By Clemens Berger, Chairman of the Board of Managing Directors at Louisenthal, a Giesecke+Devrient company
For years, the sustainability debate around banknotes has largely been framed as a choice between paper and polymer. While that comparison has value, it captures only one part of a much broader environmental picture.
Central banks are responsible for banknotes that must remain secure and durable in circulation while also meeting ever tougher environmental goals. To fully assess which substrate performs best, however, they need to look beyond the material label and assess the full lifecycle of the note. That means asking where the raw material came from, how much energy was required to produce it, how long the note remains fit for use and what happens when it leaves circulation.
Terms such as renewable or recyclable only carry weight when evidence supports them at each stage. A full lifecycle test provides that evidence, moving the discussion beyond manufacture to include sourcing, performance and end-of-life value.
How to measure sustainability across the banknote lifecycle
Product carbon footprint is a useful starting point. It captures greenhouse gas emissions across a product’s life, but the figure must be set against the banknote’s expected lifespan. A low production footprint offers limited value if the note needs frequent replacement.
Biobased carbon content adds another layer by showing how much carbon in the substrate comes from renewable biological sources rather than fossil feedstock. Together, the two measures give a clearer view of the material and its environmental cost over time.
Neither figure can be used in isolation, however. Banknotes must withstand daily handling and support quick, reliable authentication. A longer life reduces replacement volumes, while strong security protects public confidence.
Fibre-based substrates combine these requirements with a relatively clear material origin. Banknote paper commonly uses cotton comber noils, the short fibres removed during yarn production. This gives an existing textile by-product a valuable use without creating a separate raw material stream.
Traceability is the next step. Data released alongside Textile Exchange’s 2025 Materials Market Report showed that, among 423 participating brands, the share of raw materials certified under sustainability programmes rose from 58% in 2023 to 67% in 2024. Although the figures relate to the wider textile sector rather than banknotes, they reflect a relevant procurement principle: claims about cotton are more credible when its origin and movement through the supply chain can be verified.
Issuers still need to test what each certification standard covers and how suppliers process the material. Even so, fibre-based substrates make renewable-content claims easier to verify and explain because the renewable material is physically present and traceable through the supply chain. That clarity creates a useful benchmark for assessing renewable claims made about polymer banknotes.
Why renewable polymer claims need closer scrutiny
Biobased feedstocks can reduce fossil resource use in parts of polymer production, but they do not prove that the finished banknote is sustainable.
To judge that claim, issuers need to know how much renewable material is attributed to the final substrate and how the feedstock becomes polypropylene. They also need to account for the finished note itself, which remains plastic and includes inks, opacifiers and security features that can complicate recycling.
This gap between technical recyclability and routine recycling is important. In August 2025, the Associated Press, citing OECD data, reported that only about 6% of plastic is recycled globally. The cost and complexity of separating different polymers remain major barriers.
The figure covers the wider plastics market rather than banknotes alone, and capacity varies by country. It still shows why a broad claim of recyclability needs evidence from real operating conditions. A material can be recyclable in theory without being processed reliably at commercial scale.
Central banks therefore need to establish whether local facilities can handle the complete note and whether there is a market for the recovered output. Transport also belongs in the calculation. Long journeys to specialist plants add cost and emissions, weakening the environmental case.
Renewable feedstock may improve one part of a polymer note’s profile while leaving these end-of-life barriers unresolved. A credible claim must cover the finished banknote and the route available once it leaves circulation.
Designing banknotes for a practical second life
End-of-life planning should begin before a new banknote enters circulation. When a note becomes unfit, the issuer should already know how it will be processed and what the recovered material can become.
Fibre-based notes have an advantage here because they can connect with established paper recycling systems in many markets. Recovered fibres can be directed into packaging, moulded products or other paper-based applications, giving central banks a practical route for keeping the material in use. Louisenthal’s work on banknote repurposing reflects this approach by matching recovered fibres with suitable local applications.
Banknotes need more preparation than ordinary paper because they are designed to resist moisture and wear. Their security features can also make conventional pulping harder, which is where dedicated recovery technology helps.
The Banknote Fiber Extractor uses a dry mechanical process to separate unfit notes into individual fibres without water or chemical treatment. The recovered material can then enter paper recycling streams or support other products.
Trials have used banknote fibres in packaging paper and moulded applications. The aim need not be to turn every old note into a new one. The priority is to retain the material’s value through a useful second life.
Existing infrastructure strengthens the case. Paper mills operate in many markets and recovered fibre already has recognised commercial uses. This gives issuers more scope to identify suitable partners and practical applications within or close to the issuing market.
Polymer banknotes can also be recycled where suitable facilities exist. In practice, the process often depends on more specialised infrastructure, while the mix of materials within the note can limit the value of the recovered output.
The difference is practical. Fibre-based notes can draw on established recovery systems and give issuers a clearer view of where the material will go next. That evidence can then feed directly into procurement.
Turning lifecycle evidence into procurement decisions
Central banks can put this thinking into practice by asking suppliers to support each sustainability claim with comparable lifecycle evidence.
Suppliers should disclose the product carbon footprint in relation to the note’s expected life and provide verified biobased carbon content. They should also explain the origin of the feedstock. The end-of-life plan should show how unfit notes can be processed in the issuing market and what will happen to the recovered material.
This gives issuers a firmer basis for comparison and stops terms such as renewable or circular from serving as proof on their own.
Because circulation patterns and recovery infrastructure differ, no single answer will fit every market or denomination. Each central bank needs an assessment built around its own cash cycle.
That local context matters, but it does not change the test. Sustainability depends not on the material label but on how the banknote is sourced, made, used and recovered.
Measured in that way, fibre-based banknotes offer a transparent and practical route to circularity. Their biobased content is present in the substrate itself, and their recovered fibres can move into established recycling streams and serve a useful second life.
Banknote sustainability should therefore be judged with the same rigour as banknote security. A full lifecycle test gives central banks the evidence to choose responsibly and to show the public that environmental claims about cash are backed by practical action.
Author Bio:
Clemens Berger is Chairman of the Board of Managing Directors at Louisenthal, a wholly owned subsidiary of G+D Currency Technology. He has extensive experience in banknote, paper and printing technologies.
