At the World Economic Forum in Davos on January 21, 2026, environmental non-profit Canopy introduced a landmark $2 billion blended finance platform designed to transform India into a global hub for ‘Next Gen’ low-carbon materials. This strategic investment marks the first phase of a massive $78 billion global infrastructure transition aimed at eliminating forest-derived fibers from fashion supply chains by 2033. By leveraging India’s vast agricultural residues and textile waste, the initiative seeks to replace high-carbon wood pulp with circular alternatives, a move critical for brands navigating increasingly stringent global deforestation regulations.
Scaling circular capacity amid regulatory pressure
The blueprint targets the production of 1.5 million tons of next-generation paper, packaging, and man-made cellulosic fibers (MMCF) like viscose and rayon. This shift is no longer merely elective; with the EU Deforestation Regulation (EUDR) and similar norms in the US and UK tightening, Indian exporters face significant market-access risks if they remain tethered to traditional wood-pulp sources. Companies staying locked into business-as-usual wood sourcing are signing up for higher costs and supply vulnerability, states Nicole Rycroft, Executive Director, Canopy. The platform utilizes a blended finance model to de-risk early-stage facilities, pooling capital from philanthropies and private investors to catalyze commercial-scale production.
Socio-economic gains and industrial de-risking
Beyond decarbonization, the investment addresses critical localized challenges, such as the seasonal air pollution in Delhi caused by crop stubble burning. By diverting 100 million tons of agricultural waste into industrial feedstocks, the project aims to improve air quality while creating new income streams for rural communities. Currently, India produces roughly 8 million tons of textile waste annually, most of which remains underutilized. Zoe Caron, Strategic Lead-Global Investments, Canopy, noted, these targeted financial structures turn waste into high-value commodities, effectively future-proofing India’s $165 billion textile sector against the volatility of the global timber market.
Canopy is a global environmental non-profit dedicated to protecting the world’s forests by shifting supply chains toward sustainable alternatives. Working with over 950 global brands representing $2.1 trillion in revenue, the organization focuses on scaling ‘Next Gen’ solutions made from waste. Their current strategy involves mobilizing $78 billion by 2033 to modernize global textile and packaging infrastructure, with a primary growth focus on India’s circular economy.
