PaperShell, a Tibro-based material company behind a new fossil-free composite material designed to replace aluminium, plastics and glass fibre at industrial scale, has secured up to €40.3 million in financing to expand industrial production through a new flagship factory.
The funding comes in the form of a Grant Agreement with the European Commission under the EU Innovation Fund – with the factory representing the first full-scale implementation their production system.
Anders Breitholtz, founder and CEO of PaperShell, comments: “Europe is entering a new industrial phase where resilience and decarbonisation go hand in hand. PaperShell is already producing fossil-free materials at industrial scale, and with this expansion we can meet growing demand from sectors like construction and defence. The factory in Tibro is not just increased capacity – it is proof that a new industrial production system is ready to scale.”
In EU-Startups’ 2025–2026 coverage of advanced materials and adjacent industrial decarbonisation, PaperShell’s financing stands out as one of the larger disclosed sums alongside Fiberdom in Vantaa, which secured €3.5 million to scale its plastic-free wood-fibre material, Cellugy in Søborg, which raised €8.1 million to scale a cellulose-based alternative to microplastics in personal care, Aisti in Jyväskylä, which secured a €20 million EIB loan to expand bio-based acoustic tile production, Adsorbi in Gothenburg, which raised €1 million to build and operate a pilot plant for its cellulose-based air-purification material, and Seprify in Fribourg, which raised €13.4 million to develop cellulose-based industrial ingredients.
Together, these rounds account for around €46 million in funding, and adding PaperShell brings the combined total to roughly €86 million, indicating continued investor and public-sector backing for companies replacing fossil-based materials with bio-based industrial alternatives.
Founded in 2021, Papershell rebuilds paper into load bearing wood “sheet metal”, which is reportedly stronger than plastics, as versatile as fiber composites and lighter than aluminium.
According to the company, their material is 100% biogenic and fossil carbon free (climate positive if circulated), reducing C02 by 99.4% and designed for material substitutions – from flat 2D to medium complex 3D components.
The material is NATO approved and is already being used across sectors including construction, electronics, defence and transport. PaperShell’s existing pilot factory in Tibro, in operation since 2023, has three production lines and has produced more than 150,000 components to date.
Construction of the new facility is expected to start in 2027, with entry into full operation in 2030. At full ramp-up, the facility is expected to reach an installed production capacity of approximately 23,000 tonnes per year. Over its first ten years of operation, the project is expected to avoid approximately 2.6 million tonnes of CO₂ emissions.
Read the orginal article: https://www.eu-startups.com/2026/03/with-99-4-lower-co%E2%82%82-than-conventional-materials-papershell-wins-up-to-e40-3-million-for-new-tibro-factory/
