Integrating Industrial Hemp into Albania’s Industrial Strategy

Albania is at a crucial juncture in its economic development, particularly within the industrial sector. According to a report by the Regional Cooperation Council, Albania is the only country in the Western Balkans that lacks a formal industrial policy_¹. This lack of a strategic framework has resulted in declining industrial performance, as evidenced by recent declines in agriculture and manufacturing. To address these challenges and promote sustainable economic growth, Albania should consider integrating industrial hemp into its industrial policy.

Understanding Industrial Strategy

An industrial strategy, also known as industrial policy, serves as a strategic framework that outlines a government’s approach to promoting and developing its industrial sector. It typically includes a clear vision and objectives, sectoral focus, policy measures, a regulatory framework, support for innovation, skills development, sustainability goals, and mechanisms for monitoring and evaluation. For Albania, the creation of a comprehensive industrial policy is essential to improve competitiveness, increase production capacities and improve integration with regional and European markets.

Current State of Albania’s Industrial and Agricultural Sectors

Albania’s industrial sector has faced major challenges, with recent data showing a decline in industrial production for the second consecutive year. The latest data from INSTAT reveals that the agricultural sector has also been in decline, experiencing a decline for the fourth consecutive year in 2024. Specifically, agricultural production fell by 1.1% in 2024, after a decline of 1.8% in 2023. The industrial sector faced an even deeper decline of 6.7%, the largest since the pandemic in 2020². This decline is mainly attributed to external factors, such as the devaluation of the euro and the increase in domestic costs, which have negatively affected exporters’ revenues. The collapse of the euro has led to the closure of many companies, especially in the clothing and footwear industry, which saw almost a fifth of jobs cut last year. Without a structured industrial policy, the government lacks the necessary tools to intervene effectively and boost growth in both sectors.

The Role of Industrial Hemp in Economic Development

Integrating industrial hemp (also known as industrial cannabis) into Albania’s industrial policy could offer a multi-dimensional solution to the country’s economic challenges. The European Union has recognized the potential of industrial hemp as a sustainable raw material, linking it to broader initiatives on sustainability and the green economy, such as the EU Industrial Strategy and the EU Green Deal. According to forecasts, the hemp industry in Europe is expected to grow from $2.9 billion in 2024 to an impressive $20.44 billion by 2033³, highlighting the significant economic potential that Albania can tap by embracing and developing this sector.

The EU Industrial Strategy

The EU Industrial Strategy⁴ is a comprehensive framework developed by the European Union to improve the competitiveness of European industries, promote sustainable growth and ensure that the EU remains a global leader in innovation and technology. The strategy aims to support the transition to a greener and more digital economy, ensuring that industry can thrive in a globalised market.

Key points of the EU Industrial Strategy include:

Sustainability: Promoting environmentally friendly practices and technologies, including the transition to a circular economy and reducing carbon emissions.
Digitalization: Encouraging the adoption of digital technologies across industry to improve efficiency, productivity and innovation.
Resilience: Strengthening the resilience of supply chains and industries to withstand economic shocks, such as those experienced during the COVID-19 pandemic.
Innovation: Support for research and development to drive innovation in key sectors, including advanced manufacturing, biotechnology and clean technologies.
Skills Development: Investing in education and training to ensure that the workforce is equipped with the skills needed for the future job market.

Concerning hemp, the EU Industrial Strategy recognises its potential as a sustainable raw material for various industries, including textiles, construction and bioplastics. Hemp is considered a multifunctional crop that can contribute to the EU’s sustainability and circular economy goals. The strategy could include initiatives to promote hemp cultivation and processing, support research into its applications and facilitate market access for hemp-based products.

Overall, the integration of hemp into the EU Industrial Strategy reflects a broader commitment to sustainable practices and the exploration of innovative materials that can help achieve environmental and economic objectives.

European Green Deal

The European Green Deal is a comprehensive initiative aimed at transforming the European Union into a sustainable and climate-neutral economy by 2050⁵. It addresses the urgent challenges posed by climate change and environmental degradation by promoting decarbonization, improving energy efficiency and boosting the use of renewable energy sources. The EU Green Deal encompasses a wide range of policies and actions, including investment in green technologies, support for industry transitioning to sustainable practices and the promotion of a circular economy that minimizes waste.

Furthermore, it aims to create new jobs in the green sector, ensuring that the transition is fair and inclusive for all regions and communities. By linking economic growth to environmental sustainability, the EU Green Deal aims to position Europe as a global leader in the fight against climate change and to deliver on international commitments, such as the Paris Agreement⁶.

Embracing Industrial Hemp for Albania’s Growth

As Albania seeks to revitalise its industrial sector and improve its competitiveness, the integration of industrial hemp into its industrial policy represents a promising opportunity. By adopting a strategic framework that prioritises sustainable practices and innovation, Albania can address current economic challenges while aligning itself with European standards and initiatives. The significant growth forecast for the European hemp industry, from $2.9 billion in 2023 to an impressive $20.44 billion by 2033, highlights the potential economic benefits that can be realized through hemp cultivation and processing.

By harnessing the unique advantages of industrial hemp, Albania can stimulate economic growth, create jobs and foster innovation. The versatility of hemp allows its use in various sectors, including textiles, construction, bioplastics and even food products, making it a valuable addition to the country’s industrial landscape. Furthermore, hemp cultivation is in line with the EU’s sustainability goals, contributing to a circular economy and reducing dependence on non-renewable resources.

Revitalizing Albania’s Economy with Industrial Hemp

Integrating industrial hemp into Albania’s industrial policy is not just a strategic move; it is a necessary step towards revitalizing the country’s economy. As the nation grapples with declining industrial and agricultural performance, embracing industrial hemp offers a sustainable solution that can improve sustainability, create jobs, and foster innovation. By aligning its industrial policy with the principles of the EU Green Deal and recognizing the potential of industrial hemp, Albania can position itself as a progressive leader in the region.

This approach will not only bring benefits to the economy, but will also contribute to a healthier environment and a more sustainable future for generations to come. The time to act is now, and the potential for growth and transformation is within reach. By creating a clear industrial policy that includes industrial hemp, Albania can take important steps towards economic revitalization, environmental sustainability, and improved competitiveness in the European market.

A Strategic Opportunity for Albania’s Economic and Industrial Growth

Integrating industrial hemp into Albania’s industrial policy represents a strategic opportunity to address current economic challenges while linking to broader European initiatives. By embracing this multifunctional crop, Albania can pave the way for a more sustainable and prosperous future, ultimately benefiting both its agricultural and industrial sectors.

Albania has the potential to harness industrial hemp as an engine of economic growth and sustainable development. With a coordinated approach and a strong commitment to supporting this sector, the country can create a successful model for sustainable development that will serve as an example for others in the region and beyond.

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