A new consultation set to reshape packaging and recycling policy
The government has launched a crucial consultation that will shape the future of packaging waste and recycling, and could have implications for business and the wider recycling sector.
Understanding PRNs and PERNs
Under Producer Responsibility Obligations, producers of packaged goods are required to fund the recycling of an equivalent amount of packaging waste.
Producers must do this by purchasing a Packing Recovery Note (PRN) from UK reprocessors or a Packaging Export Recovery Note (PERN) from exporters. These are tradeable certificates that demonstrate that a company has met its legal obligation to recover and recycle a specified tonnage of packaging waste, with the revenue generated flowing back to the reprocessing and exporting sector.
What reform is needed
The Department for Environment, Food and Rural Affairs (Defra) has identified several critical challenges with the current system that these reforms aim to address.
Tackle fraud and error
Fraudulent PRNs and PERNs issued for non-existent or ineligible waste artificially suppress market prices, reduce revenue for legitimate operators and discourage investment in UK recycling infrastructure.
Create a level playing field
Less stringent requirements for exporters compared to domestic reprocessors have created an unfair competitive advantage that needs addressing.
Protect the environment
Mismanagement of UK packaging waste exported overseas causes environmental damage and undermines the UK's environmental commitments.
Build resilience
The UK's heavy reliance on export markets remains a vulnerability, as shown by China’s 2-17 waste import ban causing significant market disruption. demonstrated by the significant market disruption following China's 2017 waste import ban.
Key measures at a glance
The government will implement several measures without consultation.
- A new Fraud Detection Initiative bringing together regulators, industry, and digital experts
- Improved data sharing to increase market transparency and reduce price volatility
- Enhanced cross-regulator cooperation across the four UK devolved regulators
The following measures are subject to the consultation:
Clearer guidance
How regulations apply, ensuring all accredited operators issue evidence based on recyclable packaging content after sorting and cleaning.
Updated protocols and standards
Nationally Agreed Protocols and Agency Agreed Industry Grades (AAIGs) for paper, steel aluminium and glass will be time-limited and reviewed at least every three years.
Strong enforcement powers
The ability for regulators to cancel fraudulent PRNs/PERNs, removing improperly issued certificates from the market and incentivising greater due diligence.
Compliance safety nets
New mechanisms to support businesses facing genuine shortages, including a fee mechanism (subject to ministerial approval) and a year-end extension allowing limited carry-forward of evidence between compliance years.
Greater transparency
The publication of sanctions, mandatory registration and quarterly reporting for PRN/PERN brokers and trading platforms.
What's coming next?
The current consultation is open for responses until 5 May 2026, however Defra has confirmed a second consultation will follow, focusing on longer-term reforms to boost domestic reprocessing, particularly for plastic and glass. This will include proposals for minimum material sorting standards and material-specific domestic reprocessing targets designed to drive investment in UK-based facilities.
Our perspective
We welcome Defra's commitment to tackling and reducing fraud within the system. It is crucial that Defra's focus empowers the regulator to pursue major criminal activity, rather than simply imposing additional burdens on legitimate businesses. A fairer, more transparent, and fraud-resistant PRN/PERN system is essential for building a strong domestic recycling sector and delivering on the UK’s environmental ambitions.
We will be engaging actively with the consultation process and we would be delighted to discuss the proposals and how they might impact you.
Need some advice?
For more information or to discuss how these changes may affect your business, please get in touch with your Veolia UK account manager.