PaperShell raises up to €40.3 million for new Swedish factory
Swedish climate-tech startup PaperShell has secured funding of up to €40.3 million to build a new production facility in Tibro, Sweden. The company develops a patented bio-based material that it claims delivers 99.4% lower CO₂ emissions compared with conventional materials such as plastics and certain composites used in consumer products and industrial applications.
Bio-based alternative targeting hard-to-abate materials
PaperShell manufactures a high-performance material made primarily from wood fibers sourced from sustainably managed forests. The process is designed to replace fossil-based plastics and carbon-intensive composites in components for sectors including mobility, furniture, electronics and outdoor equipment.
According to the company, its proprietary process enables products that are lightweight, durable and weather-resistant, while keeping the carbon footprint dramatically below that of traditional polymers. At end of life, components can be recycled or used as a renewable energy source, supporting a more circular economy.
New Tibro plant to scale industrial production
The new Tibro facility will allow PaperShell to move from pilot and small-batch production to full industrial scale. The investment package – combining equity, loans and public support – is expected to fund advanced manufacturing lines, automation systems and quality-control labs.
Once fully operational, the plant is projected to supply millions of components per year to European and global customers. The site will also host an R&D hub focused on improving material performance, expanding color and surface options, and optimizing life-cycle assessment (LCA) metrics.
Decarbonisation pressure reshapes materials industry
Manufacturers across Europe are under intensifying pressure from climate regulation, corporate net-zero targets and consumer demand for sustainable products. Materials used in casings, panels and structural elements are a significant contributor to embedded emissions in everything from cars to consumer electronics.
By offering a drop-in alternative with radically lower CO₂ emissions, PaperShell aims to position itself as a strategic partner for brands seeking to decarbonise their supply chains without sacrificing performance or design flexibility. The Tibro investment signals growing confidence that bio-based, high-tech materials can compete at scale with long-dominant fossil-based options.