Compliance Costs – PRNs and PERNs

What costs are involved in Compliance?

Businesses that have an annual turnover of more than £2 million and handle more than 50 tonnes of packaging per year must meet the recovery and recycling obligations set out by the Producer Responsibility Obligations (packaging waste) Regulations. All businesses affected by the Obligations must register with one of the regulatory/enforcement bodies - the Environment Agency (for businesses in England and Wales), the Scottish Environmental Protection Agency (SEPA) (for businesses in Scotland) or the Northern Ireland Environment Agency.

If you choose to complete your Obligations via a Compliance Scheme you will usually need to pay an annual subscription to the scheme you choose (in addition to your annual registration fee paid to the regulatory body). The price includes taking over the legal responsibilities of processing your Obligations using data provided by you. Additional to this subscription fee is the cost of purchasing PRNs/PERNs on your behalf to provide evidence of your compliance.

Should you wish to deal with your Obligations and compliance yourself, you will still need to make the annual payment to the regulatory body, but will not pay subscription to a Compliance Scheme. Instead, you will be able to source PRNs/PERNs yourself direct from accredited reprocessors. You will, however, be responsible for the administrative and legal liabilities involved in the Obligation system.

Obligated businesses do not have to physically recycle their packaging waste themselves to qualify for PRNs/PERNs. PRNs/PERNs are applicable to any waste that has been sent for recovery or recycling by an obligated business and can be purchased as proof of this from the reprocessor the waste is sent to.

What are PRN's/PERN's?

The Packaging Waste Recovery Note (PRN) or Packaging Waste Export Recovery Note (PERN) is a tradeable certificate used to record and identify packaging waste materials received for recovery or recycling.

How do they work?

Those businesses who are obligated to recover and recycle packaging under the Obligations must obtain PRNs/PERNs as proof that they have achieved their targets and therefore achieved compliance with the regulations. These can either be obtained through joining a Compliance Scheme or by dealing direct with accredited packaging reprocessors.

PRNs/PERNs are purchased against the amount of packaging sent for recovery or recycling. They are traded and so have a market value. PRNs are issued relating specifically to the material that has been recycled.

How much are PRNs/PERNs worth?

As with many other commodity markets, the value of PRNs and PERNs does fluctuate. The balance between supply of and demand for PRNs/PERNs can have a dramatic effect on their value, i.e. when there are many plastic PRNs/PERNs available, the price will be low and similarly, when PRNs/PERNs are in short supply, the price will rise.

An indication of plastic PRN prices can be found here


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