The Bank of England (BoE) is consulting the public on what materials to use in the new polymer £20 after trace amounts of animal fat were found in the fiver.
The backlash over the use of tallow from animal rights and some religious groups has put the BoE in a difficult position, as its suppliers have said palm oil – a driver of deforestation – appears to be the only viable alternative.
BoE said it has put on hold the tender process for the plastic coating in question while it reflects “upon the various religious, ethical and environmental considerations raised”.
While polymer is based on petrochemicals, a trace amount of animal fat is commonly used in its production because the fatty acids they contain give the plastics their characteristics. The technical requirements of these fatty acids, and the need for a reliable source, means palm oil is likely to be the only practical alternative.
Of the other plant based alternatives, including soybeans, rapeseed and sunflower oil, it would prohibitively inefficient to extract the chemicals or not technically viable. Coconut oil was also considered but its supply chain was “insufficiently mature” and lacked a sustainability certification framework, the BoE said.
The two main suppliers of polymer for bank notes, De La Rue and Innovia Security, still need to test the viability of using palm oil both technically and from a supply point of view.
But environmental groups have said it sustainability could also be an issue. “It would depend on where the Bank of England source it,” Rachel Agnew of the Rainforest Foundation told the BBC.
In response to palm oil's well-documented environmental and social concerns, the BoE has published a report examining the product’s impact and the strengths and weaknesses of a number of monitoring initiatives the risks. It concluded palm oil could be sustainable in the short term if the correct checks were in place and could be made sustainable in the long term by developing commitments to buy from accredited sources. The report was written by consultancy Efeca on behalf of the Bank.
The volumes of palm oil required to make the banknotes were “far too small” to drive an increase in production, it also said.
When BoE signed the contract with its supplier for the £5 and £10 polymer notes it was not aware tallow was used. Although BoE has deemed it too late to change supplier for the new £10 note, which will be issued in September, it is considering the change for the new £20 note and subsequent reprints of the £5 and £10.
BoE said the decision on the £20 note had to be made soon as the current cotton-paper note is “the most heavily counterfeited” of the bills and the bank wants to issue the more secure polymer version by 2020.
The consultation is accepting responses until 12 May.
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