Quality
Many in the reprocessing industry are suggesting that more is less in that as the collection volumes increase the quality of the material is deteriorating. It therefore requires more segregating post-delivery and/or is harder wear on processing machinery. So the material is not only less valuable but also less utilisable. This view is reinforced not only by high profile prosecutions by regulatory bodies but also despite the rather onerous bureaucracy of the Trans-Frontier Shipment of Waste regulations, China and Indonesia – and quite possibly a precedent which will be followed by other major importers of secondary raw materials – now operate quality control agencies at the points of departure as well as at the point of arrival.
Collectors/suppliers feel that standards have remained the same but that now there are increased volumes there is a greater choice and there is a greater opportunity for buyers to be more discerning. Buyers argue that collection volumes as well as quality are going down. While there are always two sides to an argument it is rare that there is smoke without fire! However until there is a benchmark quality standard, for example the emerging EN643 for recovered paper, there is no method to identify, measure or verify/validate these quality disputes nor is there an arbitration mechanism.
Transparency Price is the ultimate arbiter of quality but without price and market transparency it is very difficult to determine what is or is not a ‘good’ price for either the buyer or the seller. Price is determined by so many factors of which quality is just one. Availability, packing type, payment terms and logistics are some of the other factors. Unless these factors are enclosed within a standard contract, price transparency does not exist. An index is unlikely to be compiled taking all these factors into account. So how else may price and market transparency – information so vital in justifying the investments of new and old participations alike – come about? A marketplace.
So how might a marketplace help resolve these issues? To join a marketplace, participants need to meet the participation criteria. These will include both quality and financial checks. To meet these criteria is prestigious. Participants will also need to agree to abide by the code of conduct that provides the regulatory framework for trading, settlement and dispute resolution. To be suspended as a result of failing to abide by the code of conduct undermines a business’s credibility. A marketplace trades standardised contracts factoring in quality, payment terms and logistics as a consequence providing easy to interpret transaction price information. Additionally it aggregates buyers and sellers providing both parties with volume information and confidence on the availability of both buyers for prospective sellers or sellers for prospective buyers, while the rules of participation provide dispute resolution and quality control mechanisms. An integrated settlement service
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not only takes the hassle out of trading but also increases its security and allows the process to be both monitored and audited. Such facilities have been adding value to many primary, agricultural and non-ferrous metals for centuries, facilitating their expansion and becoming more sophisticated as they develop. However at a most basic level, delivering a service to those involved in the industry remains the core to the success of these marketplaces.
The Environment Exchange The Environment Exchange (t2e) is a marketplace provider. It is an integrated internet-based regulated marketplace operator providing both settlement and dispute resolution services. It currently provides the United Kingdom’s marketplace for Packaging Recovery Notes (PRNs) and Waste Electrical and Electronic Equipment Evidence Notes (WENs), which is the evidence of compliance needed by businesses with a legal obligation under the Producer Responsibility Obligations (Packaging Waste) Regulations. PRNs expressed in tonnes represent packaging that has been reprocessed either within the United Kingdom or overseas. In 2010 for the second year in a row over 1 million tonnes of PRNs were traded through t2e, and of these almost 50% were Paper Packaging PRNs.
In a two year project funded through the Government’s Knowledge Transfer and Innovate programmes, t2e has just launched a marketplace for collected contracts (ex- works) for recovered paper within the United Kingdom. If you wish to learn more about how to take advantage of the opportunities that this will present, please contact Andy Hanke (
ah@t2e.co.uk) or Yaya Cao (
yc@t2e.co.uk) at t2e on 0131 473 2337.
Use the power of the marketplace. It is smart, simple, safe trading.
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