Answering the riddle of climate change is one of humanities greatest challenges. But as with all problem-solving exercises, innovators need to avoid creating new issues in their search for remedies.
The move by certain central banks to continue trialling plastic banknotes is an example of this type of miscalculation. Despite convictions in favour of using the material to print money, plastic is ultimately a poorer choice than the original cotton paper its proponents aim to replace.
In 2016, the Bank of England (BoE) introduced the plastic (polymer) £5 note. The rational was that the longer life span of plastic banknotes would compensate for the higher environmental cost of producing them.
BoE stated that the plastic notes are better because they are more durable, arguing that “a polymer fiver is expected to last two-and-a-half times longer than the old paper £5 note.”
The facts belie this interpretation, with amended calculations showing that plastic notes are worse for the environment than cotton ones.
A closer look at the numbers
In a report by Moneyboat.com, readers can find paper and plastic banknotes compared in terms of their carbon footprint, as well as the average number of times they are used in their respective life spans. The report states that a paper £5 note can be used an average of 180.6 times during its lifetime and has an overall CO2 equivalent footprint (CO2-E) of 1.8 kg. A plastic £5 note can be used an average of 452 times during its lifetime and has an overall CO2-E of 4.97 kg. The figures are derived from BoE’s own data.
The plastic notes have a greater overall carbon footprint, but reportedly last longer and, therefore, are used a greater number of times on average. But with a simple calculation — dividing the CO2-E kg by the number of exchanges in the notes’ lifetimes — the CO2-E kg per exchange can be derived for both types of banknote. They are 0.00997 kg for paper and 0.01090 kg for plastic.
The difference is marginal, but clearly the carbon footprint per exchange is higher for a plastic banknote than for a paper one. This considers the allegedly longer life span, the carbon cost of production, and the environmental impact of disposal at end of life.
The calculation indicates that the main argument for using plastic banknotes is faulty. They are not significantly better, but rather marginally worse for the environment in terms of their carbon footprint.
Additionally, questions still remain over the real lifespan of plastic banknotes. While figures are derived from the assessments of invested industry parties, many plastic banknotes are not surviving for anywhere near the length of time indicated, further wilting the arguments for plastic in the security printing industry.
The above logic misses a salient point, however: plastic is derived from fossil fuels, whereas paper banknotes are derived from renewable cotton. Carbon-dioxide equivalent is only one way to think about the shortcomings of plastic banknotes.
End of life
When it comes to disposal, cotton paper banknotes are granulated and then composted, after which point they are returned to the natural lifecycle of plants by applying the resulting compost to soils. Cotton is, in this sense, a material truly fit for the circular economy.
Plastic notes are also granulated.
But the journey from there onwards is less than circular. The problem with arguments claiming that plastic is recycled lies in the fact that it can only truly be done once, and this is no small task.
Recycling plastics requires mechanical recycling at specialised processing plants, which must be purpose built. The recycling produces plastic pellets that can be used in some cases as a material for plastic products such as garden furniture and building materials. However, the options here are quite limited.
Oddly this is seen by its supporters as a positive result. The environmentally conscious consumer might, however, see new plastic products as a negative outcome for the planet — and as a black mark against the plastic banknotes from which these products are derived.
What then happens at the end of life of these derivative products is non-trivial. The overwhelmingly probable outcome is not further recycling, but landfill, followed possibly by incineration. The plastic recycling process can only achieve one iteration, as such, the single transformation, far from solving the sustainability issue for plastic banknotes, simply pushes it downstream. The cost of final incineration for the atmosphere does not need to be stated, with the emission of CO2 but also very dangerous volatile compounds.
Quality and security issues
Another consideration is that while the plastic substrate itself lasts longer than paper, the ink with which notes are printed often does not. This is a consequence of plastic being less absorbent than cotton paper. Countries with tropical or merely warmer climates can experience problems with banknotes becoming unusable when inks deteriorate or run.
Even in the United Kingdom, BoE had to replace 50 million plastic £5 and £10 banknotes at the start of 2020, having introduced them in 2016 and 2017 respectively. In this case, BoE said damage was mainly caused by “folds, tears, holes, and foil wear.” With shorter-than-expected life spans, plastic banknotes are even more polluting than the above calculations indicated.
This also leads us to the greatest drawback of plastic banknotes overall: their security is not as strong as their highly optimised paper cousins.
Despite what banks have been saying, counterfeiting plastic banknotes is not especially difficult. In Australia, where banknotes have been all-plastic since 1996 — counterfeiting is on the rise. In 2017, there was a significant influx of sophisticated fake $100 banknotes entering circulation around the city of Melbourne.
“A source familiar with the bills said they had the same feel as the [legitimate] polymer notes, and included the clear window with a lyrebird,” according to local media.
As digital technology has become more widely available, the ease with which counterfeiters can replicate national currencies printed on plastic has increased. In Australia, around half of all counterfeit banknotes detected are printed on a similar plastic material to official Reserve Bank of Australia notes.
Security features of plastic banknotes are not better than those on paper ones; it merely took time for criminals to adapt to the medium.
Polymer is and always will remain a form of plastic. It is difficult to recycle, and the results leave a lot to be desired. The banknote industry has every interest in continuing to produce cotton banknotes for ecological reasons, but also for security reasons. As we have seen, plastic has few if any superior properties over paper. And most crucially, the two main arguments for its use in banknote printing — ecology and security — have been emphatically refuted.