Update: Industrial hemp in Germany

Michael Karus1 and Gero Leson2

1. nova - Institute for Political and Ecological Innovation, Cologne, Germany
2. nova - Institute for Political and Ecological Innovation, Santa Monica, California

    On March 1, 1996 the German Bundesrat (representing the states) followed the Bundestag (federal parliament) and passed a law re-legalizing the cultivation of industrial hemp by a large majority.  This step concludes two years of heated public debate of the economic merits of industrial hemp vs. the potential for drug abuse.  The law follows applicable EU regulations, which limit hemp farming to full-time farmers, require the use of EU-certified varieties with less than 0.3% THC, and provide for verification by German authorities.  Eligible farmers will receive a EU subsidy of 1,500 DM/ha (US $400/acre).
    Based on sales figures for hemp seeds and industry interviews, nova Institute estimates that, in 1996, hemp will be grown in Germany on 1,400 ha.  The area is limited primarily by tight supplies of French certified seeds, which has driven costs in the German market up from 5 DM/kg to more than 10 DM/kg.  The registration of Hungarian and German varieties, expected for 1997, will likely remove this obstacle.
    Farmers have contracted with recently emerging hemp entrepreneurs and processors for much of this area.  For example, 300 ha in Northern Germany have been contracted by the Dutch group Hempflax, and the Badische Faseraufbereitung (BaFa) near Karlsruhe has contracted 112 ha with 40 local farmers in plots of typically 1-3 ha.   In addition to the subsidy, farmers will typically receive 80 DM per delivered ton of straw (next year it will be about 120- 140 DM/ton).
    Several recently established options will be in place by harvest time for processing of the field retted stalks .  All involve decortication and, subsequently, various degrees of mechanical refining of the bast fiber.  BaFa plans to install a processing line manufactured in Belgium by Charle, an experienced supplier to the flax industry.  It has a maximum annual processing capacity of 10,000 tons of straw, corresponding to 1,000-1,500 ha.  In 1996/97 it will process 4,000-5,000 tons of straw primarily into fiber for pulping and automotive applications and hurds for animal bedding (see below).  Hempflax is also close to completing a line which combines in-house R&D and equipment purchased outside.  The German manufacturer Bahmer is installing three of their newly developed FLAKSY lines in the former East Germany, each with an hourly straw processing capacity of 2 metric tons.  Two of the lines are intended to process flax into a fine short fiber for the textile industry, but will likely also process hemp.  One of the units is combined with a detergent processing step which produces a very fine, cotton like flax fiber (FLASIN).  Another unit may be combined with fine separation equipment offered by TEMAFA.  Total capital cost for these lines, all of which have yet to demonstrate their capability to process hemp on the full-scale, vary between DM 1-4 million depending on the quality of the breaker/decorticator unit, the number of separation steps and the sophistication of the dust collection system.
    There are several potential markets for the estimated 2,000-3,000 tons of bast fibers and 4,000-6,000 tons of hurds produced in 1996.  Karl-Heinz Hofmann at CHEMISCHE BLEICHEREI EUGEN JETTER near Dresden has secured the financing to start-up his production of unbleached long-fiber hemp pulp for specialty papers, such as filter and cigarette papers, in October.  The plant will have a maximum output of 7,500 tons of pulp per year.  Hofmann expects to pay 700-800 DM/ton for clean, decorticated fiber with a hurds content of less than 5%.  Suppliers to the automotive industry show interest in a more processed short fiber for use in compression molded dash boards, door covers, etc., for which they will pay 800-1,000 DM/ton.  Whether the dew-retted, highly refined short fiber, which will likely be available at prices between 2-4 DM/kg, can be rotor-spun for use in textiles remains questionable.  Additional chemical processing, e.g. by steam explosion, may be required.  As in the UK, the Netherlands and France, the hurds will be used for animal bedding and in construction, and will fetch 200-300 DM/ton for the processor, compared to flax shives which fetch only 50 DM/ton.
    Small quantities of hemp for seed will be grown in Southern Germany.   A growing market for hemp oil in the food and cosmetics sectors now pays 2-4 DM/kg to the producers of organically grown seeds.
    For Germany, 1996 represents a challenging "field test" of various aspects of hemp farming, processing and marketing.  It is unlikely that hemp cultivation in Germany will expand beyond several thousand hectares without development of new products and markets.  To support these market development efforts and to help focus limited resources, nova Institute and two research partners are currently conducting a major study for the DEUTSCHE BUNDES-STIFTUNG UMWELT (German Environmental Foundation).   It will evaluate major potential markets for hemp products under economic, technical and environmental criteria and identify the product lines which can be implemented in the short-term.