Reforming the PRN System: Defra’s Public Consultation Explained

Defra has opened a consultation on reforms to the UK’s PRN system; changes that could significantly reshape the waste sector.

View the consultation here

What is the PRN system?

Packaging Waste Recycling Notes (PRNs) and Export Recycling Notes (PERNs) are issued by accredited reprocessors and exporters for each tonne of packaging waste recycled.

Under the Producer Responsibility Obligations (Packaging and Packaging Waste) Regulations 2024, businesses must fund the recycling of the packaging they place on the market. They do this by purchasing PRNs/PERNs as evidence of compliance.

The need for reform

Within the detailed consultation paper, Defra explores the system’s shortcomings and outlines a roadmap for potential reforms. 

Defra’s consultation recognises that, despite recent improvements, the PRN system still requires reform to operate effectively in practice. The proposals aim to reduce the risk of fraud and error, improve the accuracy of recycling evidence, and ensure a more consistent and equitable approach to how PRNs and PERNs are issued.

A key focus is addressing differences between UK reprocessors and exporters, which have raised concerns about an uneven playing field. More broadly, Defra emphasises the need to enhance transparency and oversight to maintain confidence in the system and support long-term investment in recycling infrastructure.

Proposed reform

Defra’s consultation focuses on five areas:

1. Standardising measurement: PRNs/PERNs would be issued based on material measured at a consistent point in the recycling process, ensuring consistency between UK and overseas processing.
    
2. Updating technical standards: National protocols and industry grades would be regularly reviewed and updated.
    
3. Cancelling invalid notes: Regulators could revoke PRNs/PERNs issued improperly, even after sale and use.
    
4. Flexibility in shortages: A mechanism (e.g. a fee or extension) would apply where market shortages make compliance impossible—avoiding technical non-compliance.
    
5. Greater transparency: More data would be published on suspensions, cancellations, and trading.

What happens next?

The consultation closed in May 2026. Defra will publish responses, though details and industry reaction remain unclear. Further consultation on wider reforms is expected.

Impact on businesses 

Overall, for businesses, these tighter controls are intended to tackle long-standing issues within the system. If implemented, they should reduce fraud and market manipulation, helping to create a more level playing field between operators. In turn, this would support fairer competition and allow PRN prices to better reflect genuine recycling activity, benefiting those businesses that already invest in proper compliance and processes

However, the proposed reforms are likely to increase the compliance burden on businesses, requiring more rigorous due diligence when sourcing PRNs/PERNs and adding to administrative costs, particularly for smaller operators. There is also a degree of uncertainty introduced by the potential for regulators to cancel notes retrospectively, which could leave compliant businesses exposed if, for instance, they have unknowingly purchased invalid evidence.

While details are still emerging, the reforms aim to restore trust and integrity in the PRN system. If implemented effectively, they could deliver a more transparent and level market, benefiting compliant businesses in the long term.