Paper-based flexible packaging is attracting growing interest from global brands and investors, but technical, economic and infrastructure barriers continue to limit its commercial deployment.
The Ellen MacArthur Foundation estimates that approximately 25,000 pieces of flexible plastic packaging, including sachets, wrappers and pouches, enter the world’s oceans every second. Without further action, an additional 20 trillion items could accumulate by 2040. These small formats remain particularly difficult and costly to collect and recycle in many of the markets where they are widely used
A report published by the Foundation earlier in 2026 examined how paper-based alternatives could help address the problem when eliminating the packaging format is not feasible. Endorsed by 48 companies, nongovernmental organizations, investors and academics, it established six criteria for a responsible transition.
Paper-based flexible packaging should use responsibly sourced fibres, minimize impacts from production, meet product-performance requirements, be compatible with local collection and recycling systems, use chemicals that do not create persistent pollution, and support circular-economy outcomes.
The Foundation cautions that replacing plastic with paper without meeting these conditions could shift environmental pressures to forests and water resources. Coatings, adhesives and inks could also create persistent pollution or interfere with recycling and biodegradation. Packaging satisfying all six criteria is not yet available at commercial scale for most applications.
Several consumer-goods companies are nevertheless moving from research toward deployment. Unilever has evaluated approximately 3,000 packaging technologies over five years and plans to deploy paper-based flexible packaging at commercial scale by the end of 2028. The company has incorporated an associated target into its Sustainability Progress Index, linking progress to executive compensation.
Specialist investment is also moving into the sector. Circulate Capital raised US$220 million at the first close of its second Asia-focused fund in 2026. The fund targets circular supply chains across South and Southeast Asia, with alternative paper-based packaging solutions included among its investment priorities.
Performance and end-of-life challenges
Paper alone rarely provides the moisture, grease and oxygen barriers required for demanding products. Manufacturers typically add coatings, barrier layers, adhesives and inks to protect products and extend shelf life. The central challenge is achieving that performance without compromising recyclability or biodegradability.
Development efforts include biopolymer coatings, paper surface treatments and thinner barrier layers. Atomic Layer Deposition is being investigated as a way to apply ultra-thin functional barriers while reducing the amount of coating material required. The Foundation also points to agricultural residues and other non-wood fibres as potential feedstocks that could reduce land-use and biodiversity impacts.
Open-innovation programs are supporting these efforts. Kraft Heinz’s 2025 packaging challenge selected Kalpana Systems for its spatial Atomic Layer Deposition technology, while Amcor has sought start-ups developing compostable adhesives and high-performance coatings.
Cost remains another major obstacle. According to the Foundation, home-compostable paper-based flexible packaging can currently cost between two and six times more than comparable plastic formats. Existing filling lines may also operate more slowly when processing paper-based materials.
Closing these gaps will require greater production volumes, packaging-line adjustments and collaboration among brands, suppliers, recyclers, investors and policymakers. Collection and recycling infrastructure will also need to develop alongside material innovation.
The Ellen MacArthur Foundation is an international nonprofit organization that works with businesses, governments and researchers to advance the transition to a circular economy.
