PIONEERING DIGITAL WATERMARKS FOR SMART PACKAGING RECYCLING IN
THE EU
Digital Watermarks Initiative HolyGrail 2.0.
Welcome to the cross-value chain initiative HolyGrail 2.0
Driven by AIM - European Brands Association and powered by the Alliance to End Plastic Waste, over 130 companies and organisations from the complete packaging value chain have joined forces for the Digital Watermarks Initiative HolyGrail 2.0 with the ambitious goal to assess whether a pioneering digital technology can enable better sorting and higher-quality recycling rates for packaging in the EU, driving a truly circular economy.
The objective of the initiative is to prove the viability of digital watermarking technologies for accurate sorting and the business case at large scale.
For any questions, additional information or press related enquiries, please directly contact digitalwatermarks@aim.be.
About
About HolyGrail 2.0
The Digital Watermarks Initiative HolyGrail 2.0 – driven by AIM - European Brands Association and powered by the Alliance to End Plastic Waste – is a R&D project with the objective to prove the technical viability of digital watermarks for accurate sorting of packaging waste as well as the economic viability of the business case at large scale.
Digital watermarks are imperceptible codes, the size of a postage stamp, covering the surface of a consumer goods packaging and carrying a wide range of attributes. The aim is that once the packaging has entered into a waste sorting facility, the digital watermark can be detected and decoded by a high resolution camera on the sorting line, which then – based on the transferred attributes (e.g. food vs. non-food) – is able to sort the packaging in corresponding streams. This would result in better and more accurate sorting streams, thus consequently in higher-quality recyclates benefiting the complete packaging value chain.
For more details on the initiative, please see the general HolyGrail 2.0 Presentation.
About HolyGrail 1.0
The digital watermarks project was part of the broader pioneering project HolyGrail 1.0, which, facilitated by the Ellen MacArthur Foundation and bringing together different stakeholders from the packaging value chain, ran from 2016-2019.
Within this project, different initiatives in the field of improving post-consumer recycling by using chemical tracers and digital watermarks for better sorting were investigated. Digital watermarks were found to be the most promising technology within HolyGrail 1.0, gathering support among the large majority of stakeholders. The technology opens new possibilities for sorting that are currently not feasible with existing sorting technologies. Through the creation of smart packaging, it also has the potential to be used in other areas such as consumer engagement, supply chain visibility and retail operations. At the end of HolyGrail 1.0, a basic proof-of-concept for digital watermarks on packaging was established and demonstrated on a test sorting line during an Open House in May 2019.
The branded goods industry has stepped in to facilitate HolyGrail 2.0 as a cross-value chain initiative to assess how a pioneering digital technology can enable better sorting and higher-quality recycling rates in the EU, leading to a true circular economy.
About digital watermarks
HolyGrail 2.0 looks into coding the surface of packaging for consumer goods with imperceptible codes, so-called digital watermarks. These optical codes are the size of a postage stamp, applied directly within the packaging’s label artwork or embossed in the mould. They can carry a wide range of attributes such as manufacturer, Stock-Keeping Unit (SKU), type of plastics used and composition, food vs. non-food usage. As well as encoding a “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.
HolyGrail 2.0 focuses on how digital watermarks can be used for improved sorting processes of post-consumer packaging waste. The aim is that once the packaging coded with digital watermarks has entered into a waste sorting facility, the digital watermark can be detected and decoded by a high resolution camera on the sorting line, which then – based on the transferred attributes – is able to sort the packaging in corresponding streams (e.g. food vs. non-food). This would result in better and more accurate sorting streams and consequently in higher-quality recyclates benefiting the complete packaging value chain.
Membership
Membership in HolyGrail 2.0 consisted of pioneering stakeholders from the packaging value chain. 130+ companies and organisations have registered to HolyGrail 2.0 throughout the four Initiative years.
The next stage was launched in March 2025: HolyGrail 2030 - Circular Packaging
If your company/organisation is interested in joining this new Initiative stage,
please have a look at our Membership Kit:
Full membership – open to branded goods manufacturers and retailers / 20.000 EUR for project year 1&2 (Q1 2025 – Q4 2026)
Associate membership – open to all stakeholders from the packaging value chain except for brand owners and retailers / 3.000 EUR for project year 1&2 (Q1 2025 - Q4 2026)
HolyGrail 2.0 Charter – outlining the governance and membership structure, meeting and voting rules as well as the anti-trust statement
For further information: digitalwatermarks@aim.be
2024 Full Members
2024 Associate Members
Timeline
Phase 1 -
Prototype Development
The prototype phase focuses on the hardware and the development of a functional add-on module for the detection sorting unit that can efficiently detect and separate the digitally watermarked packaging from packaging waste. The aim is that the validated prototypes will be used for the (semi-) industrial tests within the HolyGrail 2.0 initiative.
The success criteria of this phase consists in the units' ability to detect and sort digitally watermarked packaging of various sizes. The validation of this phase, overseen by the HolyGrail 2.0 Technical Project Management, is based on the selection of 10 digitally watermarked types of packaging which will consist of 3 rigid prints, 3 embossed rigids, 3 flexibles in print and 1 paper based.
The machine vendor Pellenc ST, together with the selected digital watermarks technology provider Digimarc, developed the first add-on module for their detection sorting unit, combining digital watermarks detection with existing NIR sorters. The prototype detection sorting unit was successfully validated in September 2021, achieving a >95% ejection rate.
The second prototype detection sorting unit, developed by machine vendor Tomra and Digimarc, was successfully validated in April 2022, achieving a >95% ejection rate.
Successful completion of Phase 1 brings the Technical Readiness Level (TRL) to TRL 6 – technology demonstrated in relevant environment.
Phase 2 - Semi-industrial Testing
In order to convert the HG2.0 prototype from proof of concept (Phase 1) to industrial scale, the system was tested for speed, accuracy and detection efficiency during the Phase 2 semi-industrial trials. A software model and identification parameters was developed and tested for a category specific sorting based on digital watermark detection.
Both developed prototype detection sorting units were tested at two different test locations that are capable of running semi-industrial trials. The semi-industrial tests of the Pellenc ST/Digimarc prototype started in October 2021 at the Amager Resource Center in Copenhagen. The purpose was to evaluate the technology by replicating real-world industrial conditions. For four months, comprehensive sets of tests were successfully performed on approximately 125,000 pieces of packaging from 260 stock-keeping units (SKUs). Validation tests commenced in January 2022 at the headquarters of Pellenc ST. Consistent high results across all tested categories of plastic packaging material of 99% detection, 95% ejection and 95% purity rates, on average, demonstrated an impressive performance of the first prototype. Similarly, the Tomra/Digimarc prototype detection sorting unit achieved successful validation at semi-industrial scale in June 2022, after three months of trials at Tomra headquarters in Germany.
The successful validations showed that the digital watermark technology can indeed achieve more granular sorting of packaging waste at scale, such as developing separate food and other new PCR streams that currently do not exist (e.g. for cosmetic or detergent applications).
Successful testing brings the Technical Readiness Level (TRL) from current TRL 6 – technology demonstrated in relevant environment towards TRL 7 – system prototype demonstration in operational environment and TRL 8 – system complete and qualified.
Phase 3 - Industrial Tests
The industrial test phase focussed on deploying the functional prototypes on large-scale in commercial sorting and recycling facilities under normal operating conditions. The aim is that brand owners and retailers will bring their enhanced products commercially to the market in three EU countries Denmark, France and Germany. Consumers bought these on-shelf products with digitally watermarked packaging, which after consumption entered the waste stream and ended up for sorting in different material recovery facilities that ran the industrial trials for different packaging material.
Partners for industrial tests included 1 MRF (Materials Recovery Facility), 1 PRF (Plastic Recovery Facility) and 2 recycling plants in France and Germany. These real-time test runs are to determine the systems reliability to ensure optimum sorting performance.
This last phase started in 2023, and finished in 2024. This consisted of a set of three trials on: Non-food PET bottles, Flexible PP and PE packaging, and 4 different types of Rigid packaging.
The successful completion of the industrial tests brought the technology to TRL 9 – actual system proven in operational environment.
A successful demonstration of the technical and economic viability of the technology would inspire more countries and waste management operators to implement this new sorting technology.
The R&D HolyGrail 2.0 Initiative was successfully concluded in March 2025. At the same time, the next stage was launched: HolyGrail 2030 - Circular Packaging, aimed at proving the economic viability of smart sorting and reprocessing into high-quality recyclates – that can be used again in packaging applications, including food packaging – for all packaging chain stakeholders.
Governance
Structure
The HolyGrail 2.0 initiative has a clear governance and membership structure based on the HolyGrail 2.0 Charter.
The overall management of the initiative lies with AIM – European Brands Association as project facilitator.
The technical work and coordination is overseen and managed by the Technical Project Management.
The main funding partner for the (semi-)industrial trials is the Alliance to End Plastic Waste. Furthermore, also the City of Copenhagen has provided funding and support for the semi-industrial testing phase in Copenhagen.
Partners
Within HolyGrail 2.0, we worked together with the following partners: two machine vendors Pellenc ST and Tomra as well as the digital watermarks technology supplier Digimarc.
Based on the learnings obtained from the initial HolyGrail 1.0 project under the auspices of the Ellen MacArthur Foundation, and following the launch of HolyGrail 2.0, we launched a Call for Proposals, among participating digital watermarks technology suppliers and machine vendors. This open and transparent process was designed to offer a level playing field to any potential supplier that had signalled an interest in being considered for a role as a direct partner for HolyGrail 2.0. Suppliers had the possibility to provide their plan and budget for participation in HolyGrail 2.0 Phase 1 (prototype development), Phase 2 (semi-industrial tests) and Phase 3 (industrial tests). As part of the Call for Proposals, the participating companies were all given equal opportunity to present their proposals to the HolyGrail 2.0 Leadership Team, followed by a Q&A session. Based on these proposals and presentations, the Leadership Team unanimously decided to work together with Pellenc ST and Tomra for the development of the detection units, in combination with Digimarc, as the technology provider.
Leadership Team
The elected HolyGrail 2.0 Leadership Team leads, coordinates and manages the activities of the initiative, ensuring effective use of membership fees and involvement of member companies. It overlooks the activities and decides on the set-up of technical work packages that are crucial for the progress of the project.
The Leadership Team - chaired by Procter & Gamble - consists of core members representing each of the sectors engaged in the initiative: brand manufacturers, retailers, material recovery facilities (MRFs), packaging converters, Extended Producer Responsibility (EPR) organisations, and recyclers.
Work Packages
All HolyGrail 2.0 members are encouraged to get involved in the different technical work packages (WPs) of the initiative to contribute with their expertise and knowledge.
The nine different work packages range from field testing and packaging focus groups, to the development of an information management system, the business development analysis and the integration of digital watermarks into existing packaging types.
Each work package is led by a member of the initiative as WP Leader. All technical work is overlooked and supported by the Technical Project Management.
Advisory Group
The Advisory Group is a panel for dialogue, exchange and input into both the operational implementation of key activities and the overall strategy of HolyGrail 2.0. The Advisory Group also provides advice to the Leadership Team, constituting the public policy complement to the cross value chain initiative.
The group is comprised of key stakeholders in the Circular Economy debate, including representatives from NGOs, media, European and national public agencies and other key stakeholders.
The group members are committed to contributing expertise, experience, insights and learnings to support the HolyGrail 2.0 initiative and to promoting the outcome and learnings from the initiative to a broader audience.
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