The Swedish deeptech company has signed a Grant Agreement with the European Commission under the EU Innovation Fund, unlocking €40.3M of a €83M project to expand its Tibro plant to 23,000 tonnes per year capacity by 2030.
The material is already NATO-approved and shipping to customers in construction, defence, electronics and transport.
PaperShell makes a composite that looks and sounds improbable on paper, which is apt, because it is essentially made of it.
The Swedish company presses layers of kraft paper, impregnated with a bio-binder derived from agricultural waste streams, into load-bearing components that the company says are stronger than plastics, lighter than aluminium, and more versatile than glass fibre composites.
Its pilot plant in Tibro, Sweden, has been running since 2023 and has shipped more than 150,000 components. The material is NATO-approved and is already in use across construction, electronics, defence, and transport.
On Friday the company announced it has signed a Grant Agreement with the European Commission under the EU Innovation Fund, securing up to €40.3 million in grant financing.
The grant is part of a €83 million total project to expand PaperShell’s existing Tibro facilities into a new full-scale flagship factory, the first complete implementation of a production system the company intends to replicate across Europe.
Construction is expected to begin in 2027, with full operations targeted by 2030. At that point, the facility is projected to reach 23,000 tonnes of annual production capacity and, over its first decade, to avoid approximately 2.6 million tonnes of CO₂ emissions.
The EU Innovation Fund, financed through revenues from the EU Emissions Trading System, is one of the world’s largest climate-innovation programmes, and PaperShell was selected from among 359 applicants in the Medium-Scale category of the Net Zero Technologies call administered by CINEA.
The company was first notified in November 2025 that it had been invited to prepare a Grant Agreement, a step that required it to demonstrate co-financing for the remaining €43 million of the €83 million project cost.
The material’s composition gives it a range of properties that are commercially attractive in the current European industrial context.
Replacing aluminium, glass fibre composites, or plastics with PaperShell’s material reduces CO₂ equivalent emissions by up to 98%, the company reports, with the potential for carbon-negative performance in closed-loop systems.
The factory in Tibro will host multiple automated production lines across a 15,600 square metre site, with one dedicated to copper-clad laminates and printed circuit boards, a strategic materials category given Europe’s reliance on Asian PCB supply chains.
Sectors currently using PaperShell material include construction façade panels, transport components, defence components, and consumer electronics.
Anders Breitholtz, who founded PaperShell after more than twenty years as a technology scout specialising in materials and manufacturing, has previously described the grant as a defining moment for the company and for European industrial decarbonisation more broadly.
The company’s pilot plant has been operating since 2023, and a fully oversubscribed funding round closed in December 2025 to support the co-financing requirement.
The new flagship factory in Tibro is explicitly designed as a template: the production system is modular and intended to be reproduced at other sites across Europe once the model has been proven at scale.
