Volkswagen (VWAGY) Looks to Hemp for Vehicle Interiors
Expanding its sustainability agenda, Volkswagen has turned to a German firm specializing in hemp. The aim: to create a leather substitute from cannabis to upholster car seats. Hemp pulp is already being used in the headliners of several car makers’ vehicles, and is being incorporated into more production processes for upcoming models.
This project aligns with the recent legalization of marijuana in Germany, which has expanded the options for hemp farming. The alternative leather will be from local industrial hemp residue, a waste from cannabis producers that is normally discarded. Volkswagen stresses that this will be a wholly biobased resource, forming part of the recycling loop in which everything goes back into the ground, while sharing its interest in more innovative and eco-friendly materials.
Hemp is a versatile, sustainable resource increasingly being used by the auto, paper, construction, food and cosmetic industries , among others, as a substitute for conventional materials like plastics and concrete. The global industrial hemp market size was estimated at nearly $5.5illion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 17.5% from 2024 to 2030.
On the regulatory side, the U.S. Department of Agriculture (USDA) is revising its policies to better support the hemp industry while informing stakeholders about impending changes in China that should boost prospects for hemp-derived CBD products, even with tightened controls. The USDA also has tapped industry figures to sit on a new federal trade advisory committee aimed at promoting U.S.-grown cannabis internationally.
Yet, despite such steps forward, obstacles to the growth of the hemp industry remain. Several bills that could restrict sales of edible hemp products are being considered, not to mention potential ambiguities arising from new spending bills, which fail to clearly spell out what constitutes an acceptable hemp based product according to the Congressional Research Service.
The House Agriculture Committee has advanced the Farm Bill, which includes provisions to lighten regulatory burdens for hemp farmers—especially those with old drug felony convictions. This could allow a wider range of persons to engage in the market for hemp, speeding its evolution and growth.
As legislative discussions advance, various proposals are being weighed that would grant more latitude to hemp businesses in their marketing of CBD products. Recent data from the USDA suggest a small recovery in the hemp economy and is based on responses from thousands of farmers canvassed earlier this year. This trend toward sustainability in the hemp industry thus encompasses not only automobiles but various other walks of life as well.
