Study compares environmental impact of using banknotes to driving a car

The European Central Bank environmental footprint study of euro banknotes as a payment instrument found an average citizen's use of banknotes in 2019 equalled 0.01% of the total environmental impact of their annual consumption activities.

The average person's use of banknotes in the EU every year has a similar environmental impact to driving a car for 8km.

That number is far lower than washing a t-shirt over a year, which is akin to driving for 55km, or drinking bottled water for a year which is similar to a trip from Cork to Dublin.

Those are some of the findings from an analysis of the environmental footprint of using banknotes across Europe, where cash remains king, despite the major inroads made by digital payments in recent years.

The European Central Bank (ECB) environmental footprint study of euro banknotes as a payment instrument found an average citizen's use of banknotes in 2019 equalled 0.01% of the total environmental impact of their annual consumption activities.

The study looked at the full cycle of euro banknotes, from raw material acquisition, manufacturing, distribution and circulation, to disposal by euro area national central banks, the ECB said.

"The eurosystem is committed to making euro banknotes as environmentally friendly as possible, while ensuring cash is widely available and accepted,” said ECB Executive Board member Piero Cipollone.

The emissions mostly come from ATMs and transportation, followed by processing by central banks, paper manufacturing, and the authentication of banknotes in shops, the study said.

Where they score highly compared to other everyday activities is their reuse.

Long lifespan

The long lifespan of banknotes and the fact they are used for many payments means the impact of banknote production is lower than that of transportation and distribution, the ECB study said.

"It is worth comparing the results of the annual value of euro banknote payments with those of other everyday products, such as the production of a cotton tee-shirt that is washed once a week for a year (comparable to driving 55km) or the manufactured bottles of water consumed by a euro area citizen in one year (equivalent to driving 272km)," the study said.

The study only focused on banknotes as opposed to the impact that euro coins and electronic payments have on the environment.

The euro is used by about 340 million Europeans and used either directly or indirectly in more than 60 countries by another 175 million people, according to ECB data.

Card payments across the EU have dipped in recent years since a high of 2019, the year before the covid-19 pandemic.

According to global data systems analyst Statista, the total number of payment card transactions in the EU fell by more than 2% between 2021 and 2022, the second negative growth figure since 2000. 

In 2022, card payments were approximately 7.2 billion, Statista said.