The Digital Watermarks Initiative HolyGrail 2.0 – facilitated by AIM, the European Brands Association, as the next iteration of the initial HolyGrail project under the Ellen MacArthur Foundation (2016-2019) – is a pilot project with the objective to prove the viability of digital watermarking technologies for accurate sorting and consequently higher-quality recycling, as well as 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 standard 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. Under the auspices of AIM, the European Brands Association, more than 85 companies and organisations from the complete packaging value chain have joined forces 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, to drive a truly circular economy.