Giesecke+Devrient Q&A: Banknote Sustainability

Despite the emergence of digital payments, cash is and will remain an integral form of payment long into the future. 

It’s universal, inclusive and an essential part of everyday transactions. 

However, when banknotes reach the end of their lifecycle, they are often incinerated, sent to landfills or used in terminal energy production – practices that contribute to environmental degradation. 

With 25% of the billions of banknotes in circulation having to be replaced every year, it is crucial to find more sustainable methods for disposing of or repurposing these notes.

Clemens Berger, Chairman of the Board of Managing Directors at Louisenthal, a subsidiary of Giesecke+Devrient, discusses strategies for repurposing banknotes so that when they reach their end of life, they are not disposed of unsustainably.

What are the sustainability challenges when banknotes reach end of life today? 

Billions of banknotes are in circulation today, mainly made up of cotton fibres in their core but also other types of materials, some of which are not from renewable sources. Every year, countless banknotes reach the end of their useful lives.

Central banks as issuers of currencies are facing challenges in taking unfit notes out of the cash cycle effectively, securely and sustainably, when they are damaged, being phased out or upgraded to be more counterfeit-resistant. Currently, systems are limited in their ability to repurpose banknotes, and the industry must find solutions for handling them once they are no longer fit for circulation.

How do current currency systems need to evolve to address sustainability challenges at the end of a banknote's life?

The common disposing process of banknotes needs evolution and improvement. Currently, unfit notes are usually ultra-fine shredded, followed by compression of the material into briquettes, bags or containers. Conventional systems, however, such as banknote destruction solutions, do cut banknotes into very small shreds for security purposes, which shortens the underlying cotton fibres and restricts how the material can be reused as it loses its high stability properties through the cutting. 

Therefore, a big focus in the industry has been searching for alternative methods to ensure banknotes can be repurposed sustainably. While still not mandatory, sustainability standards, such as the Environmental Management System in the EU, provide valuable certifications that help ensure euro banknotes are produced as sustainably as possible, including their raw materials. Durability, and therefore longevity, is also essential to helping the carbon footprint of a banknote. 

What processes or techniques can make the lifecycle of a banknote more sustainable? 

We have seen the emergence of a new technology, which facilitates the destruction of unfit, fibre-based banknotes while at the same time enabling a new raw material to be generated from the process. Banknote fibre extraction is proving to be a true sustainability game-changer in the industry. This process involves banknote decomposition that maintains the integrity of underlying cotton and cellulose fibres. The recovered material can then be used in everyday products, including paper items, packaging solutions and fibre-injection moulding. 

This is an ideal solution for central banks that are looking for holistic solutions to achieve their stringent sustainability targets. Banknote fibre extraction can also be seamlessly integrated into existing recycling processes. These banknotes require lower maintenance as no knives are needed to destroy them, with high air pressure alone being sufficient. The extracted fibre material can subsequently be compressed into briquettes, completely removing the need for plastic wrapping for storage purposes. 

What materials could be adopted to improve the sustainability credentials of banknotes? 

In order to make existing banknotes even more sustainable, we are seeing growing use of organic cotton and alternative materials such as certified wood pulp from responsible forestry techniques. One innovative solution is the use of a hybrid substrate, where the core of the banknote paper is comprised of a combination of certified organic cotton and European-grown fibres. This paper core is protected by a thin lamination film to ensure that its lifespan remains the same as a banknote made of polymer, and it can even last 2.5 to 3 times longer than a standard cotton banknote. Mineral-oil-free printing inks are also being adopted in banknote production, which uses less fossil raw material than conventional inks.

Are there particular regions that are leading the charge for a global shift in sustainable banknote adoption? 

Globally, we can increasingly see that environmental aspects are being taken into consideration, with a shift towards sustainable banknotes. If we look at the Eurozone, we are seeing Euro banknotes being produced entirely from sustainable cotton, while €5, €10 and €20 banknotes have been varnished additionally to extend their life before they need to be disposed of.

In another example of sustainability leadership, the Central Bank of Lesotho has adopted G+D’s Green Banknote substrate for its 200 maloti banknote, noting its sustainable and durable benefits. The country’s government has a key focus on implementing strategies that benefit the environment, with the Green Banknote meeting this requirement. Other developing countries are also adopting this solution to help meet sustainability targets and minimise carbon footprints, such as South American country Suriname.  

What design features do banknotes need to incorporate, and how does this impact sustainability? 

Security is always the priority in banknote production to ensure authenticity against counterfeiting, with the latest innovations allowing for security threats to be embedded in the banknote substrate. But they need to be implemented in a sustainable way.  

The carrier foil for the security thread and security patch of state-of-the-art banknotes is made of 70% recycled polyester from post-consumer recycled materials such as PET bottles. The foil used in the green hybrid substrate which helps increase the lifespan of the banknotes has also been reduced in size to one-tenth the diameter of a human hair, meaning that these banknotes use 86% less plastic compared to polymer versions. While this production can be complex, the result is a 29% reduction in CO2 emissions, with fewer steps in the production process than with a polymer note. 

In summary, the currency industry must embrace sustainable practices by repurposing banknotes at the end of their lifecycle. By transforming unfit notes into valuable raw materials for new products, we can significantly reduce environmental impact, conserve resources, and help to ensure a more sustainable future not only for our currency systems but also for the wider

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