recycling becomes constrained due to market disruptions, operational challenges, or shifts in material flows, PRN prices respond. This sends a clear signal that additional recycling activity is needed and helps direct value towards the materials and markets under the greatest pressure.
The most striking recent example came in 2019. Following the introduction of China’s National Sword policy, major export routes for plastic packaging waste closed almost overnight, creating acute evidence scarcity in the UK market. The PRN system responded automatically: plastic PRN revenues jumped from approximately £59 million in 2018 to £253 million in 2019; an increase of around 330% in a single year. This price signal pulled additional material through the UK recycling system at a moment when market economics would otherwise have made it unviable. Without the PRN mechanism, the UK would likely have missed its plastic recycling obligations that year.
Glass markets have demonstrated the same dynamic. Glass remelt PRN revenues rose from approximately £51 million in 2021 to £140 million in 2022, as cost pressures and infrastructure constraints tightened evidence availability in that sector and the market responded accordingly.
The PRN system has also maintained compliance through longer-term disruption. During the Covid-19 pandemic, dramatic shifts in consumer behaviour altered packaging volumes and material flows significantly. The fuel and driver shortages of 2021 placed further strain on collection and logistics. In each case, the system’s price mechanism adapted, and UK recycling obligations were met.
Delivering results
UK packaging recycling rates have risen significantly since the regulations were introduced, from an estimated 30% in 1998 to 70% by 2025, more than doubling recycling performance in under three decades. Over the same period, the system has met its overarching packaging recycling obligations every single year, including in years marked by economic downturns, global commodity market disruptions, and extreme fluctuations in raw material prices.
The financial contribution of the PRN system to UK recycling infrastructure is equally striking. In 2024 alone, the system generated approximately £292 million in revenues for accredited reprocessors and exporters. Of that total, £92 million was invested directly in recycling infrastructure and capacity; the kind of long-term capital investment that sustains and expands the UK’s reprocessing base. Since 2012, total PRN and PERN revenues have exceeded £2.9 billion; a substantial and sustained injection of private finance into UK recycling, delivered through a market mechanism rather than direct public subsidy.
It is also important to understand what the PRN system is not. It does not operate in isolation from other elements of the Extended Producer Responsibility framework. PRN revenues are generated in addition to the disposal fees producers pay under pEPR for collection and sorting of household packaging waste. Together, these mechanisms mean producers are funding the full chain of activity, from kerbside collection through to reprocessing that constitutes a genuinely circular economy for packaging.
Opportunities for improvement
Supporting the PRN system is not the same as arguing it is beyond reform. As pEPR embeds and the UK’s recycling ambitions continue to increase, Defra’s current review of the PRN framework presents a genuine opportunity to strengthen the model while preserving the features that have made it effective.
Beyondly has identified two priority areas where action from Defra is needed:
Transparency and confidence in PRN issuing and trading. The PRN market functions on the basis of accurate, timely information about supply and demand. Opacity in evidence issuance, or uncertainty about what reported volumes actually represent, risks undermining the market signals on which the system depends. Greater transparency in how PRNs and PERNs are issued and traded would improve market confidence and reduce the potential for misinformation about system costs and performance.
Timely availability of recycling data. During 2026, the rollout of the Environment Agency’s new digital reporting platform (RPD) has created significant gaps in published UK packaging recycling volumes. These data gaps have reduced market visibility, making it harder for compliance schemes, reprocessors, and producers to interpret supply and demand signals, and added unnecessary pressure to PRN markets at a time of already heightened uncertainty. Restoring timely, reliable data publication must be a priority if stakeholder confidence in the system is to be maintained.
The key challenge for policymakers is to preserve the responsiveness and market-based incentives that have underpinned the system’s success, while identifying targeted improvements that address legitimate concerns from across the supply chain.
Looking ahead
As pEPR continues to embed, debate around compliance costs and system design will intensify. That is to be expected, and welcomed, provided it is grounded in evidence. The PRN system is not perfect. No system of this complexity, operating across a dynamic global recycling market, ever could be. But its track record of delivering compliance, channelling investment, and adapting to market conditions over nearly 30 years, is a foundation worth building on, not dismantling.
“No system is perfect, but the PRN framework has demonstrated a unique ability to respond to market conditions, incentivise recycling activity, and support the achievement of national recycling objectives. However, more can be done to stamp out fraud and drive great investment in recycling infrastructure. We call on Defra to thoroughly review the system to ensure the UK continues to benefit from a market-based solution that has helped drive progress in packaging recycling for nearly 30 years.”
