There are actually two methods of extracting fabric from the bamboo plant. The first is mechanical. This involves crushing the plants into a mush, using natural enzymes to break it down and then combing out the fibres and spinning them into a yarn. The fabric produced this way resembles linen (indeed, it is often called bamboo linen). This method does have some environmental drawbacks but could potentially be sustainable. However, because it is labour-intensive, it's expensive, and the fabric produced is not soft enough to be used in the bamboo fibre underwear that is increasingly popular.
The second method is chemical. The plants are cooked in a cocktail of chemical solvents - primarily sodium hydroxide (lye, or caustic soda, as it's more commonly known) and carbon disulfide. Both are known to be harmful to human health, and sodium hydroxide can harm aquatic life when released into the water supply. Many companies using bamboo fabrics claim that because these are only used in a small part of the production process, they are not significant. But a factory producing tonnes of fabric a year will expose both workers and the wider environment to a vast amount of such chemicals.
Sulphuric acid is also involved The viscose bamboo cellulose is forced through spinneret nozzles into a large container of dilute sulphuric acid solution that works to harden viscose bamboo cellulose sodium xanthogenate and reconverts it into bamboo cellulose fiber threads that are spun into the yarns to be woven into a fabric.
The lesson, therefore, is that until the production process becomes both more transparent and more sustainable, it might be best to keep a watchful eye on bamboo. As Sarah Compson says: "We'd be happy to certify bamboo at the Soil Association if someone could come up with a sustainable method that goes all through the supply chain, not just the growing."
www.theguardian.com/lifeandstyle/2008/aug/13/bamboo.fabric
owlcation.com/stem/Bamboo-Fiber-The-Manufacturing-Process-and-How-to-Care-for-Bamboo-Fabrics