SCA RENEWABLE PACKAGING

Promoter – Financial Intermediary

SVENSKA CELLULOSA AB SCA (PUBL)

Location

• Sweden

Description

The project concerns the upgrading and modernisation of the recycled and renewable packaging boards production capacity, including environmental protection measures, at the Promoter's existing integrated pulp and paper mill in Obbola, Sweden.

Additionality and Impact

This is a bio-economy project implemented in a rural area in Northern Sweden, in support of local economy and aiming to upgrade, modernize and further enhance the production of recyclable and renewable packaging boards of an integrated pulp and paper mill. 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 and Plastics strategies and EU Circular Economy Package. Through its Industry 4.0 advanced manufacturing characteristics, the project contributes to EU innovation and transformative industrial policies, including EU Digital Strategy. The project addresses two main Market Failures. First, the incomplete market that triggers suboptimal investment situation in the packaging industry by enabling sustainable, recyclable and renewable packaging production, which is not yet competitive with the mainstream fossil-based (i.e. plastics) packaging solutions. Second, the provision of public goods through development of knowledge and innovation for the industry, by implementation of state-of-the-art technology leading to EU digital transformation and setting new industry standards for the next decade. In addition, the project will reduce greenhouse gas emissions, through enhanced renewable energy production capacity, thereby decreasing the effects of negative externalities of the packaging industry. The Bank's contribution to the project is supported by a combination of its additionality profile, flexible drawdown terms as well as helping to crowd-in other financiers, thereby facilitating the projects financing and full implementation.

Objectives

The project supports Obbola mill's further expansion into the production of kraftliner boards for renewable packaging using recycled pulp, and is consistent with the Promoter's overall strategic focus on sustainable and renewable packaging solutions. The modernisation of the pulp mill will lead to reducing the overall environmental footprint through the installation of highly efficient processing technology in line with Best Available Techniques (BAT), as well as the reduction of fossil fuel use.

Sector(s)

• Industry - Manufacturing

Proposed EIB finance (Approximate amount)

EUR 300 million

Total cost (Approximate amount)

EUR 732 million

Environmental aspects

The project is aligned with the EU Green Deal, Climate Action objectives, the EU Bioeconomy and Plastics strategies, and the EU Circular Economy Package. The investment will deliver effective and sustainable solutions for combatting global problems such as plastic waste by substituting fossil-based materials (e.g. plastics) with recycled, renewable, recyclable and compostable materials in packaging and consumer goods manufacturing. The project falls under the scope of Annex I of the EIA Directive 2014/52/EU, amending the EIA Directive 2011/92 and is subject to a full environmental impact assessment (EIA) process including public consultations. As a result of the project implementation, the mill will (i) reach almost 100% reliance on internally generated renewable energy, (ii) reduce substantially the use of fossil fuel, as well as (iii) increase the production of renewable and recyclable packaging materials to replace fossil-based ones.

Procurement

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

Status

Signed - 1/10/2021