MetalFlow 2014

4th March 2015

A review of the the quantity of aluminium and steel packaging being both placed on the market (POM) and reprocessed for the year 2012 (and 2013 where data was available). The report also includes a scenario analysis for each packaging material to 2020.

Key points
Quantity of aluminium packaging POM in 2012 estimated at 178k tonnes (174k tonnes in 2013), which implies a recycling rate of 35% in 2012.
Quantity of steel packaging POM in 2012 is estimated at 524k tonnes (529k tonnes in 2013), which implies a recycling rate of 68% in 2012.
Both POM figures are based on a new methodology, ‘net pack fill’, which uses published Environment Agency data.
On the basis of these estimates, the UK met its 50% combined aluminium and steel packaging recycling target in 2012, achieving 60%.

Background

This project was commissioned by WRAP and Valpak to provide support for material estimates in Defra’s packaging policy work. Its aim was to review the quantity of aluminium and steel packaging being both placed on the market (POM) and reprocessed for the year 2012 (and 2013 where data was available), and to provide a scenario analysis for each of the materials going forward to 2020. To achieve this, this project engaged a stakeholder group that provided input and expert market knowledge at all stages of the process. The group comprised organisations such as Defra, the Environment Agency, Alupro, the Metal Packaging Manufacturers Association and Tata Steel, amongst others. This spread of group members ensured that the project team had access to the best market knowledge available.

Aluminium packaging

The most robust estimate that could be derived, based on publicly available data, suggests that the quantity of aluminium packaging POM in 2012 was 178k tonnes and 174k tonnes in 2013 (subject to revisions of National Packaging Waste Database (NPWD) data, which was updated in January 2015). This is a threshold estimate as there was an element of packaging being POM by smaller organisations that was unaccounted for within this estimation. However, discussions with the steering group suggest this may be fairly minimal for aluminium. In 2012, the level of aluminium reprocessed by accredited reprocessors (those registered with the Environment Agency) was 62k tonnes, suggesting a recycling rate of 35%. However, for aluminium it was highlighted that a large element of reprocessing was unaccredited (i.e. by reprocessors not registered with the Environment Agency); this was estimated to be 19k tonnes. Including this would have increased the recycling rate from 35% to 46% in 2012.

Steel packaging

The most robust estimate that could be derived, based on publicly available data, suggests that the quantity of steel packaging POM in 2012 was 524k tonnes and 529k tonnes in 2013 (subject to revisions of National Packaging Waste Database (NPWD) data, which was updated in January 2015). This includes an element of packaging being POM by smaller organisations. Discussions with the steering group suggested this may be more significant for steel than for aluminium, and following a brief consultation with Tata Steel and the Metal Packaging Manufacturers Association, it was assumed to be 7.5%.  This is a working assumption, based on the expert knowledge of Tata Steel and the MPMA but not rooted in any robust data. As such, a more robust methodology for identifying the quantity of steel placed on the market by smaller organisations that is unreported should be developed. There was broad agreement from industry representatives on the total POM estimate. In 2012, the level of steel reprocessed by accredited reprocessors (those registered with the Environment Agency) was 358k tonnes, suggesting a recycling rate of 68%. There was an element of reprocessing for steel that was unaccredited (i.e. by reprocessors not registered with the Environment Agency), although this was estimated to be minimal at 9k tonnes in comparison with 19k tonnes for aluminium.  Including this would have increased the recycling rate only by 2% to 70%.

Meeting the EU metal recycling target

Bringing together these estimates of the amount of metal packaging POM and reprocessed shows that across the range of estimates, the EU recycling target of 50% for metal packaging was met in 2012. At best, it is exceeded by 14%, at worst by 10% when combining the estimated quantity of aluminium and steel packaging being POM with the estimates of recycling. These findings are based on a number of assumptions which are detailed elsewhere in this report.

Metal packaging placed on the market data

The estimation of the amount of metal packaging POM was based on the data reported to the Environment Agency by obligated organisations (those handling at least 50 tonnes of packaging and with a £2 million turnover are obligated) and stored on the NPWD. A methodology using this information which is termed “net UK pack fill”, focuses on the quantity of packaging reported at the packing/filling stage of the supply chain, as opposed to the selling stage of the supply chain (a pack/fill process is where goods are put into packaging or packaging is put around goods and a sell process is one that supplies packaged goods to the end user). It is believed that there are fewer unobligated packer/fillers in comparison to unobligated sellers. However, there will remain in all likelihood some unobligated packaging activity that is being missed. Since estimating the amount of unobligated packaging is notoriously difficult, a lack of data and resulting uncertainty means it cannot be estimated reliably for metal packaging. Notwithstanding these caveats, the net pack fill methodology using publically available data was deemed to be the best available methodology for metal packaging.

It is important to stress that the net pack fill estimates are themselves subject to a degree of uncertainty because they rely on the robustness of the data that is submitted to NPWD. The NPWD data is widely recognised as being the best available of its kind and scope, and is used by policymakers and their agencies. However, it is not within the scope of this report to review the accuracy of the NPWD data.

Two alternative methodologies to estimate the amount of metal packaging POM were also investigated to provide comparisons. The first attempted to build-up a total figure from adding up estimates of packaging POM in various market segments (for example the amount of metal packaging sold in supermarkets, pet stores, body care stores etc.).  The second was based on building an aggregate UK view (using data sources other than NPWD) of net metal packaging supply, i.e., packaging produced in the UK (plus imports less exports). However, for various reasons that are detailed in the report, the associated estimates derived from these methodologies were not deemed to be as robust as the net pack fill estimate.

Metal packaging reprocessed data issues

The accredited reprocessing figures were based on those that were published by the Environment Agency from NPWD returns. In addition to this, an analysis was required to estimate the amount of unaccredited reprocessing. This was calculated using the estimated number of reprocessors and exporters that were known to be operating but not accredited in 2012, and the quantity of material they would normally handle. However, this is an imperfect measure in that it misses out packaging handled by reprocessors that have never sought accreditation. There is also anecdotal evidence of accredited reprocessors who might not raise PRNs on all of their reprocessed metal packaging (although this might be marginal).

Scenario analysis

Scenarios were developed for the quantities of aluminium and steel packaging POM and the amounts being reprocessed covering the period from 2013 to 2020. A range of alternative projections for the amount of packaging POM were calculated based on; historical trends in the net pack fill estimates, the assumed growth rates in PackFlow, Defra’s estimated growth rates, and growth assumptions from industry consultation.  Accepting that there are inevitable uncertainties in such projections, based on the more robust scenarios the amount of aluminium packaging POM could increase to 187k tonnes by 2020 while the amount of steel packaging POM could decrease to 493k tonnes by 2020. Combined with technical ‘autoregressive’ projections of the amount of reprocessing (broken down between accredited and unaccredited reprocessing) the recycling rate could increase to a minimum of 46% by 2020 for aluminium and to 81% for steel. In all of these scenarios, the EU target would be exceeded in each year to 2017.