Latest Articles Most Popular Articles
Three ponds arranged as arrows, amidst green trees, form the recycling symbol
#Banknote Solutions

A greener banknote life cycle

Technical Innovation
7 Mins.

Initiatives like the Green Banknote Initiative are helping make cash more sustainable. But true progress requires more than just greener materials – it means rethinking every stage of the cash life cycle.

Table of contents

Have you ever considered the journey a banknote takes – from the cotton fields where its raw materials are sourced to the stage it is withdrawn from the cash cycle and destroyed? Along that journey, it passes through countless pockets, cash registers, and banks, sometimes crossing borders and continents. Every stage of its life cycle – sourcing, production, distribution, usage, and disposal – contributes to global emissions. With global demand for cash rising, cash cycle players need to re-evaluate every step of the cash life cycle to make cash as sustainable as possible. 

Recognizing the role it could play in supporting sustainability efforts, G+D committed to reducing its net emissions to zero by 2040 – both in its operations and in its solutions. An example of this pledge in action is the Green Banknote Initiative, which G+D launched in 2022 with its subsidiary, Papierfabrik Louisenthal.

The initiative aims to rethink the sustainability of banknotes across the cash cycle. “The goal is to bring people together, to make not just the banknote more sustainable, but its entire life cycle,” says Alexandra Peppmeier, Senior Sustainability Engineer, G+D Currency Technology (Banknote Solutions). “By encouraging collaboration across central banks, and the private sector, we can take a more holistic and scalable approach to reducing the environmental footprint of banknotes.”

In the three years since its launch, the initiative has seen successful implementations in countries like Eswatini, Lesotho, Suriname and the Bahamas and introduced two new banknote substrates to the market – the Hybrid Green Banknote and Green LongLife™ banknote – that set new benchmarks for banknote sustainability.

Stack of artistic 50 value notes with floral themes

We define banknote sustainability with two main aspects. The first is carbon footprint, which we naturally want to keep as low as possible. The other aspect is a high-bio-based carbon content, which means maximizing renewable materials and reducing plastics or any fossil materials.

Alexandra Peppmeier
Senior Sustainability Engineer, G+D Currency Technology (Banknote Solutions)
Blue and green 100 value note with dandelion
Artistic 100 currency note with floral design

Since launching, the Green Banknote Initiative has also contributed to an industry-wide shift in how sustainability is viewed throughout the cash industry. “We define banknote sustainability with two main aspects,” says Peppmeier. “The first is carbon footprint, which we naturally want to keep as low as possible. The other aspect is a high-bio-based carbon content, which means maximizing renewable materials and reducing plastics or any fossil materials. We are starting to see this standard be adopted by our customers and competitors.”

The two new substrates introduced though the initiative demonstrate the twofold definition in action. The Hybrid Green Banknote substrate reduces the carbon footprint by 29% and the use of plastic by 86% compared with polymer banknotes, while maintaining the same lifespan. Longevity is one of the main reasons polymer banknotes are often considered the greener alternative. However, Louisenthal’s Hybrid substrate offers the same durability while reducing the amount of fossil raw materials. Additionally, most polymer banknotes are currently not recycled at the end of life and have a higher plastic content than any fiber-based banknote, presenting additional environmental challenges during disposal.

Hand holding a ripe, white cotton boll in a field – a natural fiber source for banknotes

Ensuring sustainability across the banknote life cycle

While this industry shift is a positive signal, there is no room for complacency. Greener substrates alone are not enough to make cash truly sustainable. Achieving lasting impact requires re-evaluating every stage of the cash life cycle.

  1. Raw material sourcing

    Banknote sustainability starts with the sourcing of one of its raw materials: cotton. Cotton-based coated hybrid banknotes have the lowest CO2 footprint of all available banknotes, generating up to 13% less CO2 during their lifetime and up to 29% less during production compared with polymer alternatives.

    However, unlike textiles, which use virgin cotton, banknote producers make use of cotton combers – short fibers removed during the textile combing process. These fibers are especially suitable for banknotes and make use of a by-product. Of the 24 million tonnes of cotton harvested globally each year, around 20% to 30% ends up as combing waste. For the banknote industry, making use of this by-product to increase the bio-based content of banknotes is both practical and environmentally responsible. 

    At the same time, sustainability isn’t just about the physical properties of the product. It also considers the social and environmental standards of how the raw materials are sourced – especially in an industry where exploitative labor practices still persist.1 Supporting initiatives like Cotton made in Africa (CmiA) can help promote ethical farming and improve traceability across the supply chain.2 The European Central Bank, for example, is already exploring the use of 100% organic cotton in all euro banknotes by 2027.3

  2. Banknote production

    Once the raw materials have been sourced, the next stage is production. This accounts for around 13% of the banknote’s total carbon footprint, caused by processes such as energy consumption and the use of materials and chemicals required for the production, printing, finishing, and securing of substrates. Although some environmental impact is unavoidable, measures such as switching to green energy sources, optimizing equipment for efficiency, and phasing out fossil-based components, virgin materials, and hazardous chemicals are examples of how banknote suppliers can minimize emissions and their environmental impact.

    A less obvious, but not to be neglected, benefit comes from increasing the durability of the banknote itself. Switching to substrates that last two to three times longer than traditional cotton-based banknotes reduces the need to print and distribute replacements as often, thus reducing emissions in raw materials, manufacturing, and destruction further downstream. Substrates like Hybrid ADDvance® and LongLife™ are designed with this kind of extended durability in mind.

  3. Circulation and use

    Keeping banknotes in circulation for longer also reduces distribution-related carbon emissions. Circulating and handling processes are by far the largest contributors to a banknote’s carbon footprint. According to the ECB’s Product Environmental Footprint (PEF) study, circulation accounts for 72% of a banknote’s environmental footprint, with the majority coming from transportation (35%) and energy consumption by ATMs (37%).4

    While switching to green energy sources and adopting e-mobility for cash transportation can help lower these emissions, central banks have limited direct control over such factors – yet another reason to double down on more durable banknotes that increase longevity. 

    In terms of cash usage, the overall environmental impact of using cash remains relatively low – annual cash payments across the EU are estimated to have a carbon footprint equivalent to an 8-kilometer car journey – there is still room for improvement. The ECB, for example, is actively researching ways to reduce these impacts as part of the development of the next euro series.

  4. End-of-life

    The final stage in the life cycle concerns what happens to banknotes when they are no longer fit for use. Unfit notes are destroyed and often sent to landfills or incinerators, contributing to general waste and emissions. At the same time, repurposing or recycling these materials is a challenge due to their high wet-strength and fiber degradation during destruction. Banknotes must be shredded finely for security reasons, which shortens the underlying cotton fibers and limits the possibilities of being easily and economically repurposed.

    One promising solution to that problem is the banknote fiber extraction technology, which uses a high-tech turbo mill to create air turbulences and vortexes that tear banknotes into tiny particles while maintaining the integrity of underlying cotton and cellulose fibers. Rather than going to landfills, the extracted material can be reused for recycled paper products such as packaging or molded goods and many other applications, promoting a more circular life cycle and reducing the dependency on virgin raw materials for the recipient industries. 

50 value note with pink lotus and hand
50 value note depicting people on a boat among lotuses

Improving each stage of the banknote life cycle can significantly reduce the direct and indirect emissions in the responsibility area of an organization itself (Scope 1 and 2). However, even the most sustainable substrates and innovations can only achieve so much. To achieve broader impact, the indirect emissions embedded throughout the wider supply chain (Scope 3) must be addressed. However, there is no one-size-fits-all solution to this challenge.

A collaborative approach to banknote sustainability

“It’s not enough to just optimize your own processes,” says Peppmeier. “To make the banknote life cycle truly sustainable, you need all stakeholders – central banks, suppliers, regulators – to be aligned with sustainability goals and to commonly make the whole life cycle of a banknote more sustainable.”

Central banks can lead the conversation around sustainability in the industry. As custodians of public currency, they are well positioned to set expectations, influence supplier practices, and support the level of collaboration needed to drive meaningful impact. In doing so, central banks strengthen their public image as forward-looking institutions committed to environmental responsibility, while increasing international recognition and providing resilience in the face of shifting ESG expectations. They also support the continued relevance of cash in an increasingly digital payments landscape.

At the same time, expectations must be balanced. Central banks operate under diverse local conditions, and the feasibility of implementing sustainability measures varies widely by region. While a circular banknote life cycle is the aspiration, some circumstances may be counterproductive. For example, in countries where infrastructure is limited, transporting banknotes thousands of kilometers for repurposing could generate more emissions than local disposal. Such scenarios must be handled on a case-by-case basis. 

Technology partners like G+D can also play a supporting role. In addition to providing central banks with new substrates and banknote fiber extraction technology to support recycling, G+D works with suppliers to jointly help reduce emissions across the value chain.

Such collaborative efforts will be of increasing importance as the urgency of the sustainability agenda grows in the years ahead. Achieving a green cash cycle is not a one-off project, but rather an ongoing commitment. Programs like the Green Banknote Initiative will continue to drive innovation, researching more durable and more environmentally friendly substrates. Yet the full potential of these innovations can only be realized if central banks and stakeholders throughout the cash ecosystem work together to enable effective implementation and lasting impact.

Key takeaways

  • Cotton-based, sustainable substrates like Hybrid Green Banknote and Green LongLife™ offer a greener alternative to polymer, with lower carbon footprints, less plastic content, and greater potential for repurposing.
  • However, greener materials alone aren’t enough – achieving true sustainability requires rethinking the entire cash life cycle, from sourcing and production to end-of-life.
  • Collaboration is essential – central banks are uniquely positioned to drive industry-wide change by setting expectations and supporting implementation.

  1. The Casualties of Cotton, Environmental Justice Foundation 

  2. Cotton made in Africa

  3. Climate and nature plan: 2024–2025, ECB, 2024

  4. Product Environmental Footprint study of euro banknotes as a payment instrument, European Central Bank, 2023

Published: 03/07/2025

Explore our products & solutions

Explore similar topics

#Central Banks

Share this article

Read similar articles
Subscribe to our newsletter

Don’t miss out on the latest articles in G+D SPOTLIGHT: by subscribing to our newsletter, you’ll be kept up to date on latest trends, ideas, and technical innovations – straight to your inbox every month.

Please supply your details: