Papastratos, PMI’s affiliate Greece, located in Aspropyrgos, is a flagship site for climate action and energy transformation. Once a traditional cigarette manufacturing site, the facility has evolved into a modern operation focused entirely on producing heated tobacco products, supported by a workforce of approximately 1,500 employees and 350 contractors.
Over recent years, Papastratos has implemented a series of initiatives aimed at reducing its environmental footprint, including significant investments in energy efficiency, renewable electricity, and advanced technologies—positioning itself at the forefront of decarbonization efforts in the industry.
These efforts are guided by PMI’s Climate Transition Plan, which supports affiliates such as Papastratos in deploying targeted solutions that reduce emissions, improve energy performance, switch to renewable options where possible, and compensate when necessary.
The plan is anchored in two strategic programs: Drive 4 Zero (D40) and Zero Carbon Tech (ZCT). As detailed in PMI’s Integrated Report 2024, D40 and ZCT are modernizing infrastructure across PMI’s footprint, improving energy performance and reducing emissions.
D40 provides the operational framework for emissions reduction across manufacturing and logistics, while ZCT deploys advanced technologies to enhance energy efficiency and accelerate the shift to renewable energy.
As part of this transformation, Papastratos is investing close to USD 10 million in upgrading its energy systems, thermal process optimization, and smart load management.
Decarbonizing manufacturing at Aspropyrgos: From fossil fuels to future-ready
Papastratos has implemented a multi-phase decarbonization strategy—encompassing both the factory and the market building on site—starting with operational efficiency improvements and progressing to advanced technology investments. Aligned with PMI’s decarbonization strategy, it is built around two main pillars: Reduce, and switch.
1. Reduce
The Drive for Zero (D40) initiative began in 2018, focusing on reducing energy waste and improving operational efficiency within the factory. The primary area that handles tobacco processing (milling, mixing, dehydration via steam on a long conveyor belt) is the factory’s largest consumer of energy, accounting for approximately 60–65 percent of total factory energy use. The secondary area covers packaging, TEREA sticks, and filter production.
Energy efficiency measures focused on the primary processing zone include:
- Real-time energy monitoring to identify inefficiencies and optimize consumption.
- Insulation and piping upgrades to minimize heat loss and energy waste, ensuring systems operate more efficiently.
- Steam system enhancements, such as installing better valves and control systems, to reduce excess energy loss.
- Process optimization in the primary area, including adjusted set points on the tobacco processing conveyor belt to lower targeted temperatures while maintaining product quality.
- Recipe adjustments for cast leaf tobacco production to reduce energy needs without compromising quality.
These improvements aim to minimize emissions while promoting energy-conscious habits across daily operations, making sustainability a regular part of the workplace through thoughtful investments.
2. Switch
The ZCT program is a major PMI initiative focused on reducing the factory’s energy footprint through advanced technology investments. In Aspropyrgos, the program began with a comprehensive energy profile study of the factory, which took about six months to complete. The total investment for the program is approximately 10 million USD.
Three main technologies were selected to promote the transition from fossil fuels:
- Photovoltaic (PV) panels have been installed across the factory’s rooftops covering 10,600 m² to supply a portion of its electricity needs, taking advantage of Greece’s considerable solar capacity. While these panels reduce electricity costs, they do not affect carbon emissions because purchased electricity is already certified as green. Projected savings are approximately EUR 12,700 per week, with an annual target of EUR 660,000, accounting for 7 percent of the site’s electricity use. A total of 2.4 MW has now been installed.
- Advanced heat pumps will also be installed, designed to capture and transfer heat from the environment, reducing reliance on natural gas boilers. By shifting energy use from natural gas to green or self-generated electricity, these systems are expected to reduce carbon emissions by 14-17.5 percent, while also reducing costs.
- Electrical boilers are planned to replace conventional natural gas boilers to further reduce natural gas consumption and the associated carbon emissions by utilizing renewable electricity. These systems are expected to reduce carbon emissions by 6-7.5 percent.
Heat pumps and electrical boilers are currently scheduled to be completed by the end of 2027. The combined effect of these technologies is expected to reduce the factory’s carbon emissions by approximately 20-25 percent annually compared to its 2023 baseline. The total productivity gain calculated for the two projects is estimated at EUR 2 million per year.
These technologies are central to Papastratos’ efforts to decarbonize operations at the Aspropyrgos factory, directly supporting PMI’s objectives to lower scope 1+2 emissions and build long-term energy resilience.
Image: Papastratos factory
Scaling impact beyond the factory
Papastratos’ transformation is not happening in isolation—it is one of several PMI factories implementing the Zero Carbon Tech roadmap.
The project also demonstrates the power of academic–industry collaboration. The involvement of the National Technical University of Athens across the study and research phases was instrumental in selecting technologies that ensure the factory's energy systems are appropriate, sustainable, technically robust, and scalable.
While the current focus is on decarbonizing manufacturing, Papastratos is also exploring opportunities to extend its climate action beyond the factory gates. These efforts include: ·
- Evaluating off-site renewable energy sourcing through the national grid.
- Exploring low-emission logistics solutions to reduce the carbon footprint of product distribution.
- Sharing best practices across PMI’s global network to accelerate the transition to sustainable manufacturing.
For Papastratos, sustainability is not a side project—it’s a strategic imperative. According to Giorgos Margonis, Managing Director for Greece, Cyprus & Malta:
Sustainable development is not an alternative. It is our only path forward—and our conscious choice. With these investments, we are not only upgrading our factory; we are redefining what it means to manufacture responsibly.
Papastratos is demonstrating that with the right vision, technology, and partnerships, climate action can be embedded into the very fabric of industrial operations—delivering measurable impact today while building resilience for tomorrow.
This market story should be read in conjunction with Integrated Report 2024 and the 2024 FY actuals for selected EHS data:
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