RPS Intervention: What this means for you
On Friday 9 October, a Regulatory Position Statement (RPS) was issued by the UK environmental regulators following Defra's review of the exceptional conditions affecting the UK PRN market.
This is a significant and welcome development, particularly following the exceptional PRN pricing pressures experienced throughout 2026.
However, while the application of the RPS is expected to provide some welcome financial relief, its wider impact on PRN market prices and final annual compliance costs remains uncertain.
The RPS and your 2026 compliance
An RPS does not change the underlying regulations or statutory recycling targets. Instead, it outlines the circumstances under which the regulator will take a particular approach to enforcement.
In this instance, the RPS confirms that, provided the conditions of the statement are met, enforcement action will not normally be taken where PRNs are obtained to cover the following proportions of the original 2026 requirements:
Plastic – 83% of the original requirement (17% reduction)
Steel – 92% of the original requirement (8% reduction)
Wood – 90% of the original requirement (10% reduction)
This means UK packaging producers, or their compliance scheme will need to obtain fewer PRNs for these materials. The extent of any cost saving will depend on the cost of evidence already purchased and market prices for the remainder of the year.
Please note that these reductions have been put in place because these materials were considered most at risk of the UK not meeting compliance, following reduced availability of recycling evidence this year. Other materials are considered likely to meet their recycling targets, so they are unaffected and full PRN requirements continue to apply.
PRN market prices
While the reduction in PRN purchasing quantities will provide a financial benefit, it is still too early to determine the full impact of the RPS on market prices and final annual compliance costs.
Reducing demand for PRNs has the potential to ease some of the exceptional supply pressures experienced throughout 2026. However, initial market movements have been mixed.
At the time of writing, plastic prices have shown some early signs of softening, while steel prices have seen relatively little movement and wood prices have increased.
It is also important to recognise that a significant proportion of this year's compliance year and therefore PRN purchasing has already taken place at exceptionally high market rates, with purchasing for the remainder of the compliance year still ongoing.
Looking ahead – 2027 and continued regulatory engagement
The introduction of the RPS is an important step towards addressing the exceptional challenges we have consistently highlighted throughout 2026.
We have continued to engage directly with Defra, the Environment Agency, and wider industry stakeholders to represent our members' and UK packaging producers’ interests and raise concerns about the significant imbalance between PRN supply and demand, and the impact on pricing.
While the intervention is welcome, it does not resolve all the underlying challenges within the PRN system. Our engagement therefore continues, both in relation to closing out 2026 and looking ahead to 2027.
Importantly, we understand that Defra intends to review the 2027 recycling targets against the revised understanding of PRN supply established through the RPS process.
We will continue to actively contribute to these discussions, working towards a more effective and sustainable PRN market that supports meaningful recycling improvements at realistic and sustainable costs for UK packaging producers.
We recognise that 2026 has been an exceptionally challenging year for our UK packaging producers, with significant financial pressures and continued uncertainty surrounding PRN availability and pricing.
The introduction of the RPS is a positive development and represents meaningful progress towards addressing the issues we have been raising with government and the regulator throughout the year.
We remain committed to securing remaining PRNs required for our members to secure compliance at the best available value, minimising overall costs and continuing to push for improvements as we move towards the end of 2026 and into 2027.
