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

• The loan supports the environmental upgrade of an existing integrated pulp and paper mill in Frövi, Sweden, including the replacement of an old recovery boiler built in 1969.
• The upgrades will reduce emissions, improve energy and resource efficiency and increase renewable energy generation at the mill.
• The bioproduct mill produces recyclable and compostable packaging materials from renewable sources for various uses, including stay-fresh food and beverage packaging to substitute for plastics.

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.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

Billerud is a world-leading company in superior paper and packaging materials made from virgin fibre. The company has ten production units in Sweden, the United States and Finland, with around 6 100 employees in over 13 countries and customers in over 100 countries. Frövi mill is an important regional employer, employing around 500 people.

Press contacts
EIB: Anna Charlotta Johansson, Media Relations Officer Sweden, EIB Group, [email protected], +46 70 356 30 32
Billerud press office, [email protected], +46 920 24 04 91