What Makes Polymer Banknotes Green?

For many people, their perception of plastic is negative. Plastic is one of the world’s ‘bad guys’ these days, with newspaper headlines and TV programmes dominated by images of polluted oceans or mountainous garbage dumps. But, as always, the truth is more nuanced than the ‘all plastic is bad’ trope might have you believe.

Certainly, our society faces major challenges caused by pollution, and some plastics play a large role in those challenges. But in the banknote industry, extensive and in-depth research studies carried out by central banks around the world all come to the same, evidence-based and data-driven conclusion: polymer banknotes are greener than paper alternatives.

To understand why, you have to look at the whole life cycle of a polymer banknote. The five key stages of any banknote life are substrate production, transportation to the printworks, printing, circulation, and end of life. These elements all have to be taken into account as part of a Life Cycle Analysis (LCA). In other words, we need to look at banknotes with a 360° perspective, including how they interact with the cash cycle as a whole.

There are a number of factors which impact on sustainability. Life Cycle Analysis is the tool used to measure these factors and impacts. The most commonly known impact is climate change, but it’s not the only one, the others being excess nitrogen, air quality, water scarcity, toxicity and biodiversity.

To date, four central banks – Reserve Bank of Australia, Bank of Canada, Bank of England, and Banco de México – have completed comparisons of the impact of paper and polymer banknotes on the environment using this detailed tool.

The results, published on the banks’ websites, all show significant benefits for polymer over paper, including ‘long life’ papers. In Canada ¹, there was a 30-60% improvement in all categories, cradle to grave.

In Mexico ², the differences were even greater in all categories. The impact on climate change, for instance, is 50% less with polymer and water depletion is 99% less. These results are definitive, far from marginal, and well beyond any boundary of uncertainty. We see similarly positive results for polymer banknote studies in England and Australia.

Mexico peso polymer vs long life paper comparison. ALO (agricultural land occupation), CC (climate change), FD (fossil resource depletion), FE (fresh water eutrophication), HT (human toxicity), MRD (mineral resource depletion), OD (ozone depletion), POF (photochemical oxidant formation), TA (terrestrial acidification), TET (terrestrial eco-toxicity), and WD (water depletion). Each figure is normalised to the highest value.

In the UK, the figures ³ show circulation has the biggest environmental impact, accounting for around 70% of the total. This is mainly due to the transportation of banknotes around the country and distribution to ATMs.

The second biggest impact is substrate production. As they last much longer than paper, we know that many fewer polymer banknotes need to be printed. The study assumed 2.5 times fewer. In reality, the figure is 3-5 times fewer.

At the final stage in a banknote’s life – withdrawal from circulation – there are three possible options: landfill, waste to energy, or recycling.

CCL Secure already helps central banks to recycle 90% of their GUARDIAN™ polymer banknotes into polypropylene pellets which in turn are used to make other polypropylene products, such as clothing, construction materials, and garden furniture. Ultimately, say the company – who’ve led the world in polymer banknote technology for decades – the aim is for 100% of their polymer banknotes to be recycled.

The commitment to recycling is evidenced by CCL Secure’s award-winning global recycling programme, which was shortlisted for the IACA Excellence in Currency Awards for Best Banknote Processing Innovation in 2017. In 2021, IACA also shortlisted CCL Secure for Best New Environmental Sustainability Project, recognising the efforts undertaken to reduce the environmental impact of its manufacturing operations. In the 2021 Central Banking Awards, CCL Secure took the Currency Services Initiative award for its global recycling initiative.

On the ground, CCL Secure is busy consolidating its green credentials by opening a recycling plant at Zacapu in Mexico in 2020. The new plant has enabled CCL Secure to become the first supplier of polymer substrate to be able to offer a secure recycling service for their end-of-life GUARDIAN notes.

In addition, the company has invested in improving its environmental performance in other areas, such as a project to reduce gas usage by 50% and improve air quality by up to 75% at their production facilities in Wigton, England. The same Wigton plant has also reduced its carbon intensity (greenhouse gases) by 20% since 2018 across all three GHG Scopes – without using carbon offsetting – by assessing new projects for their environmental impact, reducing energy usage, making environmentally-based supply chain choices, and investing capital to bring processes in house.

So, while plastic may have a deservedly bad reputation for environmental impact in many areas of life, in the world of banknotes, the reputation is neither deserved nor true. Look beyond the populist headlines to the impressive and meticulously researched facts and the simple fact is that polymer banknotes are better for our planet.

It may be a counter-intuitive concept at first sight, but not all plastic is bad and, in the case of polymer banknotes, it is an environmentally positive choice.

References:

1. LCA BoC www.bankofcanada.ca/banknotes/bank-note-series/frontiers/life-cycle-assessment-lca

2. LCA BdM

3. LCA BoE https://www.bankofengland.co.uk/-/media/boe/files/banknotes/polymer/lca-of-paper-and-polymer-bank-notes.pdf