The impact of plastic banknotes
Over the years much have been discussed about the impact of plastic on the environment, with striking images and news of it harming animal and human health. In fact, past research revealed that plastic banknotes are distinctively worse for the planet than cotton-based as they have a high carbon footprint and increase permanent waste at the end-of-life cycle. According to statistics, between 1950 and 2015, more than 8.3 billion tonnes of plastic were produced worldwide. Not even 10% of this was recycled.
The negative environmental impact is also exacerbated by the ongoing problem of counterfeiting plastic banknotes, evident in relevant markets and countries. Since their introduction, the number of counterfeit notes on the streets has increased, presenting a major threat not only to the environment but also to our society and economies. But according to ECB, counterfeiting rates of cotton-based euro are now at their lowest level since its introduction, proving the embedded security in the cotton substrate is harder to forge.
Why are cotton banknotes more sustainable?
As a plant, cotton certainly impresses with its sustainable efficiency and negative carbon footprint. All crops produce greenhouse gases during production, including cotton, which emits 1.7 kilograms of carbon dioxide to produce one kilogram of fibre. However, in its leaves and soil, it binds 2.2 kilograms of the greenhouse gas, meaning it removes more CO2 from the atmosphere than it emits. In addition, as cotton fibres are almost pure cellulose, cotton is a very good biodegradable natural fibre.
Enhancing sustainability further, the cotton substrate of the banknotes is derived from cotton combings, a by-product from the textile industry as they do not have the qualitative properties required for textile production. For banknote production, the short fibres are an ideal high-quality raw material.
Although the standard (or “no label”) cotton production requires large amounts of water and fertiliser, there is an increased focus on the use of water and carbon-reducing solutions throughout the value chain, and on certified sources in purchasing. Organisations such as WWF have been working closely with farmers, buyers and government agencies to promote more ecologically and ethically sound cotton and use water more efficiently. Companies have been increasingly reusing water during the production process as well as purifying it to filter out any harmful substances before discharging it.
Ensuring security and durability
While sustainability is an increasingly important element of today’s banknotes, it mustn’t come as a compromise to security and durability. Currently, present innovations and exclusive high-tech processes allow for a hybrid solution, in which minimum quantities of plastic are used to raise the durability of cotton-based banknotes to a level comparable to a 100% polymer substrate.
An ultra-thin film of polymer protects a cotton core where all the important and sophisticated security features and machine-readable elements are embedded, including watermarks, threads, foils, see-through windows, or optically variable stripes. During the sheet formation process, all these security features can be inseparably bonded to the banknote paper, providing maximum protection against counterfeiting. When it comes to polymer banknotes, security elements are either printed or applied using processes and machines similar to those in the mass market, therefore, consequently making the notes easier for counterfeiters to appropriate. On the other hand, cotton-based notes have their security features fully embedded in the substrate, applied or printed. This provides confidence in the authenticity and stability of cash as a public good.
As cash continues to be an essential part of people’s freedom of choice of their means of payment, banknotes must first and foremost offer confidence in their security to minimise fraudulent activities. There are, however, growing pressures across all industries and supply chains to prioritise sustainability too, with banknote creation and disposal being no different. Today’s advanced processes and technology help achieve the optimum balance between durability, security and sustainability. They guarantee banknote longevity and the highest levels of security - all while helping the environment and reducing unnecessary plastic waste. That way people can continue to enjoy physical money, knowing that by making cash payments, they don’t contribute to the climate crisis.
New research has revealed that, of the average number of banknotes required by an individual adult each year, new £10 notes release 8.77kg of CO2 compared to their cotton-paper predecessors’ 2.92kg - exactly three times as much.
For £5 notes, that’s 4.97kg for polymer against 1.8kg for paper, or 2.76 times as much - just in the manufacturing of the required number of notes.
The research, that combines data from the Bank of England’s own reports with information on cash manufacture and usage, from sources such as the British Retail Consortium, to give a more realistic comparison.
The plastic notes were initially introduced in 2016, on the basis of their ability to include greater security features, being more resistant to dirt and having a longer life.
This extended lifespan was cited as the main reason for the new notes having a lower environmental impact. However, the bank’s data is based on what it calls functional units - the circulation of 1,000 banknotes over 10 years - rather than the number actually used by an individual, their manufacture and the number of exchanges they go through.
When it comes to disposal at the end of their lives, paper notes are returned to the Bank of England, where they are granulated and composted in a process similar to that used for food waste. Meanwhile, polymer notes are granulated, melted and mechanically recycled into other objects.
The greenhouse gas production of each method for both the paper and plastic £5 notes is essentially the same. The slightly larger and thicker £10 notes, though, mean that the polymer versions create slightly more CO2 in their end-of-life process than their paper counterparts.
Not every alternative method of payment avoids the problem, either. The increasingly popular Apple Pay, for example, comes with the considerable environmental cost of manufacturing an iPhone, which will typically only be kept for two years.
According to Apple’s own reports, a 64GB iPhone XS represents lifetime emissions of 70kg of CO2, with 53.9kg coming from the unit’s production. Almost eight times more than polymer £10 notes - the next most damaging option.
The most environmentally-friendly payment method is a bank card, despite being made from PVC. Over its three-year life, a standard card represents just 20.8g of CO2 production. Even when the technology for wireless payments is added, it increases to just 40g of CO2 - a fraction of that from banknotes.
(Source: Moneyboat)
According to reports, the ‘ridiculous’ bill the UK is to pay out in order to exit the UK, otherwise known as the Brexit bill, stands at around £44 billion. That’s a lot of money, and a lot of cash, but how much cash to be exact?
Finance Monthly has worked out approximately, based on the average size of a £50 bank note, the largest readily available note in the UK, how much space £44 billion in cash takes up? We don’t really have a photo of £44 billion in cash, so we’ll have to try and compare it to something just as big. Is it the size of a football field? The size of the Louvre? The size of the moon?
Well, a classic £50 measures at 156mm x 85mm x 0.113mm and weighs about 1.1g. That’s 1,498.38 mm3 per note. There are 20 million £50s in £1 billion. 20 million £50 notes take up 29,967,600,000 mm3, therefore 29.9676 m3. The Brexit cash is 44 times that figure. This brings us to 1,318.5744 m3, which rounded up is 1,318.6 m3.
Focusing on London, the capital of British finance, Big Ben is officially marked at around 4,650 m3 for its interior. Therefore realistically, the Brexit bill cash could fill up the inside of Big Ben just over a quarter of the way up! At this point it would likely also fill the floor in the House of Commons.
It’s a stack load of cash to hand over, 10 double decker buses’ worth in fact, in terms of volume that is, not value. A London Routemaster double decker bus is worth around £349,500, so 10 of those is £3,495,000 and well, Brexit is going to cost us a little more than that.
Of course, this is all speculation, and even the figure of £44 billion is an unconfirmed unofficial number. None the less, the prospect of paying the European Union such an amount means that as Brexit has all in all been a sizeable decision from the British public, there will be a sizeable price to pay.
In light of new figures recently released by the British retail consortium which reveal that the popularity of contactless has soared ahead of cash, Ross Macmillan, head of research and intelligence at allpay Limited (the UK’s leading payment specialist) argues that cash is far from dead – especially when it comes to bill payments, which contactless can’t accommodate.
Ross told Finance Monthly: “With experts predicting the end of cash for the last five decades, it’s no surprise that with the increasing use of mobile payments and digital wallets, they’re at it again.
“However, for all the talk about cryptocurrencies and virtual accounts – the value of banknotes in circulation in the UK has actually increased threefold over the past 20 years, according to the Bank of England. As at end of July 2015, the total value of Bank of England notes in circulation stood at £62.6 billion. And with more than 18 billion cash payments made in 2014, according to Payments UK, which accounted for 48% of all payments made in the UK, you could argue cash is alive and far from dead.
“Consider some of the major household bills like rent, council tax, water, TV Licence, gas and electricity. Every year hundreds of millions of payments for household bills are made with coins or paper providing flexibility and convenience for the likes of the rurally isolated, unemployed, un/under-banked, digitally excluded, elderly or vulnerable. If they were unable to use cash, they’d incur arrears on their bills and fall into debt. In fact, according to industry data, in some of these sectors between 10% and 39% of payments are still made in cash and cheque. In energy and housing for example, there has been an increase in volume, albeit small, between 2014 and 15.”
