The Swedish deeptech company has secured a Grant Agreement with the European Commission under the EU Innovation Fund, unlocking €40.3M of a €83M project to expand its Tibro facility to a 23,000-tonne capacity per year by 2030. The material, already NATO-approved, is being shipped to customers in construction, defense, electronics, and transport.
PaperShell produces a composite primarily made from kraft paper, using a bio-binder from agricultural waste. The material is stronger than plastics, lighter than aluminum, and more versatile than glass fiber composites. The pilot plant in Tibro, Sweden, operational since 2023, has delivered over 150,000 components. On Friday, PaperShell confirmed it signed a Grant Agreement with the European Commission via the EU Innovation Fund, securing up to €40.3 million in grant financing.
This funding is part of an €83 million project to expand PaperShell’s Tibro facilities into a full-scale flagship factory, serving as a prototype for future European sites. Construction is planned to start in 2027, with operations by 2030, expected to produce 23,000 tonnes annually and avoid about 2.6 million tonnes of CO₂ emissions over a decade.
PaperShell was chosen from 359 candidates in the Medium-Scale category of the Net Zero Technologies call managed by CINEA. The company was informed in November 2025 about the Grant Agreement preparation, needing to demonstrate co-financing for the remaining €43 million.
The material reduces CO₂ emissions by up to 98% compared to aluminum, glass fiber composites, or plastics, with potential for carbon-negative performance in closed systems. The Tibro factory will have multiple automated production lines, including one for copper-clad laminates and printed circuit boards, crucial due to Europe’s dependency on Asian PCB supply chains. Current applications include construction façade panels, transport parts, defense components, and consumer electronics.
Anders Breitholtz, founder of PaperShell and a former technology scout, described the grant as pivotal for the company and European industrial decarbonization. The pilot plant has been active since 2023, and a fully subscribed funding round closed in December 2025 to support the co-financing requirement. The new Tibro factory is designed as a modular template, intended for reproduction across Europe.