FRANKFURT, Germany (AFP) — Choked by soaring energy and wood pulp costs, German toilet paper maker Hakle is turning to waste from coffee production to stay afloat and help the environment.

Just two years ago, at the height of the coronavirus pandemic, the firm profited from a stampede of consumers rushing to stock up on essentials.

But with the health crisis abating, Russia's invasion of Ukraine has sparked skyrocketing energy costs, forcing Hakle to file for insolvency recently.

Innovation could now be the key to survival.

Huge quantities of coffee grounds are produced every year by the European food industry, and Hakle has found a way to transform the waste into material to make loo roll.

A quarter fewer trees have to be used.

The first rolls using the new process were produced at the Duesseldorf-based company's factory last week, Hakle's chief marketing officer Karen Jung told AFP.

"The goal is 20 to 25 percent" of coffee grounds constituting the material for making the paper, replacing wood pulp, Jung said, adding the company was working towards reaching those levels.

"That does not sound like a lot — but it means that a quarter fewer trees have to be used," Jung, whose company entered insolvency proceedings in September due to surging energy costs, added.

Hakle sees a strong economic case. The price of wood pulp — which is in high demand in China, the world's biggest consumer — has risen rapidly since 2020. It is not the first time that the firm has taken an unusual approach to producing loo paper.

Two years ago, it used grass grown in the Rhineland to make toilet paper, said Jung, who runs the business with her husband.