Unlocking the Potential of Agrifibres for Sustainable Packaging

Agrifibres offer a transformational solution for sustainable packaging,

reducing environmental impact while strengthening supply chain resilience

Sustainable Packaging

To be truly sustainable, packaging must be made from regenerative or recycled materials and be recyclable or compostable at the end of its use. Utilising agricultural fibres ("agrifibres")¹ such as wheat straw, sugarcane bagasse and hemp to produce sustainable packaging offers significant environmental and commercial advantages.

Consumers, businesses, and governments are increasingly taking action to accelerate the use of sustainable materials and manufacturing practices that minimize the ecological footprint of packaging throughout its lifecycle. For businesses, the appeal goes beyond environmental responsibility; switching to locally-sourced sustainable materials can lead to significant cost savings and strengthen supply chain resilience. This collective momentum is propelling the sustainable packaging market forward, with projections indicating a robust compound annual growth rate of 7.5%, reaching an impressive $448 billion by 2030.²

Growing Demand for Paper Packaging

A combination of regulatory and market factors are driving the growth in paper packaging, including the shift from plastic to paper, the growth of ecommerce and increased demand from the consumer goods health and wellness, and pharmaceutical sectors. At the same time, governments around the world have implemented stricter regulations on single-use plastics and businesses are aligning their packaging strategies with corporate sustainability goals aimed at reducing their carbon footprint and Scope 3 emissions.

Reducing single-use plastics is a positive step, but conventional paper packaging also creates significant environmental harm through deforestation and associated habitat destruction, CO2 emissions, waste, and pollution. Increasing the use of agrifibres as an alternative to tree-based pulp for paper packaging can meaningfully reduce these environmental impacts. Advances in the use of plant and algae-based materials for creating biodegradable films and moisture barriers have made it possible for agrifibres and other biomaterials to increasingly replace petroleum-based plastics and broaden the applications for paper packaging.

Ecological Impact of Paper Packaging

Over three billion trees are logged annually for paper packaging.³ While some of these trees come from sustainably managed plantation forests, around fifty percent are logged from ancient and endangered forests: the world’s most ecologically important forests due to their high levels of biodiversity and ability to store carbon.⁴ Peer reviewed studies have found that, on average, undisturbed primary forests contain 35% higher carbon stocks than logged forests,⁵ and have an estimated forty times higher sequestration potential per hectare over the next century.⁶

Rain forest under threat.

Sustainably managed forests play a key role in meeting demand for wood, paper and other fibre products. However, their size is not sufficient to meet total demand for pulp, which is why so much continues to be sourced from ancient and endangered forests. The supply of wood is also at risk due to the increased frequency and intensity of forest fires, which University of Maryland researchers estimate are burning “at least twice as much tree cover globally as they did two decades ago.”

According to the World Resources Institute, based on data from 2001 to 2023, “the area burned has increased by about 5.4% per year” and “forest fires now result in nearly six million more hectares of tree cover loss per year than they did in 2001 – an area roughly the size of Croatia.” ⁷

The Opportunity for Agrifibres

Substituting wood-based fibre with agrifibres preserves forest ecosystems and supports biodiversity by allowing trees to remain in their natural habitat. As illustrated in the graphic below, agrifibres have the advantage of being annual crops with an annual carbon cycle, which makes them more closely aligned with the short lifecycle of packaging. By contrast, the carbon cycle for wood covers decades, making it more appropriate for longer duration end-uses such as lumber used in construction.

Aligning Fibre Use With The Carbon Cycle

Agrifibres typically generate up to four times lower carbon emissions compared to virgin wood pulp, while also reducing water and energy use by up to 90%.⁸ These benefits position agrifibres as a superior low-carbon solution that aligns strongly with corporate decarbonisation objectives and regulatory climate targets. Using domestically produced agrifibre pulp also brings commercial benefits to businesses by enabling more robust supply chains with greater resilience to geopolitical risks, trade restrictions, and commodity price volatility.

Supportive Regulatory Environment

New regulations and policies to address packaging waste and encourage sustainable practices are driving significant changes in corporate behaviour. The EU has introduced several initiatives, including the Circular Economy Action Plan, EU Regulation 2025/04 on packaging waste, and the EU Deforestation Regulation. Other countries and multiple US states have enacted similar legislation. Importantly, the regulations shift responsibility for waste management from consumers to producers through a combination of financial penalties and incentives, compelling businesses to take action.

Market demand for pulp means that forest conservation efforts – including those funded via carbon credits – will not achieve their intended outcomes unless the volume of forest fibre set aside through conservation is replaced by an equivalent amount of non-wood based fibre. The EU has a target to protect 30% of its forests by 2030, and the UN has a target of protecting at least 30% of earth’s land and water by 2030. Yet, as the graphic below illustrates, continued market demand means that protecting one forest simply pushes demand for wood fibre to another forest. Agrifibres offer a solution to reduce this carbon “leakage” by providing an alternative to forest fibre, thereby supporting forest protection initiatives while making the carbon credit market more robust.

Fibre Substitution Enables Forest Protection

Agrifibre Availability

Agrifibre feedstocks are available in abundance across most geographies. In Europe, for example, over 400 million tons of 'agricultural residuals' are available from EU farms annually, which is more than sufficient to meet future demand.⁹ Access to these feedstocks is now being unlocked by the development of localised supply chains connecting farms to collection and aggregation networks that supply pulp mills and biorefineries, which then deliver cellulosic pulp to nearby packaging producers. Operating this type of regionally-focused industrial ecosystem strengthens corporate resilience, reduces transportation costs and mitigates Scope 3 emissions – key advantages in a world of increasing supply chain volatility. It also supports economic development in underserved regions through job creation and provides additional income to farmers from the “second harvest” of agricultural residuals.

Modern Processing Technologies And Lower Costs

Modern processing technologies for producing high-quality cellulosic pulp are now ready for industrial deployment. Historically, wood pulp has benefitted from economies of scale and a well-established industrial infrastructure and logistics network developed over more than a century. In contrast, agrifibres were viewed as a smaller niche with inconsistent fibre quality and technical issues, making them challenging to process through existing pulp and packaging production lines. Modern pulping and washing technologies have resolved the previous issues with agrifibre pulp quality and made it cost-competitive with wood-based pulp, due to lower raw material and energy costs. Additionally, fractionation technologies generate additional revenue from high-value co-products like lignin, hemicellulose, and other residual biomass, which have various potential applications including biopolymers and energy production.  

Now is the Time for Agrifibres

With regulatory, performance and cost factors now favouring agrifibres, it is an opportune time to accelerate the transition to more widespread adoption. The transition will require scaling production capacity through the development of regional agrifibre processing hubs that can integrate into existing packaging supply chains. By being early adopters of agrifibre-based packaging, businesses can gain positive brand recognition and capitalise on significant commercial advantages.

Unlocking the substantial potential of agrifibres for sustainable packaging is an environmental imperative that is good for business.

Ian McDonald

CIO, Aether Capital Partners

April 2025

NOTES

¹ Agrifibres include crop residuals left after the harvest (e.g., wheat straw, rice straw, sugarcane/sugar beet bagasse), as well as other plants such as hemp, miscanthus and reed.

² Grand View Research. (2024). Sustainable Packaging Market Size And Share Report, 2030.

³ https://canopyplanet.org/news/3-1-billion-trees-for-paper-packaging. Retrieved 10 April 2025.

⁴ Ancient forests are analogous to “primary” or 'original forests' that maintain their natural range of fauna and flora and ecosystem functions. Endangered forests encompasses both ancient forests that are at risk of degradation or deforestation and key areas that have high carbon and biodiversity value but which were logged and replanted with tree farms or plantations and need to be restored to protect endangered species or critically important ecological values such as soil carbon storage.

⁵ Mackey et al. (2020). Understanding the importance of primary tropical forest protection as a mitigation strategy, Mitigation and adaptation Strategies for Global Change. https://doi.org/10.1007/s11027-019-09891-4; Luyssaert et al.(2008). Old growth forests as global carbon sinks, Nature. https://doi.org/10.1038/nature07276.

⁶ Lewis et al.(2019). Restoring natural forests is the best way to remove atmospheric carbon, Nature. https://doi.org/10.1038/d41586-019-01026-8.

⁷ The Latest Data Confirms: Forest fires Are Getting Worse. Retrieved from https://www.wri.org/insights/global-trends-forest-fires April 2025.

⁸ Based on Canopy’s analysis of findings from recent life cycle analyses (LCAs) of a range of NextGen and wood pulps. See https://canopyplanet.org/news/next-gen-benefits-brief. LCA findings show that each tonne of Next Gen pulp substituted for virgin tree pulp avoids 4 tonnes of CO2 emissions, on average, when biogenic carbon, manufacturing, and landfilling are accounted for. 

⁹ JRC Science for Policy Report: Biomass production, supply, uses and flows in the European Union. 2023