Swedish eco-friendly packaging company PulPac has received a €20m ($23.5m) loan from the European Investment Bank (EIB) to bolster its fight against plastic waste.

The Gothenburg-headquartered company will channel the funds into advancing and marketing its proprietary Dry Molded Fiber (DMF) technology, crafted as a substitute for disposable plastics.

This method, which employs sustainable cellulose fibre to create sturdy packaging, is touted as a major leap forward compared to conventional wet moulding, delivering quicker production and a smaller ecological impact.

PulPac aims to focus on the food and retail sectors, producing items such as coffee cup tops, dishes, utensils, containers, clothing hangers, and medical packaging.

PulPac chair Niclas Möller said: “We are honoured by the EIB’s backing and its recognition of Dry Molded Fiber as a core part of the shift towards sustainable packaging.

“This partnership is both a financial milestone and a strong validation of our strategy to build a global licensing platform for fibre-based alternatives to plastic.”

The funding, arranged as a venture debt loan, is being facilitated through the InvestEU initiative.

This support aligns with the EU’s wider mission to reduce plastic pollution, including a prohibition on ten single-use plastic products such as dishes, utensils, straws, and cotton swabs.

EIB vice-president Thomas Östros said: “By supporting PulPac, we are backing an innovative and scalable solution that can make a real difference in the global effort to reduce plastic waste and accelerate the green transition.

“This financing underlines the EU’s commitment to supporting next-generation technologies with global potential.”

In May this year, SIG InnoVentures and Optima announced that they would be part of PulPac’s shareholder group through a strategic investment.