The OM Environment Exchange, the electronic marketplace for the trading of packaging recovery notes (PRNs), has traded almost 40,000 tonnes since it was established two years ago. It has marked this anniversary by warning companies using compliance schemes that they are being charged too much for PRNs.


The warning came from Angus Macpherson, managing director of the Environment Exchange, who declared: For the third year in a row, we are seeing the prices of PRNs being traded through the Exchange at significantly lower prices to those available from compliance schemes.


Macpherson continued: I think there is an element of trying to buy the risk, and the risk being the long-term availability.


There is still an immature use of the market, and I think this is down to the users not understanding how to use a niche market such as ours. In each of the commodities our prices are turning out to be between 25-50% cheaper than those currently being offered by compliance schemes, he claimed.


With regard to paper, the Environment Exchange is currently offering PRNs for sale at between 5-10 per tonne, while Valpak, for instance, is trading at 10 per tonne.


Customer service team leader at Valpak, Nigel Smith, said: Although we have been criticised in the past for being 5-10% higher in price, we view it more in terms of a long-term strategy. We have on-going two- to three-year rolling contracts with our repro-cessors for supply of PRNs.


Next year we will begin to see the regulations operating as they should do for the first time. With the targets likely to be as high as 58% recovery, we could see excess demand for PRNs, and it will be interesting to see if the Environment Exchange will be able to meet demand, he added.


Story by Andy Scott