Despite the name, Swiss company Model Group makes paper, not models. (It's a family-run business, and Model is their last name.) For several years, the company has been experimenting with creating injection molded products derived from paper.
They've developed what they call Paper-Pearls, which are like nurdles but derived from wood fibers used in the papermaking process—including fibers too short for paper production, which would otherwise go to waste. These Paper-Pearls are combined with bioplastics, and injection-molded by German manufacturer Arburg's machines. "It can be used with conventional injection moulding machines and tools," the company writes, "so that [changing over] is as easy as possible."
As for why they're doing this:
"While traditional plastic is laboriously extracted from petroleum, paper fibers are the basis of our Paper-Pearls – a much cheaper raw material."
Here are some sample items they've successfully molded using Paper-Pearls:
Development is ongoing. The company's ultimate goal is for items molded with Paper-Pearls to become recyclable "in the paper cycle," as opposed to in the plastic cycle. But they're not there yet.
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You should look up PaperFoam....