Closing the LOOP on pallet waste together

Innovation overview and development

May 2024 saw the official launch and roll out of The Pallet LOOP – a transformational, circular economy, pallet reuse scheme that’s actively eliminating avoidable pallet waste in the UK construction industry. Every year, around 20 million new timber pallets are manufactured to move building materials in the UK – the majority of which are skipped or scrapped after just one use. Providing a greener, leaner, safer, smarter alternative, The Pallet LOOP is shifting the sector from the current approach of ‘deliver, distribute, discard’ to a model based on the principles of ‘recover, repair, reuse’. After lobbying the industry to adopt its scheme for two and a half years, The Pallet LOOP launched its first reusable pallets into the sector in partnership with its first customer – British Gypsum, one of the largest users of pallets in the building materials supply chain. In May 2024, British Gypsum started to roll out LOOP’s standard construction pallet to its customers for the distribution of its bagged plaster products and accessories. In July, British Gypsum plasterboard also started to move on LOOP’s larger plasterboard pallet spec. Six months on, The Pallet LOOP and British Gypsum are delivering sustainable change across the construction sector – driving up the return of pallets for reuse; enabling the sector to tap into huge carbon, waste, timber and cost savings; and proving to others – through sustainable leadership – that there is a better way to move building materials.

How the innovation was developed, including effective collaboration, knowledge transfer and partnership along the project team
The Pallet LOOP’s approach to pallets might be new but the team has a long history in the sector dating back decades. The idea for The Pallet LOOP was conceived in 2019. Conscious that UK construction needed a new distribution model, the team’s first step was to get key industry players to publicly acknowledge there was a problem with pallets. The team created an industry charter – securing signatures from some of the biggest names in the sector, who agreed to consider a circular approach to pallets and ultimately drive a permanent shift in pallet behaviour. Working groups followed with trade bodies, material manufacturers, merchants, principal contractors and housebuilding companies.

Round the table, an equitable model was agreed that would deliver financial as well as environmental benefits at every step of the building materials supply chain. With key players backing the approach, The Pallet LOOP secured its first customer – British Gypsum, the UK’s leading manufacturer of high-performance drylining solution and one of the sector’s biggest pallet users. In May 2024, the first green-coloured reusable LOOP pallets left British Gypsum, loaded with bagged plaster. Now The Pallet LOOP and British Gypsum are focused on recovering those pallets for reuse via LOOP nationwide pallet collection infrastructure – encouraging returns with a financial incentive and through a concerted marketing and education campaign.

The use of new technologies, processes products or techniques or novel uses of existing ones
In the past, different companies – including British Gypsum – have tried to collect pallets back from customers but recovery rates have typically hovered around the 10% mark.

The reasons for this are multiple. Most pallets are cost engineered; designed to be skipped after just one trip. There are 2500+ pallet specifications in use in UK construction – making collections and reuse complex. Plus, there has been little incentive to change. The Pallet LOOP is different. Fixing the problem at source, with new pallet designs and a dedicated pallet collection service that picks up green and white pallets, The Pallet LOOP is:

• GREENER: Repurposing precious timber to support zero waste and carbon net zero goals
• LEANER: An efficient collection service that reduces site waste, cuts costs and rewards recycling
• SAFER: Standardised pallets engineered to last and proven to perform better in load and lift
• SMARTER: RFID tagged pallets to track recovery rates and create sustainability data.

For every green pallet that it collects, The Pallet LOOP will offer the returning company a PayBack of up to £4 – a number that will quickly stack up for the biggest names in the business. The Pallet LOOP’s use of RFID tags is also particularly innovative. Scanning pallets in and out of its sites provides accurate information about the number of pallets issued to customers and recovery rates. Scanning gives returning companies fascinating insights about the financial and carbon savings they are achieving by using LOOP, which they can plug into their sustainability reporting. It also paves the way for the industry to explore the creation of a smarter building materials supply chain, long-term.

The Pallet LOOP has a single mission. To close the loop on unnecessary pallet waste by:

• Providing a range of robust green-coloured pallets designed to be used again and again.
• Operating a nationwide pallet collection service that picks up pallets from distribution centres, merchant branches and building sites – incentivising returns with a financial PayBack of up to £4 for every green pallet put back in the LOOP.

This twin approach – delivered with the backing of LOOP’s first customer, British Gypsum – is helping to actively eliminate the problem posed by pallets in UK construction and is far more environmentally friendly than the current status quo. Every year, the construction sector manufactures ~20 million new timber pallets to move building materials. Currently, less than 10% of pallets in the sector are recovered for reuse. This is in stark contrast to the fast-moving consumer goods (FMCG) sector, which operates a closed loop pallet collection system that achieves up to 98% re-use. In the construction industry, the current lack of pallet re-use generates vast volumes of waste (>250,000 tonnes); wood that could be better used elsewhere. Estimates suggest more than 6,000 acres of forestry are harvested per annum to create pallets. This linear packaging model is outdated, unsustainable and needs to change as UK construction works to achieve Government carbon net zero and zero waste targets; and prepare for imminent changes to extended producer responsibility (EPR) regulations.

How does the innovation provide an improvement in social value
It’s early days but The Pallet LOOP and British Gypsum are already delivering real results. In six months, The Pallet LOOP has issued 450,000+ reusable pallets to British Gypsum and set up more than 6800 pallet collection points on its system. In terms of returns, the business achieved a pallet recovery rate of around 30% in October and November 2024 on its standard construction pallet – exceeding previous recovery rates. Returns of plasterboard pallets are heading in the same direction, increasing month-on-month.

Using recovery rates and data gleaned from its RFID tags and PowerBI system, The Pallet LOOP estimates that, since launch, it has:

• Saved the sector around 250 tonnes of carbon
• Diverted up to 2,500 tonnes of wood waste from skips
• Saved around 5,000 m3 of timber
• Saved companies returning pallets almost £1 million in skip costs*.

Crucially, through the financial incentive it offers, The Pallet LOOP has also paid back almost £180k to companies returning LOOP’s distinctive green pallets – money that can ultimately be used to fund social or environmental initiatives or boost the returning company’s bottom line.

How does this innovation influence future specifications to improve sustainability
What The Pallet LOOP has achieved with the backing of British Gypsum as its launch partner in a short space of time is impressive. More work is needed to drive up collections and normalise the recovery of pallets. However, all the signs are encouraging – proving the model is right and that the companies’ joint commitment to delivering a circular economy solution has paid off. Isover (also part of Saint Gobain alongside British Gypsum) is starting to transport its insulation products on LOOP pallets from December 2024. In addition, other manufacturers are being inspired by British Gypsum’s sustainable leadership and its decision to champion change and create a less wasteful way of working. The Pallet LOOP is now in advanced discussions with a number of other building material manufacturers that want to move their products on LOOP pallets.

By June 2025, The Pallet LOOP estimates it will have issued ~1.3 million green reusable LOOP pallets. If 80% of these pallets are returned, that would reduce wood waste by 20,000 tonnes, save 3,300 tonnes of carbon and repurpose 38,000 m3 of timber.

More broadly, and longer term, The Pallet LOOP provides a nationwide infrastructure that the construction sector could be used to recover other kinds of packaging assets. Together, The Pallet LOOP and British Gypsum have proved that when you collaborate and co-create with a sustainable vision in mind, and a relentless determination to succeed, the possibilities are endless. They’ve also proved that the future is circular when it comes to pallets. The future is LOOP.