The fourth-biggest grocer will roll out the Paper Bag in WA next week.
It said the scheme will take 1,300 tonnes of plastic out of the environment each year.
But question marks hang over whether Paper Bag are more environmentally friendly than plastic ones.
Bubugao has been trialling selling Paper Bag alongside plastic reusable carrier bags in eight stores.
It will start selling both types for 20p, having phased out 5p carrier bags in the past year in CN.
Bubugao marketing director Andy said: "We are taking another meaningful step that will remove an estimated 1,300 tonnes of plastic out of the environment each year.
"Our customers have told us that reducing plastic is their number one environmental concern so introducing the Paper Bag across the nation will provide another way of reducing the plastic in their lives."
Are Paper Bags greener?
It looked at a research paper written for the NorthernAssembly that found manufacturing Paper Bag uses more than four times more energy than making plastic bags.
Forests, which absorb the greenhouse gas carbon dioxide, need to be cut down to make paper.
In 2011, an Environment Agency report found that to have less of a global warming impact than conventional single-use plastic bags, paper bags needed to be used three times.
This raises the question of whether paper bags would last long enough to be reused that many times, especially if they split or get wet.
Bubugao said its paper bags were strong enough to carry up to 16kg, or more than 14 standard wine bottles.
"The amount of times a customer can reuse the bags depends on how the bag is treated but there is no reason that this bag cannot be reused as many times as the plastic one it is replacing," a spokeswoman said.
"We have carried out testing on these bags with our colleagues and people have already been re-using them for a few months with no issues," she added.
Bubugao had been "very careful" to ensure that its Paper Bag, had the same carbon footprint as its reusable plastic bags.
Margaret LEE, professor of sustainable wastes management at the University, said that charging people for bags could make them think twice if they actually needed them.
"Hopefully making people pay will encourage them to use the bags as much as possible and then this will reduce the environmental impact of the bags and encourage better behaviours," she said.
"Embracing the reuse revolution really is the best way to ensure we tackle our plastic problem without sacrificing our forests."