Margherita Trombetti, Project Manager at the European Brands Association (AIM), explores how digital watermarks are transforming the way we sort plastic waste.
Sorting post-consumer packaging waste remains one of the toughest challenges on the path to a circular economy for packaging. It is a complex issue that no single company can solve on its own. However, the HolyGrail 2.0 Initiative shows how collective action – combining resources, expertise, and ambition – can turn innovation into real progress.
As new EU-wide recyclability and recycled-content targets draw closer, the drive to perfect the HolyGrail sorting solution has never been more urgent, calling for continued collaboration across the entire value chain.
A visionary idea to revolutionise packaging waste management
Currently a real buzzword across the globe, the ‘circular economy’ was still a niche, abstract concept when the first iteration of the HolyGrail initiative was set up around ten years ago.
Back in 2016, a small group of companies representing the full packaging value chain – covering brand owners, waste manufacturers, resin producers and converters, retailers, technology providers – came together as the HolyGrail 1.0 consortium to map and explore the potential of different digital-based technologies in the market to optimise packaging sorting.
Initiated by Procter & Gamble and under the aegis of the Ellen MacArthur Foundation, the consortium found that digital watermarking was the most promising technology, offering the possibility of retrofitting in waste management facilities and enabling sorting at a degree of granularity not feasible with current near-infrared (NIR) technologies.
In 2020, the initiative evolved into HolyGrail 2.0 to collectively accelerate R&D for digital watermarking technology. Facilitated by AIM – European Brands Association and powered by the Alliance to End Plastic Waste, the objective was to prove that digital watermarks could transform how we sort plastic packaging waste – not just in a lab, but in real-life recycling plants, at industrial speed and scale.
Digital watermarks are optical codes the size of a stamp, and imperceptible to the naked eye. They carry a wide range of data about the packaging on they are applied to, such as material type, application, stock keeping unit, and other manufacturer data.
Detection sorting units with high-resolution cameras and processors can read these watermarks to produce more granular and high-quality sorting packaging.
From vision to reality: The HolyGrail 2.0 journey
To reach the highest Technical Readiness Level, the technology had to function seamlessly across the entire system, enabling high-speed detection hardware, intelligent sorting software, and deployment in commercial facilities.
This required coordination across nine dedicated work packages, including data management, printing and engraving guidelines for the digital watermarking application, and business development, to which member company representatives contributed their expertise.
In the first phase, detection modules co-developed with machine suppliers Pellenc ST and Tomra, and technology provider Digimarc, achieved an impressive 96% success rate in reading watermarks under controlled conditions.
Encouraged, the team moved to semi-industrial trials at the Amager Resource Centre (ARC) in Denmark and Tomra’s German headquarters. There, the prototypes reached 99% detection and over 93% purity. Open House demonstrations in late 2021 showcased the technology in action, sparking excitement across the consortium.
The final phase brought the ultimate test: Bringing real, post-consumer watermarked packaging from participating brand owners and retailers into a live commercial material recovery facility.
The results were remarkable. The system successfully identified and separated post-consumer packaging with a level of precision unmatched by existing technologies, proving that digital watermarks can make circular packaging a tangible reality.
Yet with progress comes new challenges. The next step is to demonstrate that the technology can scale commercially, establish a robust business case for all stakeholders across the value chain – from brand owners to recyclers and sorters – and prove that recycled material from digitally sorted packaging can safely return into new packaging applications.
In parallel, developing a standardised and open data ecosystem will be vital: one built on common standards, enabling seamless information exchange across stakeholders, with clear roles, responsibilities, and secure access that protects sensitive company data.
Scaling the solution: Making circular packaging work for the industry
That’s the ambition driving the next chapter, HolyGrail 2030 – Circular Packaging, which marks a decisive step forward in turning innovation into large-scale impact. Building on the achievements of HolyGrail 2.0, this new phase shifts focus from proving the technology to proving its value economically, technically, and environmentally.
The goal is clear: To demonstrate that digital watermarks and the wider recycling system, including the conversion of sorted materials into high-quality recyclates, can operate successfully and profitably at scale.
With the EU’s 2030 Packaging and Packaging Waste Regulation (PPWR) targets fast approaching, members of the HG2030 – Circular Packaging Consortium have pooled resources and expertise for a two-year market demonstration designed to unlock the circularity of polypropylene (PP) packaging. Their shared mission is to build the business case for recycled PP, ensuring its consistent availability across the entire packaging value chain.
Through this collaborative effort, the consortium aims to assess both the technical performance and economic feasibility of different solutions – from digital watermarking to complementary digital-based technologies.
Together, members want to prove that making high-quality recycled PP available for all stakeholders is not just possible, but a compelling opportunity to close the loop on plastic packaging.