As announced on 15 February 2017, the Bank of England is undertaking a consultation to seek the views of the public on options for the future composition of polymer notes, namely the next £20 note and future reprints of the £5 and £10. This will allow the Bank to understand better the range of public opinion. The Bank recognises the concerns raised about the discovery that traces of animal-derived additives were used in the production of its £5 polymer notes. It respects those concerns and is treating them with the utmost seriousness.
As set out in the statement of 15 February, the Bank concluded that it would be appropriate to keep the £5 polymer note in circulation and to launch the £10 polymer note as planned, in September 2017. In reaching its decision, the Bank considered the public impact on immediate note supply, the set-back in counterfeit resilience of withdrawing polymer notes and the costs involved in destroying and reprinting polymer £5 and £10 notes already printed and its obligations under the Equality Act 2010.
- provides information on the Bank’s role and objectives in note issuance, the rationale for the adoption of polymer notes and the production process for notes;
- describes the role of animal-derived additives in the production of polymer notes and sets out alternative options;
- highlights the potential environmental and social impacts associated with the use of additives sourced from tallow, coconut oil and palm oil; and
- describes the Bank’s responsibilities under the Equality Act 2010 and identifies those groups which the Bank understands may potentially be affected and in what way.
The Bank has spoken to a number of interested parties, namely potentially affected religious groups; groups representing vegans and vegetarians; and environmental organisations. These meetings have helped to inform the Bank’s thinking as well as the contents of this consultation document. The Bank also commissioned an independent report on the environmental impact of a range of additives from a consultancy firm, Efeca. The Efeca Report is published alongside this consultation.
The animal-derived additives are chemicals used in trace amounts by global manufacturers of polymer that are used for a wide variety of everyday products. Ultimately the chemical additives used in the initial manufacturing of this polymer are derived from tallow, a by-product, mainly from livestock farming. For notes, the polymer is then coated with white inks (‘opacified’) to make the polymer ‘substrate’, on which the note design is printed. The amount of polymer used for notes represents a tiny fraction of global annual production.
The production of secure notes is complex. The development and launch of a new note can take four years or more. The tender for the £20 substrate has been put on hold to accommodate a decision on the future composition of the polymer used, but the Bank needs to take a decision soon in order to be able to launch the new £20 polymer note by 2020. Since December 2016, the Bank has been working with De La Rue and Innovia Security, the potential suppliers of polymer substrate, to assess alternative options, such as palm oil or coconut oil. Their conclusion is that the only practical alternative to animal-derived additives are additives derived from palm oil, which offers a mature supply chain. While palm oil is a very high-yielding crop, there are a number of identified environmental impacts, which are set out more fully in the Efeca Report. These can be potentially mitigated by the Bank’s suppliers acquiring additives that meet an associated certification standard for environmentally sustainable production.
In reaching a decision about the future composition of polymer notes, the Bank will weigh up a range of considerations in addition to the responses to this consultation. A substrate produced using palm oil must meet the technical and operational requirements to enable the manufacture of secure notes in high volume. The Bank has been working with De La Rue and Innovia Security to gain assurance and they are confident that it should be technically possible. The Bank and its suppliers also need to be confident that this alternative can be supported by a reliable supply chain. This is work in progress but both suppliers would aim, subject to technical and commercial feasibility, to target mass balance certification, under the RSPO framework, towards the start of production of the £20 polymer note. They are working to do so before the Bank makes a final decision. The Bank will also want to ensure that any alternative does not materially increase the cost of production, which is ultimately borne by the taxpayer.
The Bank will reflect upon the various religious, ethical and environmental considerations raised by the inclusion of animal-derived additives and palm oil as the alternative. In doing this, the Bank will pay careful regard to its responsibilities under the Equality Act 2010.
Taking into account the information presented in this consultation paper, the Bank invites views on a number of questions, which can be submitted using an online form.
The consultation paper can be accessed using these links:
Polymer Consultation (Cymraeg)
Efeca Report - Environmental and social impacts of plant based alternatives to tallow
The consultation closes at 23:00 BST on 12 May 2017.
Any other queries about this consultation, or requests for a large print copy of this consultation paper, should be sent to PolymerAdditivesConsultation@bankofengland.co.uk
The Bank reserves the right to publish any information which it may receive as part of this consultation.
Information provided in response to this consultation, including personal information, may be subject to publication or release to other parties or to disclosure, in accordance with access to information regimes, including under the Freedom of Information Act 2000 or the Data Protection Act 1998 or otherwise as required by law or in discharge of the Bank’s statutory functions.
Please indicate if you regard all, or some of, the information you provide as confidential. If the Bank receives a request for disclosure of this information, the Bank will take your indication(s) into account, but cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system on emails will not, of itself, be regarded as binding on the Bank.