The document discusses the PRN (Packaging Recovery Note) system introduced in the UK to meet packaging waste recycling targets by creating a market for packaging waste collection through the issuance and trading of PRNs, noting that the PRN system has helped stimulate substantial growth in UK packaging waste recycling and recycling infrastructure investment. The Environment Exchange marketplace has played a key role in facilitating over 1 million tons of annual PRN trading to help obligated packaging producers prove compliance with recycling obligations.

1. The PRN system: Introducing a
free market to packaging waste
collection
Angus Macpherson
Managing Director, The Environment
Exchange
Eco-Invest 2012, Kiev
3 October 2012

2. Outline
• Setting the scene
• What is the challenge?
• The Packaging Cycle
• What is a PRN?
• How do you price a PRN – Theory and Practice
• What has the system achieved?
• Conclusion

3. Why me?
• Involved with Producer Responsibility in the UK
from 1997
• Consultee to the Office of Fair Trading in the UK
on Producer Responsibility
• Founder member of the CO2 Emissions Trading
Group in the UK
• Involved in the development of the Renewables
Obligation in Europe and the UK
• I was asked!

4. Setting the scene
1. Local Authorities have a statutory obligation in
the UK to collect waste from domestic
households and dispose of it.
2. Domestic households all pay council tax to the
Local Authority.
3. Businesses pay rates to the Local Authority but
are responsible for the costs of their own waste
disposal.
4. All inputs into landfill sites are taxed by
National Government.
5. No funds from Producer Responsibility regimes
go directly to National or Local Governments.

5. What is the challenge?
1. To prove that the target percentage of
packaging handled in the UK has been
recycled.
2. Target percentage = total packaging waste
recycled / total packaging waste handled.
3. Steps to achieve it:
a. Find out how much packaging is handled in the UK
b. Find out how much UK packaging waste is recycled
c. Stimulate growth to the requisite target

6. The Packaging Cycle
P r im a r y R a w M a t e r ia l
P a c k a g in g S e c o n d a r y R a w M a t e r ia l
M a n u fa ct u re r
R e c y c le d
C o m p li a n c e T h e E n v ir o n m e n t 26%
S ch em es Ex ch an g e m in im u m cs
ro
p
e
R
R eco v ery /
P a c k a g i n g C h a in
W aste to E n erg y
/ In d u stry
W aste
26 %
C o m p a n ie s
48%
P a c k a g in g F lo w
m a x im u m
D o m e s t ic M in o r P a c k a g i n g F l o w
C o n su m er Lo cal S a le o f E v id e n c e ( P R N s )
A u t h o r it ie s
L a n d f ill

7. What is a PRN
Evidence issued by a reprocessor accredited by the
appropriate Agency:
of the acceptance of packaging waste for reprocessing
And:
required by obligated companies and compliance schemes as
their representatives as evidence of compliance
And:
required by compliance schemes as evidence of investment in
new reprocessing and collection activities

8. Pricing the PRN
to d ay to m o rro w TO TAL CO ST O F
D ISPO SAL O F
RECYCLED
PR IC E O F C O M M O D IT Y
£ 's RECYCLED
C O M M O D ITY
PR IC E O F
RECYCLED
TO TAL CO ST C O M M O D ITY
O F D ISPO SAL
PR IC E
OF
OF PRN
REC YC LED
PRN PR IC E O F PR N
C O M M O D IT Y
CO ST O F
CO ST O F W ASTE
W ASTE D ISPO SAL
D ISPO SAL
1998
© E n v ir o m a c 1 9 9 8 T IM E

11. Conclusions
1. The PRN system has risen to the challenge.
2. The PRN system has contributed to packaging
waste recycling growth.
3. The PRN system has injected substantial funds
into the UK recycling infrastructure delivering
genuine environmental benefits.
4. The PRN system has proved itself flexible
when crisises have arisen.

12. What is t2e?
The Environment Exchange:
• Internet based Integrated Marketplace provides:
Information – Smart
Transaction – Simple
Settlement – Safe
Dispute Resolution - Solutions
• Launched PRN marketplace 28 November 1998
• Traded 1million PRN tonnes in 2009 and 2010
• Launched UK Collected Recovered Paper Market -
11 March 2011
• Opens China Delivered Recovered Paper Market -

14. Thought
"The best way to predict the
future is to create it."
Dr Peter F Drucker
Rankin Clarke Professor of Social Science and
Management at Claremont Graduate University
"The most influential observer in modern business
history" - Training & Development Magazine