A Vision of a Circular Economy for Banknote Waste

Not many people know that Royal Dutch Kusters Engineering (Kusters) used to make fluorescent lamp recycling equipment for the electronics giant Philips, glass recycling for the brewer Heineken and coffee pod recycling for Sara Lee.

In fact, Kusters continues to be active in non-banknote areas, working on separation and dewatering technologies for paper mills and insect breeding (to create animal feed). The separation technology is to allow, for example, plastic foil to be separated from household waste or stone and glass to be separated from compost.

Kusters’ retains, therefore, both useful corporate knowledge and memory and current expertise. Important given its current focus on the environmental challenge of shredded banknotes.

Circular economy

Jeroen Kusters, Director of Sales, recently presented at the Global Currency Forum on their work in this area, starting with a useful outline of context and different approaches.

Since the industrial revolution we have followed a linear economic model – take resources, make things, use them, throw them away. The result has been unsustainable levels of waste that won’t degrade any time soon. While the goal is a true circular economy where, after use, we repair products so they can be reused, remanufacture them so we aren’t using new resources or recycle them so that we use less new resources, the world is struggling to do this. Recycling is the final step which most organisations hope to achieve.

Waste recovery pyramid

There is a hierarchy of options for what happens to shredded banknotes at the end of their life.

1. Prevention

2. Food (for humans): not applicable for banknotes

3. Feed (for animals): not appliable for banknotes

4. Technical material: the waste creates new materials

5. Composting and anaerobic digestion

6. Incineration with energy recover

7. Incineration

8. Landfill and dumping.

The first three on the list are not applicable for banknotes. The technical material option includes the research work being carried out by Landqart to see if the recovery of fibre through the autoclave process will allow the output to be used in new materials (see CN April 2022). CCL Secure and De La Rue already recycle shredded polymer notes for use in plastic outdoor furniture and other items.

A number of central banks use composting, Pakistan’s work in this area was reported in Currency News™ in November 2021. The Federal Reserve also uses composting.

The European Central Bank has issued a directive banning Eurosystem National Central Banks from using landfill. One of the challenges here is that the low volumes of banknote waste mean they have to be mixed in with other waste to be destroyed.

A central bank survey by Banknote Industry News showed that 75% of central banks disposed of their banknotes in landfill or incineration. The survey did not distinguish between incineration with or without energy recovery.

Mutual waste recovery challenges

Kusters is clear that only co-operation across the industry will allow banknote waste to move up the hierarchy of waste recovery.

When it comes to recycling, the challenges identified are:

• Relatively low volumes of waste (household waste is processed at the rate of 100 tonnes per hour, more than most central banks create in a year)

• Decentralisation of the industry but also across central bank organisations

• Maturity level of local recycling markets

• Wide variety of notes – substrates, inks, security features

• Waste follows the money.

The last of these points links to how central banks tender for the disposal of shredded notes. Lowest cost is likely to lead to notes being disposed of without environmental care.

Reuse and recycling of cotton banknotes

Whether polymer or cotton, the first priority is for the waste to be separated so that it is not contaminated by other materials.

Recycling usually involves a mechanical process. Kusters has also spent time looking at chemical recycling. It compared the relative performance of mechanical and chemical recycling against six criteria - the length of waste fibres, their composition, quality and colour, would products with 100% recycled fibres be possible and the relative costs.

The results suggested that chemical recycling would work and provide an end material with more options than mechanical recycling. The work analysed Indian rupees and euros and found relative high levels of iron, copper and silicon deposits. For example, the euro results were fe 624 parts per million (ppm), cu 115.8 and si 1684. These levels were too high to cater for chemical recycling.

There is a need for the industry, and central banks, to re-look at what components in the product are creating these levels and whether alternative materials can be used.

20 years ago Kusters used banknote waste to create board panels that were turned into furniture. At that time the cost was too great for this to be commercially viable. This is no longer true. Kusters is working with a partner to use cotton in high value panels that can be used for items such as store displays and signage. A pilot is underway in the Netherlands with plans for ten countries on three continents to cater for a similar and patented process.

The vision is for a true circular economy, creating the sort of products that will be used long term and, at the end of their life, be recycled again.

Reuse and recycling of polymer banknotes

Polymer banknote suppliers have claimed that 90% of polymer banknotes are recycled into new products and both CCL Secure and De La Rue offer solutions to support their customers. On the whole, though, the high quality polymer used in banknotes ends up being transformed into lower level recycled products. The volumes are low, making setting up a specialised recycling facility uneconomic. As a result, recyclers mix the waste with other plastics, downgrading their quality.

The good news is that, as with Kusters’ paper board solution, work is being done to create high quality 100% durable polymer solutions that can be reused and, one day, recycled again. For example, acoustic panels and partition screening.

Final word

Royal Dutch Kusters Engineering is clear that for banknote waste to move beyond a linear economy model, solutions are needed that will work in every country and that aren’t complex or expensive for central banks to implement. That requires the industry to focus on the materials in a banknote, for organisations to partner together, and outside of the industry, and for the work being done across the industry to be shared and discussed.