Progress on ECB’s Environmental Cash Programme

The Banco de España has issued a press release about meeting the European Central Bank’s (ECB) waste goal for banknotes. It puts this in the context of the ECB’s wider programme.

The ECB has taken a number of steps to reduce the environmental impact of euro banknotes. In 2012 the €5, €10 and €20 euro banknote specifications changed to include a varnish coating to extend their average note life. Longer life reduces the need to replace notes, which means fewer raw materials and energy used to produce the notes are needed.

In 2014 the ECB decided only to use cotton from sustainable sources, with a transition through until 2023 to achieve this. The Dutch National Bank had been the pioneer of this idea.

The cotton used in banknotes is cotton waste from the textile industry; in a sense it is already recycled material.

As part of its drive to reduce the environmental impact of banknotes, the ECB decided to ban any waste from banknote destruction or other production processes from going to landfill. The decision was made in 2020, and national central banks (NCBs) of the Eurosystem have until this year to achieve this. Waste must be recycled. If this is not possible, it can be used in energy recovery solutions.

The Banco de España achieved the zero waste goal in 2021 and is planning to recycle about 20% of its waste, with the rest going to energy recovery. It is researching more environmentally friendly recycling systems.

A key part of any environmental impact programme is to have good metrics against which to measure. The European Commission’s Product Environmental Footprint initiative has a widely used methodology. The ECB calculated the impact of cash in 2004 and is currently updating this work. The 2004 work originally drove the changes listed above, including in addition, manufacturers of cash having to hold the ISO14001 environmental certificate.