November 2015

Joe Papineschi Proposes Measures to Counter Volatile Recycling Prices

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Joe Papineschi yesterday set out two ways in which materials price risk can be better managed to prevent its negative impact on recycling.

Speaking at the All-Party Sustainable Resource Group (APSRG) in Westminster, Joe proposed:

  • The development of a local authority ‘stability fund’, which would allow councils to invest when material prices are high, and then receive payments when prices fall. It could also allow councils to make wider use of risk pooling and joint materials marketing to further reduce the costs and risks of trading in materials; and
  • Reforms to the Packaging Recovery Note (PRN) system to increase its effectiveness as a means of supporting recycling. A counter-cyclical PRN system would ensure that packaging producers pay most into the scheme when low raw material prices make it most affordable, and provide greater stability in secondary material prices.

These measures, which Eunomia discussed in a recent report for Resources and Waste UK, could help reduce the damaging volatility in the prices that recyclable materials command, without the need for the Government to provide direct financial support.

Low and unpredictable prices have contributed to the recent failures of key plastics reprocessors, and create challenges for those who might look to invest in recycling facilities in the UK. They also make it harder for local authorities, faced with ever-tightening budgets, to present a robust business case for increasing their recycling efforts.

The event, entitled ‘Managing Risks in the Secondary Materials Market’, was chaired by Dr Alan Whitehead MP, and featured speakers including Steve Lee of CIWM, Peter Clayton of packaging recyclers DS Smith, and Andy Doran of metals reprocessor Novelis.

The event was well attended by parliamentarians and members of the APSRG from across business, industry, the third sector and private sector. All have a common interest in sustainability and desire to improve policy surrounding sustainable use of resources.