This week we attended the CIWM technical meeting in Belfast to discuss the implications of the recently introduced National Sword Initiative for UK exporters of recyclable material into China. For those that are not aware the Chinese authorities have restricted the issuing of import licenses to companies who have previously shipped Plastic and Mixed Paper grade material into the country. It is seen by most as a way of the Chinese government improving their environmental performance and reducing pollution. The reliance on the Chinese market for UK exporters has resulted in some now struggling to move material.
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With the last set of monthly supply figures released this week for the 2017 compliance year we now have some supply evidence to review last year’s performance. These figures are unaudited and are likely to change once they are published but provide some indication on last year’s performance.
Next year we are due to see recovery target increases across all materials. While in most materials this will lead to a small incremental increase there are some concerns regarding the Wood target increase which is due to rise from 22% to 38%. This increase will result in obligations growing from 244,000 tonnes to 417,000 tonnes, the largest increase since Wood targets were introduced.
The Environment Agency have now released the second set of quarterly supply figures for the year and the early indications are that all materials remain in good supply. It was anticipated that the introduction of new export protocols in China would result in a tightening of Plastic PRN supply but this has not materialised with supply coming in on target.
This year we have seen a vast increase in the costs of securing recycling evidence notes for Plastic. Upon examination, the supply figures for this market appear to be robust with a small surplus being created at the end of Q1. This follows on from a strong finish to last year’s supply providing a credit balance of 4% from 2016.
On the 15th May the Environment Agency released the first set of packaging handled figures for 2017. These figures allow us to review any increases in obligations and help determine the effect of this year’s target increases.
Growth reported for 2016 across all materials
The Environment Agency have now released preliminary recycling figures for 2016 which show compliance was met with relative ease last year. Growth was reported across all materials with some performing a remarkable turnaround on the 2015 compliance period.
With the release of the Q3 supply figures providing the last indicator of supply this year we look at the projected outlook for the end of the year. Total supply was in line with the previous quarters and with only a small tightness in Glass Aggregate supply providing concern.