STORA ENSO - RENEWABLE PACKAGING CONVERSION

The project will finance investments to convert an idle paper machine from coated fine-paper to consumer board products to improve circularity and support plastic substitution. Additionally, this will support the promoter's growth strategy in renewable packaging by providing new volume for growing packaging segments. The investment is fully aligned with the promoter's sustainability commitments and its strategic shift towards sustainable and renewable packaging solutions. This is the second phase of a large mill conversion into renewable packaging production, which will also significantly improve the carbon footprint of the company.

The modernisation of the mill will reduce its environmental footprint by installing highly efficient process technology in line with Best Available Techniques (BAT). It will support circularity by further enhancing the recycling performance of the Packaging Materials division's product portfolio. The site's total scope 1 and 2 greenhouse gas emissions will remain at a low level (as they were already reduced by 80% during the first conversion in 2021).

The project reduces negative process externalities in producing renewable packaging solutions that require high hygiene standards and, therefore, substitute for plastics in packaging. The project addresses suboptimal investment situations by strengthening supply for, and competitiveness of sustainable, recyclable and renewable packaging applications against traditional mainstream plastics packaging generating negative environmental and carbon externalities. Thereby, the project contributes to the EU Green Deal and is aligned with the Bank's climate action and environmental sustainability objectives, the EU Bioeconomy strategy, EU Packaging and Packaging Waste directive as well as the EU Circular Economy Action Plan.

The proposed loan will diversify Stora Enso's financing sources and extend the debt maturity profile, which will improve the overall financing position of the company. The EIB loan's long tenor is highly valuable to the company in financing assets with long economic lifetimes. The EIB loan supporting renewable packaging investments will also complement Stora Enso's other green and sustainable finance instruments.

The project is aligned with the EU Green Deal, the EU Bioeconomy and Plastics strategies, and the EU Circular Economy Action Plan. The investment will deliver effective and sustainable solutions for combatting global problems such as plastic waste by substituting fossil-based materials with renewable, recyclable and compostable materials in packaging and consumer goods manufacturing. The project falls under the scope of Annex I of the environmental impact assessment (EIA) Directive 2014/52/EU (amending 2011/92/EU Directive), as well as of the Industrial Emissions Directive (IED) 2010/75/EU. An EIA for the new packing board line is publicly available and an environmental permit change application for the capacity increase is currently underway. A complete assessment of the permitting processes will be done at appraisal.

Although the promoter is a private company not operating in the utilities sector, and is thus not covered by EU directives on procurement, the EIB will require the promoter to ensure that any procurement procedures are done in accordance with the relevant applicable EU procurement rules.