Under the auspices of AIM, the European Brands Association, over 85 companies and organizations from the complete packaging value chain have joined forces with the goal to assess whether a pioneering digital technology can enable better sorting and higher-quality recycling rates for packaging in the EU, to drive a truly circular economy.

One of the most pressing challenges in achieving a circular economy for packaging is to better sort post-consumer waste by accurately identifying packaging, resulting in more efficient and higher-quality recycling.

Holy Grail 2.0 watermark reveal visual.

Digital watermarks may have the potential to revolutionize the way packaging is sorted in the waste management system, as it opens new possibilities that are currently not feasible with existing technologies. The discovery was made under the New Plastics Economy programme of the Ellen MacArthur Foundation, which investigated different innovations to improve post-consumer recycling.

Digital watermarks were found to be the most promising technology, gathering support among the majority of stakeholders and passing a basic proof of concept on a test sorting line. The branded goods industry has now stepped in to facilitate the next phase as cross-value chain initiative under the name “HolyGrail 2.0”, which will take place on a much greater scale and scope.

This will include the launch of an industrial pilot in order to prove the viability of digital watermarks technologies for more accurate sorting of packaging and higher-quality recycling, as well as the business case at large scale.

“The 3 key ingredients here are innovation, sustainability and digital, combined to achieve the objective of the Green Deal towards a clean, circular and climate neutral economy”, outlines Michelle Gibbons, Director General at AIM.

Digital watermarks are imperceptible codes, the size of a postage stamp, covering the surface of a consumer goods packaging. They can carry a wide range of attributes such as manufacturer, SKU, type of plastics used and composition for multilayer objects, food vs. non-food usage, and more.

The aim is that once the packaging has entered into a waste sorting facility, the digital watermark can be detected and decoded by a standard high resolution camera on the sorting line, which then – based on the transferred attributes – is able to sort the packaging into corresponding streams. This would result in better and more accurate sorting streams, and thus consequently in higher-quality recyclates, benefiting the complete packaging value chain.

Next to this “digital recycling passport”, digital watermarks also have the potential to be used in other areas such as consumer engagement, supply chain visibility and retail operations.