Ukrainian Releaf Paper receives €10M EU grant for biodegradable paper production facilities

23 Dec 2022 --- The European Commission’s (EC) EIC Accelerator 2022 program has selected Ukraine-based Releaf Paper as this year’s program winner. The EIC Accelerator program supports start-ups and innovative, high-risk small and medium-sized businesses that can contribute to rapid economic growth.

Releaf Paper submitted a pilot line project to the EC for the production of cellulose from the fibers of fallen leaves using a unique technology developed and patented by the company. The total cost of the submitted project is €3.5 million (US$3.7 million), of which the EC will finance €2.5 million (US$2.7 million) in the form of a grant.

In addition, the total amount of funding may exceed €10 million (US$10.6 million), as the EC has also agreed to invest in further scaling the project. According to the approved development plan, Releaf Paper will use the investment funds to establish two factories in different countries within the next five years.

Oleksandr Sobolenko, Releaf co-founder and business development director.Leaf paper advantages
Because of the war in Ukraine, Releaf Paper will use outsourcing factories to produce paper and paper bags, but the production works on demand. “We almost stopped selling Releaf products in the domestic market of Ukraine due to the war caused by the Russian invasion. Instead, we’ve started exporting to EU countries,” Oleksandr Sobolenko, Releaf co-founder and business development director, tells PackagingInsights.

The technology developed by co-founder Valentyn Frechka allows the processing of fallen leaves and other green waste into cellulose, which is the basis for creating paper and some types of packaging. This material is a direct replacement for primary cellulose, which is obtained from wood, but at the same time, it has several advantages.

First, leaf paper is fully recyclable and has a biodegradation period of only 60 days. Secondly, carbon dioxide emissions when using such raw materials are 78% lower. And third, Releaf Paper contributes to forest conservation by saving 17 trees for every metric ton of its paper produced.

“[The investment] will be used mostly for buying equipment and components of the pilot production line, also for hiring production staff, certification and marketing activities. The project’s main goal is to complete proof of concept and to start producing cellulose from leafy fiber,” says Sobolenko.

EU exports
The start-up launched test production in Ukraine in 2021, using the services of other factories. In September of the same year, pilot sales of several Releaf products began, which entailed wrapping paper and paper bags.

Among the very first clients of the start-up are L’Oréal, Samsung, Weleda and Schneider Electric. In the second half of 2022, the company began exporting its products to EU countries, despite the logistical and financial difficulties caused by the full-scale Russian invasion. However, the company says that Releaf Paper needed its own production.

“Each year, thousands of start-ups and representatives of small and medium-sized businesses from all EU countries apply for funding from the EIC Accelerator. Statistically, about 1 to 1.5% achieve success,” comments Sobolenko.Leaf paper is fully recyclable and has a biodegradation period of 60 days.

“The selection process lasted over seven months and included two rounds of validation and a final interview with five experts representing Western European venture capital. As a result, Releaf Paper beat out more than 6,500 competing companies and received the coveted funding. We can finally start building our pilot production line,” he continues.

“Revolutionizing” the paper industry
The first grant part of the project will start in April 2023 and is designed for two years. Currently, the founders are choosing a location for future production and starting to expand the team. The next two factories, in which investments from the EC will amount to at least €8 million (US$8.5 million), will potentially be located in Germany and Poland.

“We are closer than ever to the goal of starting a series of our own factories of the new generation, where the paper of the future, Releaf paper, will be created,” says Frechka.

“When at the end of this year everyone is talking about reducing carbon footprint, deforestation and stopping environmental catastrophe, we are taking real steps to revolutionize the paper industry,” he concludes.

By Natalie Schwertheim

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