Unfit Banknote Recycling Solutions – a Study from Kusters

Last month, we featured a summary of the recently published white paper ‘What Goes Round Comes Round’ by Reconnaissance, based on a survey of 52 banks which examined the end-of life options for cotton banknotes. The topic of repurposing banknotes formed one of the sessions at the Cash & Payments Sustainability Forum in Edinburgh, with Royal Dutch Kusters Engineering (Kusters) also presenting its work in this area.

This month, we feature that work, involving a survey by Kusters among central banks and printing works in 82 countries worldwide. The investigation related to the method of disposal of the unfit banknotes once removed from circulation and destroyed. The big question being what is then done with the destroyed notes, since there are several methods of disposal.

Kusters, a family-owned company founded in 1911, has been at the forefront of destruction and shred handling equipment for both banknotes and coins since the 1970s, and has an installed base of more than 700 systems in various applications in over 80 countries. It also specialises in waste management products. It is well-placed, therefore, to take a lead on not just destroying end of life banknotes, but on guidance and solutions for dealing with the subsequent waste as well.

The shredded banknote recycling process is often arranged depending on the volume of the banknotes, whether these are shredded centrally or at separate individual locations, the maturity level of local recycling markets and, last but not least, the wide variety of note substrates, inks and security features.

The re-use of shredded and briquetted banknotes continues to be done worldwide in various ways. There is not an overall policy or solution about what to do. Each country has a different approach that depends on regulations, circumstances, costs and available options, as well as the type of banknote substrate being used, eg. pure polymer, cotton or composite banknotes or a mix of these.

In Kusters’ survey, the 82 countries that took part were divided amongst six continents. 97.2% of the participants were central banks. Unlike the Reconnaissance survey, which focused on paper only, the Kusters survey covered all substrates. As Fig 1 shows, most of the central banks have only cotton banknotes in circulation and a small percentage only polymer or composite. Where mixed substrates are used, the biggest proportion is a mix of cotton and polymer.

Fig 1: Breakdown of substrates – cotton, polymer and mixed (composites). Source: Royal Dutch Kusters Engineering.

Methods of disposal

As Fig 2 shows, most central banks (75%) use landfill and burning for the disposal of banknote waste. Fig 3, meanwhile, shows the breakdown of disposal methods by continent for paper and polymer respectively.

Fig 2: Top four methods of banknote disposal per type of substrate. Source: Royal Dutch Kusters Engineering.

Dumping in landfills does not recover any energy and does not have a useful environmental benefit. It requires the central bank to consider security, technical, economical, and environmental issues more than alternative approaches. With landfill, a reliable method for disintegrating currency is particularly important. The environmental issues with dumping banknote shreds in landfill led Kusters to recommend avoiding this as a solution.

Uncontrolled burning where the banknotes are not used as a source for energy is the least environmentally friendly way of disposal. It continues to be used where there is a lack of infrastructure, and/or because it is relatively convenient and cheap.

Fig 3: Breakdown of disposal by continent for paper (above) and for polymer (below). Source: Royal Dutch Kusters Engineering.

Sustainability

The survey showed a growing awareness of sustainability, although it is often not implemented throughout the organisation. Two thirds of the participants of the survey did not consider changing their current method of disposal. However, the wish to outsource disposal by recycling unfit banknotes was high (72%). Half of the participants said they were willing to pay more for a sustainable method of disposal.

According to Kusters, its goal is to ‘bring the industry together to contribute to a more sustainable cash cycle, in which the secure destruction and re-using is an essential part’, and ‘to give unfit banknotes a second life so they can be part of a circular economy so that the life cycle of banknotes is extended’.

During the Cash & Payments Sustainability Forum in Edinburgh, Kusters also presented the latest developments to recycle unfit banknotes for cotton as well as polymer shreds, such as the production of high quality furniture, 100% made of polymer shreds. A footstool in which the body is made of polymer shreds and the top of cotton shreds was a particularly eye catching example.

And shredded unfit banknotes can be used as a source to produce board panels of high quality, also a mix of 100% recycled material.

To obtain a copy of the complete outcome of the survey, fill in the request form at www.royaldutchkusters.com.