Beyond Durability: Polymer Banknote Adoption Remains Regional Amidst Global Plastic Reduction Efforts

Although paper continues to be the preferred material for banknotes, polymer cash occasionally makes headlines. Yet, those who opt for the new material don’t seem to mind the negative environmental consequences associated with plastic polymers—consequences that have been proven to be greater than the touted advantages.  

The composition of banknotes worldwide is evolving, with polymer banknotes taking the headlines. In the UK, the introduction of the polymer pound sterling was widely reported, followed by a quieter shift to plastic cash recently occurring in the Persian Gulf, like the United Arab Emirates completing the full transition to polymer banknotes for all denominations in recent years or Kuwait introducing its first polymer banknote in 2020.  

This enthusiasm, however, is not mirrored worldwide as most of the world’s countries still prefer to print their cash on paper, rather than on plastic. Those who opt for polymers may have their own considerations, first and foremost the (false) feeling of stepping into a more modern era. Nonetheless, this choice occurs against the backdrop of a growing international push for decreased plastic consumption and a greater emphasis on environmental sustainability.  

The dangers of plastic production  

In reality, polymer banknotes aren’t as eco-friendly as often portrayed. While proponents emphasize their supposedly extended lifespan which would reduce the need for frequent replacements, a closer examination of their production and disposal reveals a less sustainable reality. The facts have shown that the lifespan of polymer banknotes, notably in the United Kingdom, is not longer, but even shorter than that of cotton-paper notes. The very foundation of polymer banknotes lies in polypropylene, a petroleum-based plastic. Its manufacturing process involves melting plastic pellets, stretching them into thin films, and then printing and coating them with various security features and inks.  

This process inherently relies on fossil fuels, a finite resource, and contributes to greenhouse gas (GHG) emissions associated with plastic production: “Under a conservative growth scenario (2.5%/year), GHG emissions from primary plastic production would more than double to 4.75 gigatons of CO2 equivalent by 2050, accounting for 21-26% of the remaining global carbon budget to keep average temperature increases below 1.5°C,” writes U.S. Lawrence Berkeley National Laboratory.  

Essentially, any plastic, including polymer banknotes, contributes to greenhouse gas emissions that trap heat, raising global temperatures and altering weather patterns, leading to more frequent and intense heat waves. Moreover, the harm of polymer banknotes doesn’t end once they are issued, since the end-of-life management of plastic cash presents significant challenges.  

Problems with end-of-life banknote management  

While polymer banknotes can be recycled, the process often involves shredding, melting, and mixing them with other plastics to create lower-grade plastic products like compost bins or park benches. This down-cycling means the high-quality polymer used in banknotes is rarely turned back into a product of equal value, and it doesn’t eliminate the eventual issue of plastic waste accumulation. Even worse, once recycled plastic pellets are handed over to manufacturers, this material enters a gray area of environmental regulation.  

To date, there is no international legally binding agreement on plastic pollution, nor a comprehensive approach to managing the problem. This is why we will never know the exact destiny of a large portion of waste polymers derived from polymer banknotes. This uncertainty creates all kinds of issues. According to a 2024 international study: “For every plastic polymer, there is evidence of environmental leakage, human exposure, and human health impacts at every stage of the life cycle, and each aspect of plastic – the polymer itself, the chemicals therein, and the product/application – is associated with unique impacts.”  

This problem poses as a particularly acute if we take a look at the amount of plastic waste humans produce every year. Around 275 million tons of plastic waste is generated annually around the world, which not only poisons people, but can have a devastating effect on the environment. Marine animals including fish, dolphins, seals and turtles are particularly at risk as they can ingest plastics floating in the water. So far, plastic has been found to be blocking the digestive tracts of at least 267 different marine species, with almost all of instances discovered only after the animal’s death—which further raises the question of whether we really want to increase the amount of waste we and other species can no longer handle.  

Is paper really a better choice?  

Made of sustainable cotton paper, traditional banknotes offer a compellingly different narrative when compared to their polymer’s counterparts. Banknote paper production draws from the same source as textile manufacturers, with the only difference being that the cash paper comes not from pure cotton but from textile industry offcuts, such as linters and comber noils—byproducts of the normal cotton fibre production process. This approach transforms what would otherwise be waste into a valuable resource and aligns with the growing global emphasis on circular economy principles, minimizing waste and maximizing resource utilization. While some countries might not be primary cotton producers, the global textile industry generates substantial waste that could potentially be sourced for this purpose.  

Furthermore, compared to the energy-intensive processes of virgin plastic production, the manufacturing of cotton paper from recycled materials generally boasts a lower carbon footprint. This particularly important for regions facing increasing pressures from climate change: for instance, rising temperatures and water scarcity in the Gulf hint at the necessity of a more ecologically sound long-term strategy, including opting for a banknote material with a potentially @lighter environmental impact. In this case, sustainable alternatives like cotton paper, especially when sourced responsibly, might offer a tangible pathway to reconcile modernity with environmental stewardship, a crucial consideration for the future of the Middle East and other regions of the planet. Paper notes can also be made from a mix of cotton and local materials such as abaca, linen, salago, etc. This offers a wide range of more eco-friendly and locally sourced solutions.  

Global experience 

In addition to broad considerations, real-life examples also demonstrate how paper banknotes can be produced using sustainable strategies while retaining all essential features. The European Union and the United States, for example, are not planning on switching to plastic in the foreseeable future. Moreover, some countries have considered using polymer banknotes but have abandoned them in favour of more environmentally friendly paper.  

One of these countries is Sweden. Cashless payments are prevalent there, but it still retains its cash, proving that modernity comes not with fancy materials but with sustainable choices combined with the digital technologies. While the country explored polymer for certain denominations, their historical and ongoing use of paper-based banknotes incorporates high-security features and a focus on responsible sourcing of raw materials. The Swedish central bank, Riksbank, aims to combine environmentally sound practices with positive user experience and security, and this endeavour has already been realized in their renewed banknotes printed on cotton paper substrate: “The composition of the banknotes is consistent and confident… The overall impression is of a beautiful and user-friendly banknote series based on a fine balance of innovation and Swedish tradition,” the Riksbank states in their official release.  

It’s important to acknowledge at this point that the resource endowments and access to technologies of Sweden and other countries may differ. However, in today’s globalized world, both regions are able to use a wide range of imported resources and technological advancements offered by specialized banknote printing companies from around the world. These companies are increasingly developing sustainable solutions, including cotton paper derived from recycled textile waste and innovative hybrid substrates.  

Gulf countries and others could draw upon Sweden’s example, leveraging these global advancements to implement more sustainable banknote practices. Although public discussions about the environmental impact of banknote materials have been limited, awareness of environmental issues is growing, driving many countries toward diversification and sustainable development. Exploring and potentially adopting more environmentally conscious banknote materials could align our financial infrastructure with broader sustainability efforts and position those who use paper cash as thoughtful participants in a resource-conscious future.