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Biobased Product Labeling Program Proposed by USDA

Beveridge & Diamond, P.C., August 31, 2009

If “green” is good, is “biobased” better?  A new federal-government-certified label could soon be available to enhance the marketing of certain biobased products.  The proposed USDA labeling program could raise public awareness and demand for biobased products.  To be eligible for the label under the proposed program, products would have to meet a statutory definition and contain minimum levels of biobased content.  If established, the program would fulfill a Congressional mandate issued under the Farm Security and Rural Investment Act of 2002, and would complement an already significant federal procurement preference for biobased products. 

Introduction   

The ever-growing interest in “green” marketing is driving the proliferation of a spectrum of “ecolabels” declaring the environmental or social responsibility of the products they accompany.  There are at least 300 ecolabeling certification programs,[1] ranging from those that are well known, such as EPA’s Energy Star,[2] to lesser known programs such as the “leaping bunny” logo used to denote animal “cruelty-free” products.[3]  Ecolabeling programs look to meet the consumer demand for information about the environmental and social implications of products.  Obtaining an ecolabel certification is increasingly becoming an important consideration for many product manufacturers.  At the same time, however, there is concern with “greenwashing,” where ecolabels may be regarded as having no substantive content.

That concern may change with the prospect of a new federal-government-certified ecolabel likely to be available for certain biobased products.  On July 31, 2009, the United States Department of Agriculture (“USDA”) published a notice of proposed rulemaking in the Federal Register entitled “Voluntary Labeling Program for Biobased Products.”[4]  The proposed rule would establish a voluntary green marketing program whereby eligible products could be marketed with a “USDA Certified Biobased Product” label.  When established, the program would complement a related federal procurement preference for biobased products, and would likely further stimulate demand for biobased products.  Also, because the program would be directed at public purchasers as opposed to government agencies, the program stands to increase the general public’s overall awareness of biobased products.  USDA will accept comments on the proposed rule through September 29, 2009.     

The Proposed Voluntary Labeling Program for Biobased Products

The Farm Security and Rural Investment Act of 2002 (“FSRIA”) requires USDA to establish a voluntary labeling program by which USDA will authorize producers of biobased products to use the label “U.S.D.A. Certified Biobased Product.”[5]  Under the proposed rule, a product must meet two criteria in order to be eligible for the USDA certification:

            1.  A Biobased Product

Biobased products are defined by the statute as “commercial or industrial product[s] (other than food or feed) that [are] composed, in whole or in significant part, of biological products or renewable domestic agricultural materials (including plant, animal and marine materials) or forestry materials.”[6]  The labeling program would not apply to motor vehicle fuels, heating oil, or electricity produced from biomass.[7]  Also, the labeling program would not apply typically to products that are determined to have “mature markets,” meaning that the product had significant market penetration in 1972.[8] 

            2.   Minimum Biobased Content

Under the proposed rule, the biobased content of the product must be equal to or greater than the applicable minimum.  The applicable minimum depends on whether the product falls within a generic grouping of USDA-designated product categories known as “designated items.”[9]  To date, USDA has designated 33 item categories, including laundry products, carpets, dust suppressants, fertilizers, diesel fuel additives, bedding and towels, roof coatings, and mobile equipment hydraulic fluids.  For each “designated item,” USDA identifies a minimum biobased content required in order for the product to qualify for the label.  For instance, the minimum biobased content for the designated item “glass cleaners” is 49%, and therefore glass cleaning products would be eligible for the label if they consisted of at least 49% biobased material by weight.[10]  USDA may add product categories to its list of designated items, and manufacturers and vendors may propose recommendations to USDA at any time.

If a product is marketed within multiple designated items and uses the same packaging, its minimum biobased content would have to meet or exceed the minimum content levels specified in both designated items in order to qualify for the label.  For example, a product marketed as both a “glass cleaner” and a “bath and tile cleaner” in the same package would not be eligible for the label unless its minimum content level met or exceeded the content level for both designated items (49% for glass cleaners and 74% for bath and tile cleaners).  On the other hand, if the product is packaged differently for marketing under each designated item (e.g., a blue bottle for the glass cleaner and a green bottle for the bath and tile cleaner), the product marketed as a glass cleaner may be eligible for the label even if the product marketed as a bath and tile cleaner is not.[11] 

The minimum biobased content level for products not within designated items, including intermediate ingredients or feedstocks, would be set at 51%.  However, the proposed rule would allow manufacturers, vendors and trade associations to request (with supporting analyses) alternative minimum levels for specific products, subject to USDA review and approval.[12]

Use of the biobased label would be authorized by application to USDA.  If approved, the product would be listed on USDA’s “BioPreferred” website,[13] and the certification would remain valid for as long as the biobased product is manufactured in accordance with the information supplied or until USDA revises the minimum content levels.[14]  Manufacturers and vendors who choose to participate in the labeling program would be required to keep certain records related to their labeled products.  These required records, which must be maintained at least three years beyond the end of the label certification for the product, include the results of all tests to determine biobased content, the results and supporting documentation of industry standard performance tests, and documentation to support any associated claims of environmental and sustainability benefits of the product.   

Unauthorized use of the USDA biobased label, as well as misrepresentations about the biobased content of products, would constitute violations under the program.  Violators may be subject to certification suspension and revocation.  More serious violators may also be referred to the Federal Trade Commission for possible civil enforcement under the Federal Trade Commission Act which makes unlawful “deceptive acts or practices in or affecting commerce.”[15]

Conclusion

If established, the program would complement an already significant federal procurement program for biobased products, and is likely to increase consumer demand and public awareness for biobased products.  Furthermore, manufacturers, vendors and trade associations dealing in biobased products may stand to benefit from such increased product recognition and public demand.  Interested parties may submit comments on the proposed rule until September 29, 2009.  

Beveridge & Diamond, P.C. actively counsels clients on environmental marketing and continues to monitor this issue.

* * *

For more information on this topic, please contact Mark Duvall (mduvall@bdlaw.com).  This alert was prepared with the assistance of Graham St. Michel.  


[1] For a good compendium of facts and descriptions of ecolabels, see www.ecolabelling.org

[2] http://www.energystar.gov/index.cfm?c=home.index.

[3] http://www.leapingbunny.org/.

[4] Voluntary Labeling Program for Biobased Products, 74 Fed. Reg. 38,296 (July 31, 2009) (proposed to be codified at 7 C.F.R. Part 2904). 

[5] Farm Security and Rural Investment Act of 2002, as amended by the Food, Conservation, and Energy Act of 2008, 7 U.S.C. § 8102(h).  The July 31, 2009 proposed rule is a response to FSRIA’s edict that USDA “shall issue criteria for determining which products may qualify to receive the label . . . .”  The proposed rule comes more than seven years after the statutory deadline; FSRIA directs USDA to issue the eligibility criteria “within one year after May 13, 2002.”  Id. § 8102(h)(2).  FSRIA also establishes a mechanism to increase federal government purchasing of biobased products by requiring federal agencies to procure preferred biobased products in certain instances.  While not the subject of this alert, click here for more information on the federal procurement program.

[6] 7 U.S.C. § 8101(2). 

[7] 74 Fed. Reg. at 38,311.

[8] Id.  Although, USDA would reserve discretion to allow certification of specific mature market products on a case-by-case basis.  USDA’s stated reason for excluding mature market products in most cases is a belief that widespread labeling of such products could negatively impact the entry of new biobased products into markets in which mature products already enjoy significant market share. 

[9] Designated items, which are relevant to the federal procurement program, are listed in 7 C.F.R. §§ 2902.10-2902.42.

[10] 7 C.F.R. § 2902.30. 

[11] 74 Fed. Reg. at 38,298. 

[12] 74 Fed. Reg. at 38,312-13.

[13] http://www.da.usda.gov/procurement/programs/biopreferred.htm.

[14] 74 Fed. Reg. at 38,313. 

[15] 15 U.S.C. § 45.  For more information about the FTC’s role in the green marketing arena see Going Green:  FTC Takes Action on Environmental Marketing (Beveridge & Diamond, P.C.), July 1, 2009, available at http://www.bdlaw.com/news-610.html.

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