Lebenszyklus Der Schweizer Banknoten.en

Life cycle assessment (LCA) of Swiss banknotes

by Frank Wettstein, Cash Division, Swiss National Bank, Berneand Hubert Lieb, Environmental Unit, Swiss National Bank, Zurich

SNB 1 Life cycle assessment (LCA) of Swiss banknotes

Under article 1 of the National Bank Law of1905, the Swiss National Bank (SNB) has the exclu-sive right to issue banknotes. On 20 June 1907, theday it took up business, the SNB issued its first bank-notes, which were largely patterned after the notes ofthe former issuing banks. During a transition periodof three years, these so-called interim notes contin-ued to be in circulation in addition to the older bank-notes.

From 20 June 1910 onwards, only the banknotesissued by the SNB were legal tender. A year later, inSeptember 1922, it issued its first banknotes devel-oped independently. Since that time, the SNB has puta new banknote series into circulation every twentyyears on average. The notes of the latest series,which was designed by the graphic artist JrgZintzmeyer, were put into circulation in progressivesteps between 1995 and 1998.

This project aims to analyse the life cycle of theSwiss banknotes, from their development and pro-duction, to their destruction and disposal. In the 1stchapter, we shall begin with some facts and figureson banknote circulation in Switzerland and its sig-nificance. Chapter 2 describes the development of abanknote series using the example of the latestseries. Chapters 3 to 5 provide an outline of the pro-duction (chapter 3), the issue and redemption (chap-ter 4) and the processing, destruction and disposal ofbanknotes (chapter 5). Chapter 6 contains informa-tion on the economic costs that arise during the lifecycle of banknotes. In the 7th and final chapter, thecost factor is defined in broader terms so as toinclude the ecological costs as well. In its ecologicalcharter, the SNB set itself the goal to design, distrib-ute and dispose of banknotes in a way that is as envi-ronmentally compatible as possible. Consequently, in1999, a comprehensive product environmental per-formance evaluation of Swiss banknotes was com-piled. We shall describe the process and provide asummary of results.

1

Cotton fibreproduction

Paperproduction

Banknoteproduction

Processingof banknotes

Disposalof banknotes

Use ofbanknotes;circulation

Developmentof banknotes

Storing anddistribution

Life cycle assessment of Swiss banknotes Illustration 1


1 Banknote circulation in figures

At the end of June 2000, Swiss banknotes to thevalue of Sfr 31.8 billion were in circulation. The largedenominations accounted for a relatively big propor-tion of the banknotes in circulation, i.e. 53% were1000-franc notes and 15% were both 500-franc and200-franc notes. The 100-franc notes added up to22% of the total, whereas the 50-franc, 20-franc and10-franc notes amounted to 5%, 3% and 2% respec-tively. The high proportion of large denominationsindicates that banknotes are not only used as ameans of payment but to a considerable degree alsoas a store of value.

The amount of banknote circulation can also beexpressed in the number of notes rather than infrancs. At the end of June 2000, approximately 250million banknotes were in circulation. Overall, thisbreakdown shows a much more even distribution ofthe different denominations than the one by amount.The proportions vary between 7% for the 1000-francnote and 27% for the 100-franc note.

Banknote circulation has risen drastically interms of value since the SNB started business in1907. A part of this increase is due to inflation. Illus-tration 2 shows the development of the nominalbanknote circulation and of the banknote circulationin real terms, deflated with consumer prices (at theprice level of 1907).1 After that, from the end of 1907 to the end of 1999, nominal banknote circula-tion increased by 23,257% or by 6.1% p.a. Thegrowth rates for banknote circulation in real termsare decidedly smaller, but still considerable at2,148% or 3.4%, respectively.

The increase in banknote circulation is, in part,also a reflection of economic growth. Illustration 3depicts the course of banknote circulation scaled tothe nominal gross domestic product (GDP). Thisshows that the ratio between banknote circulationand nominal GDP has fallen steadily since the end ofthe Second World War. In other words, banknote cir-culation has risen at a slower rate than nominal GDP.This development reflects the progress in the pay-ment technology which has contributed to cashlesspayment transactions becoming more widespread andallowed companies and households to keep less cashon hand. In contrast to the post-war period, bank-note circulation scaled to nominal GDP had still risenduring the first four decades of the century, however.Initially, the reason for this development was theincreasing replacement of metal coins and drafts bybanknotes in the early years of the SNB. Later on, it

was especially general uncertainty during the FirstWorld War as well as deflation at the beginning of the twenties and again during the Great Depression inthe thirties that contributed to the stockpiling ofbanknotes.

Even though banknotes have tended to becomeless significant during the last decades, they remainan important means of payment. This is particularlytrue also in the case of Switzerland which, by inter-national standards, has a relatively high amount ofbanknotes in circulation. Table 1 shows currency incirculation scaled to nominal GDP of the seven larg-est industrial countries and Switzerland as of the end of 1998. In order to facilitate an internationalcomparison, currency in circulation was given prefer-ence over banknotes in circulation. It comprisesnotes and coins which are not held by banks andSwiss Post.2 The results reveal that the ratio betweencurrency in circulation and nominal GDP ranges from2.9% (for U.K.) to 11.0% (for Japan). At 9.3%,Switzerland ranks second behind Japan, thus exhib-iting an amount of currency in circulation that isabove average.

Such international comparisons should be inter-preted with a grain of salt, however. Banknotes of dif-ferent countries are likely to circulate or be stock-piled in varying proportions in foreign countries. It isknown, for example, that U.S. dollar notes are usedas a parallel means of payment or store of value inlarge quantities outside the United States. The cur-rency quotas calculated, therefore, are likely to bedistorted in part. Unfortunately, there is no preciseinformation on what proportion of banknotes in cir-culation of a given currency is held outside the bor-ders of the respective country.

2 Data was taken from the IMFInternational Financial Statistics.The difference in quantity be-tween banknotes in circulationand currency in circulation isnegligible so that the results arenot influenced significantly bychoosing currency in circulation.

1 The banknotes of the formerbanks of issue mentioned previ-ously, which circulated parallel tothe SNB banknotes until 1910 and the Bundeskassenscheine(certificates which were redeem-able in gold) issued by the Con-federation and in circulationbetween 1914 and 1929 are in-cluded in these figures.


1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000100

1 000

10 000

100 000

nominal real

In Sfr millions, logarithmic scale

Banknote circulation 19071999 Illustration 2Year-end data, at 1907 prices

1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

0.05

0.1

0.15

0.2

0.25

0.3

Banknote circulation/nominal GDP

The ratio between banknote circulation and GDP Illustration 3Year-end data

United States 5.4

Japan 11.0

Germany 7.2

France 3.4

Italy 6.1

United Kingdom 2.9

Canada 3.6

Switzerland 9.3

Currency in circulation by international standards (currency in circulation in % of the nominal GDP, 1998) Table 1


2 Development of a banknote series

The SNB has produced eight banknote seriessince its establishment. Table 2 indicates the denom-inations and the names of the notes designers foreach series. In addition, the date of the first issueand the date of recall are given.3

Only a part of the eight banknote series was putinto circulation. The second and third series alsoincluded reserve banknotes which were never put intocirculation. The fourth and the seventh series werereserve series only, created in the event a serieswould have to be replaced immediately for pressingreasons (e.g. a disproportionate number of counter-feits). The reserve series designed by R. and E. Pfundin the 1980s is likely to have been the last one. Infuture, we will forego the considerable time andeffort spent on such a venture. Instead, banknotes incirculation will continuously be developed furtherand brought in line with the latest technologicalstandards.4

When designing a new banknote series, thereare three different requirements to be considered.First, the banknote must meet the security require-ments. With the help of security features, the publicshould be able to recognise genuine banknotes easilyand to identify counterfeits. These security featuresmust be difficult to forge. The rapid development ofreproduction technology forces the SNB to ever-newadjustments of security features. Second, the bank-note must be user-friendly. Users want banknotesthat are easy to handle and to distinguish. Theyshould also be tough and available in practicaldenominations. Third, banknotes should be aestheti-cally pleasing. The designer of a banknote, therefore,must try to reconcile the artistic design with thetechnicalities of user and security requirements. TheSNB defines the design elements in the TechnicalDirectives. These elements pertain to the colours,the personalities to be featured, the motifs as well asthe placement of the security features, the denomi-nation and the SNB lettering in the four official lan-guages.

The development of the latest banknote seriesbegan in the eighties when several basic decisionswere taken. The first choice was to issue a 200-francnote instead of the 500-franc note. In doing so, theSNB reacted to the sharply declining proportion ofthe 500-franc note in circulation. In addition, severalchanges were made to the format of the banknotes.First of all, uniform breadth of 74 mm was set for allbanknotes, thus making their handling by machines

considerably easier. In addition, the difference inlength between two denominations was set at 11 mm.With a length of 126 mm, the 10-franc note is thesmallest of the series, whereas the 1000-franc note,measuring 181 mm, is the largest. This should alsoenable visually impaired users to distinguish the bank-notes easily. In addition, to make the 20-franc andthe 100-franc note clearly distinguishable from oneanother, we decided in favour of a red colour for theformer (both notes were blue before).

The selection of security features was given par-ticular attention. The decisive factor was that only an optimum combination of features meeting criteriapertaining to availability, effectiveness and costwould provide adequate protection against counter-feiting. The features which had already been used inprevious series were supplemented with new ones forthe new notes. The magic number, the coloured num-ber, the moving number, the perforated number, thechameleon number and the glittering number shouldhelp verify the authenticity of the banknotes.

The personalities to be represented were select-ed based on the suggestions by external specialists.Six Swiss artists were chosen whose work is interna-tionally renowned.

Fourteen artists were invited to participate in acompetition for the artistic design of the banknotesand given the established parameters. A ten-memberjury selected three of the designs submitted. The win-ners were subsequently asked to work out a designconcept for one denomination all the way to theprinting stage. Based on the results, the SNB BankCommittee, in whom the respective responsibility isvested, appointed Jrg Zintzmeyer to design the newbanknotes in 1991.

The banknotes of the current series have beenproduced by consistently applying computer technol-ogy. They are thus a novelty both on a technologicallevel and from a design point of view. The first bank-note of the series, the 50-franc note (Sophie Taeu-ber-Arp), was put into circulation in October 1995.Approximately one year later, the 20-franc note(Arthur Honegger) was issued. At intervals of sixmonths each, this was followed by the 10-franc note(Charles-Edouard Jeanneret, Le Corbusier), the 200-franc note (Charles Ferdinand Ramuz), the 1000-franc note (Jakob Burckhardt) and the 100-franc note(Alberto Giacometti).

3 When a banknote is recalled, a deadline is given which deter-mines up to what date banknotesmay still be accepted by banks,Swiss Post or by the SNB.

4 For a comprehensive historyof the Swiss banknotes since1907, see Michel de Rivaz, Le billet de banque suisse19071997 Die schweizerischeBanknote 19071997 The SwissBanknote 19071997, Collectionla mmoire de lil, 1997.


1 After recall, banknotes canstill be exchanged at the SNB attheir nominal value for another20 years.

Series Denomination Concept 1st issue Recall1

1. 1000, 500, 100, 50 Interim notes 20.06.1907 01.07.1925

2. 1000, 500, 100, 50, F. Hodler, E. Burnand, Balzer 16.09.1911 31.12.1935 20, 5 03.08.1914 01.05.198040, 10 G. Lory, F. Moritz, Balzer Reserve notes

3. 100, 20 Balzer, Orell Fssli 27.09.1918 01.07.1925 15.07.1930 01.04.1956

100, 20, 20 Reserve notes

4. 1000, 500, 100, 50 H. Erni, V. Surbek Reserve series

5. 1000, 500, 100, 50, P. Gauchaz, H. Eidenbenz 29.03.1956 01.05.198020, 10 14.06.1957

6. 1000, 500, 100, 50, E. and U. Hiestand 04.10.1976 01.05.200020, 10 05.11.1979

7. 1000, 500, 100, 50, R. and E. Pfund Reserve series20, 10

8. 1000, 200, 100, 50, J. Zintzmeyer 03.10.1995 20, 10 01.10.1998

The current banknote series (designed by J. Zintzmeyer) Illustration 4

The banknote series of the SNB Table 2


3 The production of banknotes

The current Swiss banknotes are printed on spe-cial paper supplied by the firm landQart. This paperis made of linters and combings (short cotton fibres)which are by-products of the processing of cotton.Cotton products are used because their special fibrestructure gives banknotes their resistance and dura-bility. The cotton fibres are divided into small sec-tions, shortened and crushed before they are mixedwith filling material, glue and colouring matter. Thepaper machine forms the watermark, integrates thesilver thread and drains the paper. After the dryingprocess, printability and surface sizing is enhancedby applying a coat of starch. Afterwards, the paper issmoothed and rolled up. In the finishing area, thepaper rolls are cut to size and piled up sheet by sheeton pallets ready for delivery to the printer.

In addition to special paper, the production ofbanknotes also requires special security colour whichmust meet the strictest requirements: it must beresistant to 18 different chemicals as well as to light,and it must even be machine-washable at high tem-peratures without being damaged! The supplier forsecurity colours for the printing of Swiss banknotesand many foreign ones is Sicpa SA in Prilly-Lausanne.

The latest banknotes series, as the previousones, is printed by Orell Fssli Security Printing Ltd.The company uses printing machines manufacturedby a company in western Switzerland, De La Rue GioriS.A. in Lausanne. The current banknotes are manu-factured in a process comprising a total of four dif-ferent printing procedures, two application proce-dures and a perforation procedure.

The printing process begins with the processingof the electronic data delivered by the artist. Theoriginal printing plates are generated via CAD (Com-puter Aided Design). With a Supersimultan offsetprinter, the sheets of paper are then printed on bothsides with different multicoloured lines. The printingis so precise that, because the lines match up, thereis a transparent register. The application machineapplies the moving number (Kinegram) and theglittering number (metal-coated number). The cha-meleon number (optically variable ink) and the magicnumber (iriodin digits) are two additional securityfeatures that are subsequently applied onto thesheets by means of silkscreen printing. Intaglio orsiderographic printing creates a relief which is recog-nisable by touch and presents itself to the eye in adifferent way depending on the angle. Unlike manyforeign banknotes, Swiss banknotes are printed by

intaglio printing both on the front and on the back.Whats more, by applying a perforation procedure,banknotes are then equipped with the perforatednumber (a feature known as microperf). They arethe first notes in the world to have this feature.

In the next production step, by means of a num-bering machine and in letterpress printing, the bank-notes are turned into individual pieces and coatedwith a varnish. A cutting machine divides the finishedsheets into single banknotes. A computer-guided de-vice then checks the printing quality of the bank-notes and eliminates faulty ones. In a final step, bun-dles of a hundred notes are packed, loaded intocrates and prepared for transport to the Cash Divisionof the SNB in Berne.

A quality control takes places in the Cash Divi-sion in Berne by means of a spot check of 5% of thebanknotes that come off the press. Specially trainedpersonnel verifies the general appearance of the bank-notes and two security features that change daily. Inaddition, the machine-readable authenticity featuresare checked with a banknote-testing device. Faultybanknotes are rejected and destroyed. Once the bank-notes have successfully passed the quality control,they are stored in the SNB vaults. The remaining 95%of the banknotes delivered fresh from the press areweighed for control purposes and also stored.

Quality control Illustration 5


4 Issuance and redemption ofbanknotes via the SNBs networkof cash distribution services

Issuance and redemption of banknotes is car-ried out via the SNBs network of cash distributionservices. This network comprises the SNBs four ownbank offices with cash distribution services (headoffices in Berne and Zurich, branches in Geneva andLugano), 18 agencies and almost 700 domestic corre-spondents.

The SNBs four own bank offices are the largestunits of Switzerlands network for the provision ofcurrency. These offices have processing and storagecapacities and are responsible for the provision ofcurrency in their respective regions. They are also incharge of servicing the agencies they are responsiblefor.

The agencies are cash distribution servicesoperated by cantonal banks on behalf of the SNB.These agencies are responsible for the issuance andredemption of cash at their place of business and unlike the four SNB bank offices only have limitedprocessing and storage facilities for cash.

The so-called domestic correspondents arebanks entrusted with a mandate by the SNB and oper-ate mostly in rural areas. They cover most of theircash needs directly at the local post offices. Sincecash typically accumulates at the post offices duringthe course of the month, as postal customers makepayments, this is compensated for on a local level,thereby helping post offices to unload their surpluscash and supplying banks with cash.

The SNB organises the transport of cashbetween its bank offices and the agencies. All othertransports are the responsibility of its customers.They are often handled by specialised private securi-ty transport companies.

Customers cannot simultaneously offer anddemand notes of the same denomination. For exam-ple, they cannot return 100-franc notes and get newones at the same time. The SNB thus forces the cus-tomer to pre-sort the banknotes. Banknotes receivedby the customer should again be spent in the samedenomination and only the excess delivered to theSNB. This rule keeps customers from passing on tothe SNB the sorting necessary for their own purposes.Some customers have outsourced this pre-sorting tocash handling companies.

The SNB issues and receives a large volume ofbanknotes each year. In 1999, approx. 490 millionnotes were issued and 470 million received. With anaverage banknote circulation of 250 million, a bank-note is therefore returned to the SNB 1.9 times onaverage. As a result of the replacement of the sixthseries with the eighth banknote series, this figure isslightly above the long-term average of approxi-mately one-and-a-half times a year. In other words,in a two-year period, the banknotes are returned tothe SNB roughly three times. Illustration 6 shows thatthe annual return is different for each denomination.Overall, the big denominations return to the SNBmore frequently than the small ones.

Denominations10 20 50 100 200 500 1000

0

1

2

3

4

5

6

Banknote return to the SNB Illustration 6Number of returns per year


5 Processing and destruction of banknotesBanknotes that are routed to an SNB bank office

directly or via the network of cash distribution ser-vices are sorted and checked for authenticity in spe-cial sorting machines. Authentic banknotes in goodcondition are put into circulation again. Genuinebanknotes that are damaged and dirty are destroyedimmediately. Notes that the sorting machine doesnot clearly recognise as authentic are rejected andmust be checked manually. Counterfeit banknotes arehanded over to the police.

Notes that are fragmented, burnt, worn, or due to improper opening of a security case havebeen mixed with colour or are otherwise severelydamaged are sent to the cash division in Berne for averification of their authenticity. Genuine banknotesof which more than half is intact and whose seriesand number are recognisable are redeemed at theirnominal value. If exactly half of a banknote is givento the SNB, the customer will be credited with half ofthe notes nominal value.

In principle, the SNB uses two methods todestroy banknotes: destruction via the sortingmachine or manual destruction. The sorting machinesused for the processing of banknotes have an inte-grated shredder which in one and the same pro-cess destroys banknotes that have been recognisedas authentic but are no longer useable. Notes thatcannot be processed by the sorting machine becausethey are part of an old series or are in very bad con-dition and are thus rejected must be destroyed in ashredder under tight security conditions. What re-mains after using both methods of destruction arebanknote scraps, which are pressed and subsequentlybrought to a public waste incineration plant.

The life span of a banknote varies depending onthe denomination (see illustration 9). Large denomi-nations tend to have a longer life expectancy thansmall ones. The 1000-franc, 200-franc and 100-francnotes are in circulation for four years on average,whereas the 50-franc, 20-franc and 10-franc notesmust be destroyed already after two to three years. In1999, destroyed notes accounted for just under 20%of the notes processed. It was thus every fifth noteprocessed that had to be taken out of circulation. TheSNB has approximately 100 million notes printed peryear to replace the ones that were destroyed.

Denominations10 20 50 100 200 500 1000

0

1

2

3

4

5

6

Life span of the banknotes Illustration 9Number of years

Sorting machine Illustration 7

Banknote scraps before they are transported to the incineration plant Illustration 8


6 The costs of the cash distribution system

The good quality of the Swiss banknotes has itsprice. The costs of producing a banknote (conceptionand design, paper, printing, information) averageapproximately 30 centimes per new note. Assumingthat the average life span of a banknote is three years,the yearly production cost comes to 10 centimes pernote in circulation.

The yearly processing costs the SNB incursamount to about 20 centimes per note in circulation. Ifyou add up the yearly production and processing costper banknote, the yearly overall cost amounts toroughly 30 centimes per note in circulation.

The cost of the cash distribution system is aprominent item in the SNBs income statement. Over-all, roughly half of the SNBs total costs of approxi-mately Sfr 190 million are accounted for by expensesrelating to the cash distribution system.

7 A product environmental perfor-mance evaluation for banknotes

7.1 Objective and method

Within the framework of its environmentalcharter, the SNB has set itself the goal of organisingthe cash distribution system as environmentallycompatible as possible. To serve as a basis, a productenvironmental performance evaluation of Swiss bank-notes was compiled in 1999. A product environmentalperformance evaluation (or life cycle assessment =LCA) is concerned with the environmental impact of aproduct, encompassing its entire life cycle from rawmaterial extraction, all major processing, transportand treatment stages up to waste disposal. For all theprocesses under review, raw materials used and emis-sions in air, water and soil are analysed and evaluat-ed. In our case, the life cycle assessment shouldenable us to assess whether the banknotes are prob-lematic from an ecological (and/or health) perspec-tive, whether certain processes during their life cyclepose particular risks to the environment and to iden-tify potential areas for improvement.

The SNB followed an internationally recognisedprocedure, i.e. ISO norm 140405 for the compilationof the life cycle assessment. Evaluating and weight-ing the input and output factors that are ecologicallyrelevant was accomplished on the basis of a pointsystem widely used in Switzerland (UBP 97)6. This sys-tem classifies the impact factors that are detrimentalto the environment. In addition, certain environmen-tal effects were analysed specifically, i.e. the impactof the life cycle of banknotes on the greenhouseeffect, acid rain and summer smog.

7.2 System and process parameters

In principle, all processes affecting the environ-ment, i.e. input and output factors, should be con-sidered in the life cycle assessment of a product. In afirst step, it must be determined which areas are tobe included in the life cycle assessment. Subsequent-ly, system boundaries must be defined. The impact ofcertain processes is not so significant as to merittheir compilation.

5 ISO = InternationalStandardisation Organisation

6 The basis for this system ispublic perception of environmen-tal impact which was defined inthe objectives of Swiss environ-mental policy and in the 1997legal system. In this connection,also refer to BUWAL 1997 (Swiss

Agency for the Environment,Forests and Landscape), publica-tion on the environment no. 297.An alternative concept to the UBP 97 point system is the eco-indicator 95 used in many Euro-pean countries that was also con-sidered for comparison purposes.


The life cycle assessment for the Swiss bank-notes is based on the data of the eighth banknoteseries of 1998, extrapolated based on a median yearlyrequirement of the sixth series. Illustration 10 showsthe six main processes which were included in theanalysis: Cotton production, fibre production, paperproduction, note printing, banknote distribution(internal transport, storage, processing) and wastedisposal. What was not included were security trans-ports on behalf of the commercial banks and otheragencies (i.e. the distribution of banknotes from theSNB bank office or agencies) as well as the publicsuse of banknotes.

In accordance with the breakdown shown inillustration 10, the ecological relevance of materialand energy flows was measured roughly on the basisof an estimated annual production of about 100tonnes or 100 million banknotes, respectively. Mate-rials used in quantities in excess of 2 tonnes wereincluded in the life cycle assessment. However, mate-rials with smaller yearly quantities were only consid-ered if there was evidence of toxic material or ecolog-ical relevance. This especially refers to colours andvarnishes as well as auxiliary materials used in theproduction of paper.7

7.3 Data

The input and output data of the individualprocesses was compiled on the basis of the 93.4tonnes8 of banknotes of the sixth series the SNBreceived from Orell Fssli on average per year. In the case of processing processes within the SNB, thisfigure was multiplied with the median annual circula-tion frequency and the average life span of the bank-notes. As a rule, standard published data were gener-ally used to calculate electricity consumption,heating, transport, infrastructure, materials and aux-iliary materials as well as waste management pro-cesses.9

Data on cotton production in part only ap-proximate figures was taken from the literature.10

For example, only the total energy use per kilogramof harvested cotton is known. Since relatively inferiorcotton parts are used for the production of paper, thedamage to the environment of cotton production wasmeasured relative to the economic value of the fibres.Transport of cotton into Switzerland was not takeninto consideration since the country of origin cannotbe determined. Furthermore data whose quality israted as medium to good is also available from com-panies producing linters and combings (short cottonfibres).

Process chart of the banknote life cycle Illustration 10

Cottonproduction

Fibreproduction

Paperproduction

Printingof notes

Notecirculation

PaperLinters

Combings

Cotton

Colour andvarnish

Offset printing

Screen printing

Foil application

Intaglioprinting

Laserperforation

Numbering

Varnishing

Cutting

Waste disposalof banknotes

Waste disposal

Transport

Storage in Berne

Disposal of paper

Control

Transport toagencies

Storage and pro-cessing in Zurich/

branch officeStorage and pro-cessing in Berne

Banknotescraps andedge cuttings

7 During circulation, banknotesabsorb very small quantities ofmany different toxic substanceswhich cannot be estimated withreasonable effort.

8 After the new banknote serieswas issued, only a little under 78 tonnes had to be procured in1998. The production process,therefore, had to be converted orindexed by a factor of 1.2.

9 Linking the data in the mate-rial balance sheet (input and out-put data) as well as the calcula-tion was carried out with the EMIS

software (version 2.2) whichalready contains standard data byESU-ETH (Federal Institute ofTechnology), Infras and othersources that are used frequently.

10 Laursen/Hansen/Bagh/Jen-sen/Werther (1997) on worldwidecotton cultivation: Spaar (ETHZurich, without date) on cottoncultivation in the U.S.


11 This is a sensible assumption.In Switzerland, power from amains supply generated from pre-dominantly nuclear and waterpower plants in addition to someproportion coming from importedelectricity. If landQarts own pro-duction were included as elec-tricity from water power plant,

12 For purposes of the sensitivityanalysis with infrastructure, theestimated life expectancy (vaults100 years, machines 1060 years,vehicles 510 years) was added tothe corresponding processesacross the board.

pollution resulting from paperproduction in the environmentalperformance evaluation in illus-tration 11 would be reduced byone quarter.

There is new data of good quality on the bank-note paper production process as a whole. 40% oflandQuarts power supply is generated from its ownriver power plant. Since it can run independentlyfrom the paper company, the entire electricity usedwas reported as mains power supply.11

There is also reliable data on the individualprocessing steps of printing banknotes. Generalprocesses, such as lighting, administration, andlabour are not included. 15% of the substances incolours and varnishes belong to the toxic class 3 or 4(approx. 400 kg per year). 50% of the substances in screen printing colour belong to toxic class 4 or 5.After they are dry, colours and varnishes are nolonger toxic. No data is available on the metal foil(kinegram). Since the synthetic carrier foil makes upmost of the weight of the banknote, standard data forpolyethylene was used as a substitute.

Data for the various processing steps withinthe SNB were taken from the annual SNB environ-mental performance evaluation. While adding the useof resources to the cost of banknotes worked well inthe case of smaller bank offices, the correspondingfigures for the two head offices had to be projectedbased on the empirical values from the branchoffices.

With regard to waste management, shreddedbanknotes destined for the waste incineration plantwere reported as fresh fibre paper, since no detailedinformation on the substances in the dried colour wasavailable. This assumption appears unproblematicsince according to the information available printing colours and varnishes do not contain anycritical substances. In connection with the incinera-tion of paper, the energy generated in the wasteincineration plant as well as the useful heat wasadded to the banknotes credit column.

7.4 Results

The results of the life cycle assessment for bank-notes are first discussed in view of the overall dam-age to the environment, which is measured on thebasis of UBP 97 (a point system to measure environ-mental impact predominantly used in Switzerland).Afterwards, the impact of banknote circulation on thegreenhouse effect, acid rain and summer smog isexamined.

Environmental pollution Illustration 11 shows the environmental pollu-

tion caused by the different processing steps. Storingand processing banknotes at the SNB are the mostsignificant factors, accounting for approx. 1,300 mil-lion points (UBP 97), i.e. just under half of the over-all environmental pollution. Printing and paper pro-duction contribute to pollution to a considerablylesser degree. Together, these processes make uproughly a third of the UBP 97 points. The high valua-tion of storage and processing is, among other fac-tors, due to the fact that the banknote sortingmachines, air-conditioning and lighting of the roomsare in operation throughout the entire year at theSNB. One must bear in mind that each banknote isprocessed five to six times on average during its lifespan. The annual requirement for new banknotes, bycontrast, is printed within a few months, while paperproduction takes even less time, only a little overthree weeks per year.

At just under 10%, environmental pollutionconnected with the raw material cotton is not negli-gible, while unreliable data must duly be taken intoconsideration. What is negligible, however, is thepollution caused by the disposal of banknotes.

In general, it is evident that in most processingsystems, particularly the storing and processing ofbanknotes, the use of electricity (or more accurately theprovision thereof) is the least eco-efficient. Besidesthese factors, however, transport, heating, pollutivewaste (from the printing of banknotes) and emissions(fertilisers and pesticides from the cultivation of cotton)have a significant impact on the environment as well.

If the infrastructure (machines, vaults, vehi-cles, etc.) is included in the calculation, environ-mental pollution increases by 13% overall,12 with theadditional burden being attributable to the SNB. En-vironmental pollution is even greater if instead ofthe mix of electricity sources in Switzerland theEuropean one is used which has a greater proportionof coal and oil power plants.


Certain shifts in emphasis occur if, instead ofthe UBP 97, the eco-indicator 9513 is applied. The lat-ter is widely used in the countries of the EuropeanUnion. Consequently, by using the eco-indicator 95, alittle less than a third of the environmental pollutioncaused by banknotes is attributable to cotton. This isbecause the pesticides used for this crop are weight-ed more than with the UBP 97 method. The ratios forthe other processes remain roughly the same.

Greenhouse effect The greenhouse effect is the warming of the

atmosphere caused by the emission of excess carbondioxide, methane and other gases. Illustration 12shows the greenhouse gases generated by the dif-

ferent processes in tonnes of C02 equivalents. With an average requirement of 93.4 tonnes of banknotes,the emission volume is approximately 1.6 milliontonnes of CO2 equivalents. This corresponds to thegreenhouse effect resulting from the combustion ofapproximately 650,000 litres of extra light heating ordiesel oil, or the annual heating oil consumption ofabout 200 single family homes.

As is the case in the assessment of overall dam-age, the storing and processing of banknotes at theSNB matters most because its energy consumption isrelatively high. The other three processes togetheraccount for less then half of the C02 emission.

200

400

600

800

1000

1200

1400

CombingsLintersCotton

Auxiliary materialsand transportPaperproduction

EquipmentVarnishingNumberingLaser perforationIntaglio printingFoil applicationScreen printingOffset printing

Waste disposalStorage and processing:Zurich and branch officesBerneTransport:AgenciesSNB

in UBP 97 millions

Yearly environmental pollution Illustration 11measured on the basis of UBP 97 (point system to measure environmental import)

Cotton Paper Printing Processing and storage

200

400

600

800

1000

1200

1400





tonnes of CO2 equivalents

Greenhouse Illustration 12Contribution to greenhouse effect


13 Eco-indicator 95: Environ-mental impact on air and water is weighted using eco-indi-cator points (1995 level), basedon damage to health and to Euro-pean eco systems. Source: eco-indicator 95, NL-Amersfoort1995.


1000

2000

3000

4000

5000

6000





kg SO2 equivalents

Acid rain Illustration 13Contribution to acidification


100

200

300

400

500

600





kg ethylene equivalents

Summer smog Illustration 14Contribution to the summer smog


Acid rainThe release of acid (acid rain) attacks plants

and changes the pH balance of the soil resulting inthe mobilisation of heavy metals. Illustration 13shows the acid rain measured in kilograms of sulphurdioxide equivalents. The total emission volume is justunder 10 tonnes of SO2 equivalents. This approxi-mately corresponds to the effect of burning 3 millionlitres of fuel oil or 400,000 litres of diesel oil in atruck. If emissions are allocated to the individualprocesses a result similar to the greenhouse effectemerges.

Summer smog The picture is strikingly different in the case

of summer smog (ground-level ozone), measured inkilograms of ethylene equivalents, which is createdwhen hydrocarbons (e.g. solvents) and nitrogenoxides react chemically in the presence of sunlight.The total emission amounts to one tonne of ethyleneequivalents, which corresponds to the creation ofsmog from burning approximately 15 million litres ofheating oil or the consumption of 500,00 litres ofdiesel oil in a truck. Screen-printing and varnishingof banknotes account for a particularly significantproportion of this effect.


7.5 Conclusions

Environmental pollution in connection with theSwiss banknotes accounts for a significant part of theSNBs environmental performance evaluation, withbanknote processing alone responsible for one third.Compared with other products, however, Swiss bank-notes are not particularly critical for the environ-ment, even with regard to their composition. Thebiggest environmental pollution is caused by powerconsumption; it would make sense to take effectivemeasures in this area. Contrary to what one mightexpect, waste management is not a very significantfactor, however. Whether banknotes are disposed ofin a waste incineration plant, recycled or compostedis not significant ecologically.

By increasing the life span of banknotes envi-ronmental pollution could be reduced. A 10% in-crease of the average life span would reduce environ-mental pollution by roughly 5%. Any such measureswould, however, have a negative impact on thequality of banknotes in circulation. It would also beconceivable to replace cotton, which is not unprob-lematic, with other carrier materials such has hempor synthetic materials. Very little is known, however,as to the ecology, printability and security of thesematerials.

The ecological life cycle assessment of the bank-notes is a valuable decision-making tool for two rea-sons. On the one hand on the basis of the produc-tion and processing processes for the eighth series the most practical starting points for making ecolog-ical improvements can be identified. On the otherhand, the study is also a useful tool in view of anynew concept for the next generation of banknotes.

Documents

Lebenszyklus Der Schweizer Banknoten.en