The UK central bank said on Thursday that after "careful and serious consideration and extensive public consultation" it had decided to stick with the status quo. The alternative of using palm oil to make the notes "raised questions about environmental sustainability", according to the BoE.
Citing Treasury advice, it said switching to palm oil would cost about £16.5m over 10 years and not "achieve value for money for taxpayers".
Britain's new polymer banknotes were launched in September with much fanfare about their durability and anti-counterfeiting qualities. Mark Carney, BoE governor, dipped one of the new £5 notes in chicken curry to show how much better they were than their paper predecessors.
But revelations in November that the notes contain traces of tallow, an animal fat, led to a petition from campaigners who wanted the BoE to change the ingredients.
Tried palm oil
The BoE received 3,544 responses to its consultation, 88 per cent of whom were against the use of animal fats and 48 per cent were against palm oil. Nonetheless, the Bank said it "had to balance these responses against its other public duties and priorities as well as the other evidence gathered over the past months".
It went as far as asking suppliers CCL and De La Rue to try to manufacture bank notes with palm oil - tests that concluded in June. The trials were "technically successful" but highlighted "the supply chain challenges in sourcing palm oil-derived additives and the complexity of maintaining a segregated production process".
Opponents of palm oil, one of the world's most widely used vegetable oils, say it contributes to deforestation of rainforests in key production areas.
"The Bank fully recognises the concerns raised by members of the public, both before and during the consultation, and has not taken this decision lightly," it said in a statement.
"The Bank also understands that the decision it has reached may not address the concerns of all parties, but in making this decision, the Bank has considered very carefully the relevant factors and taken into consideration all of its objectives, including its responsibility to maintain confidence in the currency through the issuance of high quality, secure banknotes and achieve value for money for taxpayers."
Copyright The Financial Times Limited 2017