Sweden: EIB signs SEK 1.3 billion loan agreement with Billerud for bioproduct mill upgrade

The European Investment Bank (EIB) has signed a SEK 1.3 billion (approximately €110 million) loan agreement with Swedish company Billerud, a world-leading paper and packaging materials supplier. The loan supports investments in the modernisation and upgrade of a bioproduct mill, including the replacement of a recovery boiler. The upgrades are well anchored in Billerud’s sustainability strategy and will secure high environmental performance for the mill, with increased energy and resource efficiency.

Materials made at Frövi mill are used in various packaging applications, with a particular focus on food and beverage packaging — an area that has strict requirements in terms of durability and hygiene standards. Fibre-based packaging has the advantage of being fossil-free, recyclable, and biodegradable — features that set it apart from fossil-based types of packaging. Materials produced by Billerud can be recycled many times and made into recycled board, before finally being used for energy production.

Due to the increasing urbanisation trend, there is growing demand for stay-fresh food and beverage packaging. Proper packaging serves many important health and safety functions including protection, ensuring a long shelf life, and preventing food waste. Food waste is increasingly on the European Union’s agenda, as was responsible for some 7% of the bloc’s greenhouse gas emissions in 2022, exceeding emissions from the aviation sector. Moreover, over 80% of paper and cardboard packaging waste in the European Union is recycled, a recycling rate that is more than double that for plastic packaging.

As by-products, the mill produces valuable tall-oil and turpentine and generates renewable energy, the surplus of which will be sold to local communities and neighbouring businesses. There is a vegetable growing project being built next to the Frövi mill that will use the residual heat produced by the facility.

“The renewal and modernisation of production processes and industrial facilities are key to achieving EU climate targets and securing the sustainability and competitiveness of EU manufacturing,” said EIB Vice-President Thomas Östros. “This project improves the energy and resource efficiency of the mill and contributes to the shift from fossil-based packaging material, such as plastic, to packaging made of renewable resources. As the EU climate bank, the EIB plays an important role in supporting companies that pioneer new and effective solutions for recyclable materials and resource-efficient manufacturing.”

“The new recovery boiler will allow Billerud to implement energy improvement measures to meet future environmental requirements and ensure stable availability of pulp production. This is a long-term investment in efficient, sustainable, and safe production, which increases our competitiveness and benefits our customers. We are pleased to see the EIB’s support for this project,” said Billerud acting President and CEO Ivar Vatne.

The project is aligned with the EIB Climate Bank Roadmap and supports low-carbon technology and products and energy and resource efficiency. It also supports the European Green Deal with its climate action objectives, as well as the environmental targets embedded in the EU bioeconomy and plastics strategies, and the EU zero pollution action plan.