Nordic Offset carried out a verification of the emission reduction potential as well as an ESG due diligence analysis for the Finnish Climate Fund

The Finnish Climate Fund is a state-owned special assignment company whose operations focus on combating climate change, accelerating the creation of low-carbon industry and promoting digitalisation. The Finnish Climate Fund finances climate targets of significant scale, where the company’s contribution enables the project to be carried out in general, on a larger scale or earlier than with other funding.

Paptic Oy is a Finnish company founded in 2015. It develops new technology for the manufacturing of recyclable flexible packaging material that replaces plastic. Packaging material produced with foam-based production technology is able to replace LDPE plastic, which is used, for example, in product, hygiene and food packaging. With the new technology, materials can be manufactured thinner and lighter than before, allowing more packaging to be produced with the same amount of raw materials. The funding will be used to accelerate the development and adoption of Paptic’s foam-based technology on an industrial scale.

Recyclable materials made of wood fibre from sustainably managed forests replace fossil-based plastic film in, for example, various flexible packaging. Plastics made from fossil-based crude oil have a significant carbon footprint and a serious environmental impact globally, as plastic waste often ends up in nature. The demand for plastics is estimated to double or even quadruple by 2050, which is why the development of alternative materials is important.

Nordic Offset carried out an emission reduction potential verification for the project as well as an ESG due diligence analysis on behalf of the Finnish Climate Fund to support the funding decision. The aim of Nordic Offset’s analysis was to assess whether the project involves significant sustainability and ESG risks and to validate the emission reduction potential related to the target company’s solution. In addition, Nordic Offset performed an EU taxonomy for the company as well as a DNSH (Do No Significant Harm) review.

Paptic’s emission-reduction potential is based on the emissions of packaging material produced with a foam-based technology in relation to the replaced fossil-based plastic. In addition to raw material, the emission reduction is caused by, for example, the use of renewable energy in the production of the material and the lower energy needs of the process. The solution’s estimated ten-year cumulative emission reduction potential if the customer’s business plans are successful is approximately 0.4 Mt CO2-eq. The impact will target mainly the emissions trading sector. If the emission reduction review were extended to include emissions from end-of-life combustion, the emission reduction potential would more than double.

Read more about the project on the Finnish Climate Fund’s website.

Do you want to talk about the emission reduction potential calculation or ESG analyses? Ask our experts for more information!