Recently the Bank of England announced that they will not bring about a change to the composition of polymer banknotes. The new polymer £20 note and future print runs of £5 and £10 notes will continue to be made from polymer manufactured using trace amounts of chemicals, typically less than 0.05%, ultimately derived from animal products.
There are many factors that come into play as the decision reflects multiple consideration, including concerns raised by the public, the availability of environmentally sustainable alternatives, positions of our Central Bank peers, value for money, as well as the widespread use of animal-derived additives in everyday products, including alternative payment methods. The Bank has also taken account of its obligations under the Equality Act 2010.
The only solution for polymer banknotes is to use chemicals ultimately derived from palm oil. The bank also wanted public’s view, hence the bank ran a full public consultation, which set out a range of relevant information.
Many people responded to the consultation and 88 percent were against the use of animal derived additives and 48 percent were against the use of palm oil derived additives. The Bank has had to balance these responses against its other public duties and priorities as well as the other evidence gathered over the past months. The use of palm oil raises many eyebrows about environmental sustainability and the bank’s suppliers have been unable to commit to source the highest level of sustainable palm oil at this time. The bank took the decision as value for money was also a consideration. The estimated cost of switching has increased since the consultation and is now estimated to be around £16.5 million. The Bank has consulted with HM Treasury, as the ultimate bearer of this additional cost is the taxpayer.
HM Treasury advised the Bank that it does not believe in switching to palm oil derivatives.
The manufacture of Bank of England polymer notes using trace amount of animal-derived additives is in line with other polymer issuers. The Bank of England has conducted an investigation and looked for alternatives and considered these in the context of the manufacture and use of plastics in other everyday household products.
Moving to polymer banknotes remains compelling. There are many benefits of using polymer bank notes, one of them is that they are hard to counterfeit. Also, polymer unlike cotton paper lasts long and also delivers environmental benefits. The Carbon Trust has certified that over their full life cycle, the carbon footprint of polymer £5 and £10 notes is lower than paper notes.
The bank totally understands the concerns raised by the members of the public, both prior to and during the consultation, and has not taken this decision lightly. The Bank is fully aware that the decision it has reached may not address the concerns of all parties. The Bank has considered very carefully the relevant factors and taken into consideration all of its objectives, including its responsibility to maintain confidence in the currency through the issuance of high-quality, secure bank notes and achieve value for money for taxpayers.