The changes will be made following a £7.8m (€10.5m) investment at the company's Iggesunds Bruk facility, where it produces Invercote board.
The company produces energy using heat generated at the plant as well as biofuel sources. The excess heat is also used to dry timber at a nearby sawmill and to heat local homes.
Iggesunds Bruk energy co-ordinator Klas Simes said the company could be self-sufficient in electricity and independent of fossil fuels in the "near future".
"The huge rises in energy costs in recent years have focused attention on this area. We've worked hard to achieve an intelligent solution that ensures our competitiveness – and the reduction of carbon dioxide emission is just one result of that," he said.
The Swedish-based company has increased the price of its products over the past year, blaming the rising costs of raw materials and energy.
The cost of the firm's folding box board brand Incada will increase by between 6% and 8% in March 2008.
Iggesunds Bruk goes green with 7.8m investment
Board producer Iggesund Paperboard is to reduce its use of fossil fuels by three-quarters, resulting in a reduction in annual emissions equal to driving an average car 300 million km.
