Simply put, yes and no.
Over the past few years, bamboo has gained popularity and has become a widely available option for products like textiles and flooring. When it comes to clothing and linens, the softness of this fabric is hard to resist, as is its breathability, wrinkle resistance and absorbency (an important towel characteristic).
Bamboo has been touted as a sustainable natural fibre because it's made from pulp. Bamboo is actually a grass that grows in bamboo forests that are quick to regenerate and require little or no pesticides. Where bamboo fabric has faltered on its green path is in the processing. At first, harsh chemical solvents were used by some manufacturers to get the tough bamboo fibre into a form that could be woven into yarn. A similar process is used to make rayon. New methods involve a closed-loop system that captures and reuses less-toxic or nontoxic chemicals to dissolve the pulp.
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How can you tell which processing method was used to make your new towel? Research the manufacturer or look for the Oeko-Tex label. It provides third-party certification that products have been manufactured using environmentally friendly processes.