The World Economic Forum, nonprofit Canopy, and partners announced a US$2 billion blended finance initiative at Davos in January 2026 to expand low-carbon pulp alternatives within global paper, packaging, and textile supply chains. The program will launch in India, targeting approximately 1.5 million metric tons of next-generation pulp capacity derived from agricultural residues, not conventional wood fiber. This effort aims to decrease deforestation and carbon emissions while strengthening supply-chain resilience. The financial structure is intended to attract co-investment and facilitate replication in other regions.1World Economic Forum 2026: Collaboration launches US$2B next-gen packaging initiative
Background
Conventional paper and packaging production relies heavily on wood pulp, leading to the annual logging of about 3.1 billion trees and heightening ecosystem and climate risks. Agricultural residues such as wheat straw and sugarcane bagasse are often burned, contributing to air pollution and methane emissions. Canopy's initiative intends to shift the industry from forest-based to lower-impact feedstocks. This transition could offer new income streams for farmers and reduce seasonal burning that worsens air quality, particularly in areas like Delhi.1World Economic Forum 2026: Collaboration launches US$2B next-gen packaging initiative
Details
The US$2 billion program will support new and retrofit pulp mills in India, enabling up to 1.5 million tonnes of next-generation pulp. Canopy estimates that around 60 million tonnes of global pulp currently come from high-carbon, biodiversity-sensitive forests. Using agricultural residues may reduce Scope 3 emissions for brand customers and lessen land-use, water, and energy impacts compared to forest-sourced pulp.1World Economic Forum 2026: Collaboration launches US$2B next-gen packaging initiative
Canopy strategic lead Valerie Langer stated that the blended finance model is designed to de-risk initial investments and facilitate more than 10 million tonnes of capacity within ten years. She highlighted benefits including supply-chain diversification for greater resilience, particularly in the context of increasing forest fires, and expanded rural income by monetizing residues otherwise burned.1World Economic Forum 2026: Collaboration launches US$2B next-gen packaging initiative
The program also aims to attract institutional capital by aligning market demand, securing offtake agreements, and deploying catalytic anchor capital. Partners such as Tsao Pao Chee Group and No. 17 Foundation are contributing to the finance architecture. The model supports the broader goal of building global infrastructure for next-generation materials valued at US$78 billion by 2033.2Davos 2026 sees $2 billion investment model to decarbonize supply chains | Article | Packaging Europe
Outlook
Within 24 months, the initial round of funding is expected to establish feedstock systems and processing capacity in India. If successful, this model will be extended to other markets, advancing decarbonization in the paper, packaging, and textile sectors.1World Economic Forum 2026: Collaboration launches US$2B next-gen packaging initiative
