[Federal Register: August 17, 2006 (Volume 71, Number 159)] [Proposed Rules] [Page 47589-47612] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr17au06-13] [[Page 47589]] ----------------------------------------------------------------------- Part III Department of Agriculture ----------------------------------------------------------------------- Office of Energy Policy and New Uses ----------------------------------------------------------------------- 7 CFR Part 2902 Designation of Biobased Items for Federal Procurement; Proposed Rule [[Page 47590]] ----------------------------------------------------------------------- DEPARTMENT OF AGRICULTURE Office of Energy Policy and New Uses 7 CFR Part 2902 RIN 0503-AA31 Designation of Biobased Items for Federal Procurement AGENCY: Office of Energy Policy and New Uses, USDA. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The U.S. Department of Agriculture (USDA) is proposing to amend 7 CFR part 2902, Guidelines for Designating Biobased Products for Federal Procurement, to add 10 sections to designate the following 10 items within which biobased products would be afforded Federal procurement preference, as provided for under section 9002 of the Farm Security and Rural Investment Act of 2002: 2-Cycle engine oils; lip care products; biodegradable films; stationary equipment hydraulic fluids; biodegradable cutlery; glass cleaners; greases; dust suppressants; carpets; and carpet and upholstery cleaners. USDA also is proposing minimum biobased content for each of these items. Once USDA designates an item, procuring agencies are required generally to purchase biobased products within these designated items where the purchase price of the procurement item exceeds $10,000 or where the quantity of such items or the functionally equivalent items purchased over the preceding fiscal year equaled $10,000 or more. DATES: USDA will accept public comments on this proposed rule until October 16, 2006. ADDRESSES: You may submit comments by any of the following methods. All submissions received must include the agency name and Regulatory Information Number (RIN). The RIN for this rulemaking is 0503-AA31. Also, please identify submittals as pertaining to the ``Proposed Designation of Items.'' Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments. E-mail: fb4p@oce.usda.gov. Include RIN number 0503-AA31 and ``Proposed Designation of Items'' on the subject line. Please include your name and address in your message. Mail/commercial/hand delivery: Mail or deliver your comments to: Marvin Duncan, USDA, Office of the Chief Economist, Office of Energy Policy and New Uses, Room 4059, South Building, 1400 Independence Avenue, SW., MS-3815, Washington, DC 20250-3815. Persons with disabilities who require alternative means for communication for regulatory information (braille, large print, audiotape, etc.) should contact the USDA TARGET Center at (202) 720- 2600 (voice) and (202) 401-4133 (TDD). FOR FURTHER INFORMATION CONTACT: Marvin Duncan, USDA, Office of the Chief Economist, Office of Energy Policy and New Uses, Room 4059, South Building, 1400 Independence Avenue, SW., MS-3815, Washington, DC 20250- 3815; e-mail: mduncan@oce.usda.gov; phone (202) 401-0461. Information regarding the Federal Biobased Products Preferred Procurement Program is available on the Internet at http://www.biobased.oce.usda.gov. SUPPLEMENTARY INFORMATION: The information presented in this preamble is organized as follows: I. Authority II. Background III. Summary of Today's Proposed Rulemaking IV. Designation of Items, Minimum Biobased Contents, and Time Frame A. Background B. Items Proposed for Designation C. Minimum Biobased Contents D. Effective Date for Procurement Preference and Incorporation into Specifications V. Where Can Agencies Get More Information on These USDA-designated Items? VI. Regulatory Information A. Executive Order 12866: Regulatory Planning and Review B. Regulatory Flexibility Act (RFA) C. Executive Order 12630: Governmental Actions and Interference with Constitutionally Protected Property Rights D. Executive Order 12988: Civil Justice Reform E. Executive Order 13132: Federalism F. Unfunded Mandates Reform Act of 1995 G. Executive Order 12372: Intergovernmental Review of Federal Programs H. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments I. Paperwork Reduction Act J. Government Paperwork Elimination Act Compliance I. Authority The designation of these items is proposed under the authority of section 9002 of the Farm Security and Rural Investment Act of 2002 (FSRIA), 7 U.S.C. 8102 (referred to in this document as ``section 9002''). II. Background Section 9002 of FSRIA, as amended by section 943 of the Energy Policy Act of 2005, Public Law 109-58 (Energy Policy Act), provides for the preferred procurement of biobased products by procuring agencies. Section 943 of the Energy Policy Act amended the definitions section of FSRIA, 7 U.S.C. 8101, by adding a definition of ``procuring agency'' that includes both Federal agencies and ``any person contracting with any Federal agency with respect to work performed under that contract.'' The amendment also made Federal contractors, as well as Federal agencies, expressly subject to the procurement preference provisions of section 9002 of FSRIA. However, because this program requires agencies to incorporate the preference for biobased products into procurement specifications, the statutory amendment makes no substantive change to the program. USDA amended the Guidelines to incorporate the new definition of ``procuring agency'' through an interim final rule. Procuring agencies must procure biobased products within each designated item unless they determine that products within a designated item are not reasonably available within a reasonable period of time, fail to meet the reasonable performance standards of the procuring agencies, or are available only at an unreasonable price. As stated in the Guidelines, biobased products that are merely incidental to Federal funding are excluded from the preferred procurement program. In implementing the preferred procurement program for biobased products, procuring agencies should follow their procurement rules and Office of Federal Procurement Policy guidance on buying non-biobased products when biobased products exist and should document exceptions taken for price, performance, and availability. USDA recognizes that the performance needs for a given application are important criteria in making procurement decisions. USDA is not requiring procuring agencies to limit their choices to biobased products that fall under the items for designation in this proposed rule. Rather, the effect of the designation of the items is to require procuring agencies to determine their performance needs, determine whether there are qualified biobased products that fall under the designated items that meet the reasonable performance standards for those needs, and purchase such qualified biobased products to the maximum extent practicable as required by section 9002. Section 9002 also requires USDA to provide information to procuring agencies on the availability, relative price, performance, and environmental and public health benefits of such items [[Page 47591]] and, under section 9002(e)(1)(C), to recommend where appropriate the minimum level of biobased content to be contained in the procured products. Overlap with EPA Comprehensive Procurement Guidelines program for recovered content products. Some of the biobased items designated for preferred procurement may overlap with products designated under the Environmental Protection Agency's (EPA) Comprehensive Procurement Guidelines program for recovered content products. Where that occurs, an EPA-designated recovered content product (also known as ``recycled content products'' or ``EPA-designated products'') has priority in Federal procurement over the qualifying biobased product. In situations where USDA believes there may be an overlap, it plans to ask manufacturers of qualifying biobased products to provide additional product and performance information including the various suggested uses of their product and the performance standards against which a particular product has been tested. In addition, depending on the type of biobased product, manufacturers may also be asked to provide other types of information, such as whether the product contains petroleum-, coal-, or natural gas-based components and whether the product contains recovered materials. Federal agencies may also ask manufacturers for information on a product's biobased content and its profile against environmental and human health measures and life cycle costs (the Building for Environmental and Economic Sustainability (BEES) analysis or ASTM International (ASTM) Standard D7075 for evaluating and reporting on environmental performance of biobased products). Such information will assist Federal agencies in determining whether the biobased products in question are, or are not, the same products for the same uses as the recovered content products and will be available on USDA's Web site with its catalog of qualifying biobased products. Where a biobased item is used for the same purposes and to meet the same requirements as an EPA-designated recovered content product, the Federal agency must purchase the recovered content product. For example, if a biobased hydraulic fluid is to be used as a fluid in hydraulic systems and ``lubricating oils containing re-refined oil'' has already been designated by EPA for that purpose, then the Federal agency must purchase the EPA-designated recovered content product, ``lubricating oils containing re-refined oil.'' If, on the other hand, that biobased hydraulic fluid is to be used to address certain environmental or health requirements that the EPA-designated recovered content product would not meet, then the biobased product should be given preference, subject to cost, availability, and performance. Federal Government Purchase of ``Green'' Products. Three components of the Federal government's green purchasing program are the Biobased Products Preferred Purchasing Program, the Environmental Protection Agency's Comprehensive Procurement Guidelines for products containing recovered materials, and the Environmentally Preferable Products Program. The Office of the Federal Environmental Executive (OFEE) and the Office of Management and Budget (OMB) encourage agencies to implement these components comprehensively when purchasing products and services. In the case of cleaning products, procuring agencies should note that not all biobased products are ``environmentally preferable.'' Unless the cleaning products contain no or reduced levels of metals and toxic and hazardous constituents, they can be harmful to aquatic life, the environment, or workers. When purchasing environmentally preferable cleaning products, many Federal agencies specify that products must meet Green Seal standards for institutional cleaning products or that products have been reformulated in accordance with recommendations from the U.S. EPA's Design for the Environment (DfE) program. Both the Green Seal standards and the DfE program identify chemicals of concern in cleaning products. These include zinc and other metals, formaldehyde, ammonia, alkylphenol ethoxylates, ethylene glycol, and volatile organic compounds. In addition, both require that cleaning products have neutral or less caustic pH. On the other hand, some biobased products may be better for the environment than some products that meet Green Seal standards for institutional cleaning products or that have been reformulated in accordance with the EPA's DfE program. To fully compare products, one must look at the ``cradle-to-grave'' impacts of the manufacture, use, and disposal of products. Biobased products that will be available for preferred procurement under this program have been assessed as to their ``cradle-to-grave'' impacts. One consideration of a product's impact on the environment is whether (and to what degree) it introduces new fossil carbon into the atmosphere. Qualifying biobased products offer the user the opportunity to manage the carbon cycle and limit the introduction of new fossil carbon into the atmosphere, whereas non-biobased products derived from fossil fuels add new fossil carbon to the atmosphere. Manufacturers of qualifying biobased products under the Federal Biobased Products Preferred Procurement Program (FB4P) will be able to provide, at the request of Federal agencies, factual information on environmental and human health effects of their products, including the results of the BEES analysis, which examines 11 different environmental parameters, including human health, or the comparable ASTM D7505. Therefore, USDA encourages Federal procurement agencies to examine all available information on the environmental and human health effects of cleaning products when making their purchasing decisions. Green Building Council. More than a dozen Federal agencies use the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) Green Building Rating Systems for new construction, building renovation, and building operation and maintenance. The systems provide criteria for implementing sustainable design principles in building design, construction, operation, and maintenance. Points are assigned to each criterion, and building projects can be certified as ``certified,'' ``silver,'' ``gold,'' or ``platinum,'' depending on the number of points for which the project qualifies. LEED for New Construction and Major Renovations (LEED-NC) includes a ``Materials & Resources'' criterion, with one point allocated for the use of rapidly renewable materials. Thus, the use of biobased construction products can help agencies obtain LEED certification for their building construction projects. Interagency Council. USDA has created, and is chairing, an ``interagency council,'' with membership selected from among Federal stakeholders to the FB4P. To augment its own research, USDA consults with this council in identifying the order of item designation, manufacturers producing and marketing products that fall within an item proposed for designation, performance standards used by Federal agencies evaluating products to be procured, and warranty information used by manufacturers of end user equipment and other products with regard to biobased products. III. Summary of Today's Proposed Rulemaking Today, USDA is proposing to designate the following 10 items for [[Page 47592]] preferred procurement: 2-Cycle engine oils; lip care products; biodegradable films; stationary equipment hydraulic fluids; biodegradable cutlery; glass cleaners; greases; dust suppressants; carpets; and carpet and upholstery cleaners. USDA is also proposing minimum biobased content for each of these items (see Section IV.C). Lastly, USDA is proposing a date by which Federal agencies must incorporate designated items into their procurement specifications (see Section IV.D). In today's proposed rulemaking, USDA is providing information on its findings as to the availability, economic and technical feasibility, environmental and public health benefits, and life cycle costs for each of the 10 designated items. Information on the availability, relative price, performance, and environmental and public health benefits of individual products within each of these 10 items is not presented in this notice. Further, USDA has reached an agreement with manufacturers not to publish their names in the Federal Register when designating items. This agreement was reached to encourage manufacturers to submit products for testing to support the designation of an item. Once an item has been designated, USDA will encourage the manufacturers of products within the designated item to voluntarily post their names and other contact information on the USDA FB4P Web site. Warranties. Some of the items being proposed for designation today may affect maintenance warranties. As time and resources allow, USDA will work with manufacturers on addressing any effect the use of biobased products may have on maintenance warranties. At this time, however, USDA does not have information available as to whether or not the manufacturers will state that the use of these products will void maintenance warranties. USDA encourages manufacturers of biobased products to work with original equipment manufacturers (OEMs) to ensure that biobased products will not void maintenance warranties when used. USDA is willing to assist manufacturers of the biobased products, if they find that existing performance standards for maintenance warranties are not relevant or appropriate for biobased products, in working with the appropriate OEMs to develop tests that are relevant and appropriate for the end uses in which biobased products are intended. If despite these efforts there is insufficient information regarding the use of a biobased product and its effect on maintenance warranties, USDA notes that the procurement agent would not be required to buy such a product. As information is available on warranties, USDA will make such information available on its FB4P Web site. Additional Information. USDA is working with manufacturers and vendors to post all relevant product and manufacturer contact information on the FB4P Web site before a procuring agency asks for it, in order to make the preferred program more efficient. Steps USDA has implemented, or will implement, include: Making direct contact with submitting companies through e-mail and phone conversations to encourage completion of product listing; coordinating outreach efforts with intermediate material producers to encourage participation of their customer base; conducting targeted outreach with industry and commodity groups to educate stakeholders on the importance of providing complete product information; participating in industry conferences and meetings to educate companies on program benefits and requirements; and communicating the potential for expanded markets beyond the Federal government, to include State and local governments, as well as the general public markets. Section V provides instructions to agencies on how to obtain this information on products within these items through the following Web site: http://www.biobased.oce.usda.gov. Comments. USDA invites comment on the proposed designation of these 10 items, including the definition, proposed minimum biobased content, and any of the relevant analyses performed during the selection of these items. In addition, USDA invites comments and information in the following areas: 1. Two of the items being proposed for designation (stationary equipment hydraulic fluids and carpets) may overlap with products designated under EPA's Comprehensive Procurement Guidelines for products containing recovered material. To help procuring agencies in making their purchasing decisions between biobased products within the proposed designated items that overlap with products containing recovered material, USDA is requesting from manufacturers and users product specific information on unique performance attributes, environmental and human health effects, disposal costs, and other attributes that would distinguish biobased products from products containing recovered material as well as non-biobased products. USDA will post this information on the FB4P Web site. 2. Biobased carpet can be composed of a biobased face or a biobased backing or both (i.e., both the face and backing are biobased). USDA is proposing in today's notice that the minimum biobased content for carpet be based on the total product; that is, on both the carpet's face and backing. USDA is seeking comment on whether separate minimum biobased contents should be set for the face and for the backing. Please provide detailed rationale and information to support your comments. 3. USDA is proposing to designate dust suppressants as an item for preferred procurement. The products intended to be covered are those designed for use in outdoor environments. However, the same products, or products with very similar formulations, may also be used in indoor environments, such as indoor arenas, that simulate outdoor conditions. For example, an indoor arena might provide parking on a dirt floor, such as would be found in outside parking. USDA is proposing that dust suppressant products used for similar situations that take place within an indoor environment be included in this item. USDA is interested in your comments on whether this item should be strictly limited to outdoor environments. Please be sure to provide your rationale for your comments. 4. We have attempted to identify relevant and appropriate performance standards and other relevant measures of performance for each of the proposed items. If you know of other such standards or relevant measures of performance for the proposed items, USDA requests that you submit information identifying such standards and measures, including their name (and other identifying information as necessary), identifying who is using the standard/measure, and describing the circumstances under which the product is being used. For example, in today's proposed rulemaking, a Green Seal standard (GS-37) has been identified for glass cleaners. USDA is interested in learning if other equivalent standards for glass cleaners exist and where they are being used. 5. As proposed, biodegradable films do not include films used for agricultural purposes (such as films that would be used to cover fields) and durable films. Durable films will be proposed as a separate item for preferred procurement. USDA, however, is interested in receiving comment on whether there should be any subcategories within biodegradable films (including any biodegradable films that might be considered agricultural films) and what they might be. Please be sure to provide rationale and supporting information with your comments. [[Page 47593]] 6. Many biobased products within the items being proposed for designation will have positive environmental and human health attributes. USDA is seeking comments on such attributes in order to provide additional information on the FB4P Web site. This information will then be available to Federal procuring agencies and will assist them in making ``best value'' purchase decisions. When possible, please provide appropriate documentation to support the environmental and human health attributes you describe. To assist you in developing your comments, the background information used in proposing these items for designation can be found on the FB4P Web site. All comments should be submitted as directed in the ADDRESSES section above. IV. Designation of Items, Minimum Biobased Contents, and Time Frame A. Background In order to designate items (generic groupings of specific products such as crankcase oils or products that contain qualifying biobased fibers) for preferred procurement, section 9002 requires USDA to consider: (1) The availability of items; and (2) the economic and technological feasibility of using the items, including the life cycle costs of the items. In considering an item's availability, USDA uses several sources of information. USDA performs Internet searches, contacts trade associations (such as the Biobased Manufacturers Association) and commodity groups, searches the Thomas Register (a database, used as a resource for finding companies and products manufactured in North America, containing over 173,000 entries), and contacts individual manufacturers and vendors to identify those manufacturers and vendors with biobased products within items being considered for designation. USDA uses the results of these same searches to determine if an item is generally available. In considering an item's economic and technological feasibility, USDA examines evidence pointing to the general commercial use of an item and its cost and performance characteristics. This information is obtained from the sources used to assess an item's availability. Commercial use, in turn, is evidenced by any manufacturer and vendor information on the availability, relative prices, and performance of their products as well as by evidence of an item being purchased by a procuring agency or other entity, where available. In sum, USDA considers an item economically and technologically feasible for purposes of designation if products within that item are being offered and used in the marketplace. In considering the life cycle costs of items proposed for designation, USDA uses the BEES analytical tool to test individual products within each proposed item. (Detailed information on this analytical tool can be found on the Web site http://www.bfrl.nist.gov/oae/software/bees.html. ) The BEES analytical tool measures the environmental performance and the economic performance of a product. Environmental performance is measured in the BEES analytical tool using the internationally-standardized and science-based life cycle assessment approach specified in the International Organization for Standardization (ISO) 14000 standards. The BEES environmental performance analysis includes human health as one of its components. All stages in the life of a product are analyzed: Raw material production; manufacture; transportation; installation; use; and recycling and waste management. The time period over which environmental performance is measured begins with raw material production and ends with disposal (waste management). The BEES environmental performance analysis also addresses products made from biobased feedstocks. Economic performance in the BEES analysis is measured using the ASTM standard life cycle cost method (ASTM E917), which covers the costs of initial investment, replacement, operation, maintenance and repair, and disposal. The time frame for economic performance extends from the purchase of the product to final disposal. USDA then utilizes the BEES results of individual products within a designated item in its consideration of the life cycle costs at the item level. There is a single unit of comparison associated with each designated item. The basis for the unit of comparison is the ``functional unit,'' defined so that the products compared are true substitutes for one another. If significant differences have been identified in the useful lives of alternative products within a designated item (e.g., if one product lasts twice as long as another), the functional unit will include reference to a time dimension to account for the frequency of product replacement. The functional unit also will account for products used in different amounts for equivalent service. For example, one surface coating product may be environmentally and economically preferable to another on a pound-for- pound basis, but may require twice the mass to cover one square foot of surface, and last half as long, as the other product. To account for these performance differences, the functional unit for the surface coating item could be ``one square foot of application for 20 years'' instead of ``one pound of surface coating product.'' The functional unit provides the critical reference point to which all BEES results for products within an item are scaled. Because functional units vary from item to item, performance comparisons are valid only among products within a designated item. The complete results of the BEES analysis, extrapolated to the item level, for each item proposed for designation in today's proposed rulemaking can be found at http://www.biobased.oce.usda.gov. As discussed above, the BEES analysis includes information on the environmental performance, human health impacts, and economic performance. In addition, ASTM D7505, which manufacturers may use in lieu of the BEES analytical tool, provides similar information. USDA is working with manufacturers and vendors to post this information on the FB4P Web site before a procuring agency asks for it, in order to make the preferred procurement program more efficient. As discussed earlier, USDA has also implemented, or will implement, several other steps intended to educate the manufacturers and other stakeholders on the benefits of this program and the need to post this information, including manufacturer contact information, on the FB4P Web site to make it available to procurement officials. Additional information on specific products within the items proposed for designation may also be obtained directly from the manufacturers of the products. USDA recognizes that information related to the functional performance of biobased products is a primary factor in making the decision to purchase these products. USDA is gathering from manufacturers of biobased products being considered for designation information on industry standard test methods that they are using to evaluate the functional performance of their products. Additional standards are also being identified during meetings of the Interagency Council and during the review process for each proposed rule. We have listed under the detailed discussion of each item proposed for designation (presented in Section IV.B) the functional performance test methods identified during the development of this Federal Register notice for these 10 items. While this process identifies [[Page 47594]] many of the relevant standards, USDA recognizes that the performance test methods identified herein do not represent all of the methods that may be applicable for a designated item or for any individual product within the designated item. As noted earlier in this preamble, USDA is requesting identification of other relevant performance standards and measures of performance. As the program becomes fully implemented, these and other additional relevant performance standards will be available on the FB4P Web site. In gathering information relevant to the analyses discussed above, USDA has made extensive efforts to contact and request information and product samples from representatives of all known manufacturers of products within the items proposed for designation. However, because the submission of information is on a strictly voluntary basis, USDA was able to obtain information and samples only from those manufacturers who were willing voluntarily to invest the resources required to gather and submit the information and samples. USDA used the samples to test for biobased content and the information to conduct the BEES analyses. The data presented are all the data that were submitted in response to USDA requests for information from all known manufacturers of the products within the 10 items proposed for designation. While USDA would prefer to have complete data on the full range of products within each item, the data that were submitted are sufficient to support designation of the items in today's proposed rulemaking. To propose an item for designation, USDA must have sufficient information on a sufficient number of products within an item to be able to assess its availability and its economic and technological feasibility, including its life cycle costs. For some items, there may be numerous products available. For other items, there may be very few products currently available. Given the infancy of the market for some items, it is not unexpected that even single-product items will be identified. Further, given that the intent of section 9002 is largely to stimulate the production of new biobased products and to energize emerging markets for those products, USDA has determined that the identification of two or more biobased products within an item, or even a single product with two or more suppliers, is sufficient to consider the designation of that item. Similarly, the documented availability, benefits, and life cycle costs of even a very small percentage of all products that may exist within an item are also considered sufficient to support designation. B. Items Proposed for Designation USDA uses a model (as summarized below) to identify and prioritize items for designation. Through this model, USDA has identified over 100 items for potential designation under the preferred procurement program. A list of these items and information on the model can be accessed on the USDA biobased program Web site at http://www.biobased.oce.usda.gov . In general, items are developed and prioritized for designation by evaluating them against program criteria established by USDA and by gathering information from other government agencies, private industry groups, and independent manufacturers. These evaluations begin by asking the following questions about the products within an item: Are they cost competitive with non-biobased products? Do they meet industry performance standards? Are they readily available on the commercial market? In addition to these primary concerns, USDA then considers the following points: Are there manufacturers interested in providing the necessary test information on products within a particular item? Are there a number of manufacturers producing biobased products in this item? Are there products available in this item? What level of difficulty is expected when designating this item? Is there Federal demand for the product? Are Federal procurement personnel looking for biobased products? Will an item create a high demand for biobased feed stock? Does manufacturing of products within this item increase potential for rural development? After completing this evaluation, USDA prioritizes the list of items for designation. USDA then gathers information on products within the highest priority items and, as sufficient information becomes available for groups of approximately 10 items, a new rulemaking package will be developed to designate the items within that group. The list of items may change, with items being added or dropped, and the order in which items are proposed for designation is likely to change because the information necessary to designate an item may take more time to obtain than an item lower on the list. In today's proposed rulemaking, USDA is proposing to designate 10 items for the preferred procurement program: 2-Cycle engine oils; lip care products; biodegradable films; stationary equipment hydraulic fluids; biodegradable cutlery; glass cleaners; greases; dust suppressants; carpets; and carpet and upholstery cleaners. USDA has determined that each of these 10 items meets the necessary statutory requirements--namely, that they are being produced with biobased products and that their procurement by procuring agencies will carry out the following objectives of section 9002: To increase demand for biobased products, which would in turn increase demand for agricultural commodities that can serve as feedstocks for the production of biobased products; To spur development of the industrial base through value- added agricultural processing and manufacturing in rural communities; and To enhance the nation's energy security by substituting biobased products for products derived from imported oil and natural gas. Further, USDA has sufficient information on these 10 items to determine their availability and to conduct the requisite analyses to determine their biobased content and their economic and technological feasibility, including life cycle costs. Mature Markets. Section 2902.5(c)(2) of the final guidelines states that USDA will not designate items for preferred procurement that are determined to have mature markets. Mature markets are described as items that had significant national market penetration in 1972. USDA contacted manufacturers, manufacturing associations, and industry researchers to determine if, in 1972, biobased products had a significant market share within any of the items proposed for designation today. USDA found that biobased products within none of the 10 items proposed for designation today had a significant market share in 1972 and that, generally, the companies that produce biobased products within these proposed designated items have been in business for only 10 to 20 years. Overlap with EPA-Designated Recovered Content Products. In today's proposed rule, two of the 10 items may overlap with EPA-designated recovered content products. These two items are: stationary equipment hydraulic fluid and carpets. For these two items, USDA is requesting that certain information on the qualifying biobased products be made available by their manufacturers to assist Federal agencies in determining [[Page 47595]] if an overlap exists between the qualifying biobased product and the applicable EPA-designated recovered content product. As noted earlier in this preamble, USDA is requesting information on overlap situations to further help procuring agencies make informed decisions when faced with purchasing a recovered content material product or a biobased product. As this information is developed, USDA will make it available on the FB4P Web site. Exemptions. When proposing items for preferred procurement under the FB4P, USDA will identify, on an item-by-item basis, items that would be exempt from preferred procurement on the basis of their use in products and systems designed or procured for combat or combat-related missions. USDA believes it is inappropriate to apply the biobased purchasing requirement to tactical equipment unless the Department of Defense has documented that these products can meet the performance requirements for such equipment and are available in sufficient supply to meet domestic and overseas deployment needs. After evaluating these situations for each of the 10 items being proposed for designation, USDA is proposing to exempt 2-cycle engine oils, stationary hydraulic fluids, greases, and dust suppressants from preferred procurement under the FB4P when used in combat or combat-related missions. USDA is proposing an exemption for all designated items when used in spacecraft systems and launch support equipment, because failure of such items could lead to catastrophic consequences. Many, if not all, items that USDA is or is planning to designate for preferred procurement are or will be used in space applications. Frequently, such applications used these items in ways that are different from their more ``conventional'' use on Earth. It is difficult, if not impossible, to forecast what situations may occur when these items are used in space and how they will perform. Therefore, USDA believes is it reasonable to limit the preferred procurement program to items used in more conventional applications and is proposing to exempt all designated items used in space applications from the FB4P. For each item being proposed for exemption, the exemption does not extend to contractors performing work for DoD or NASA. For example, if a contractor is producing a part for use on the space shuttle, the metalworking fluid the contractor uses to produce the part should be biobased (provided it meets the specifications for metalworking). The exemption does apply, however, if the product being purchased by the contractor is for use in combat or combat-related missions or for use in space applications. For example, if the part being produced by the contractor would actually be part of the space shuttle, then the exemption applies. Each of the 10 proposed designated items are discussed in the following sections. 1. 2-Cycle Engine Oils 2-Cycle engine oils are lubricant products formulated to provide clean-burning lubrication, decreased spark plug fouling, reduced deposit formation, and reduced engine wear in 2-cycle gasoline engines (commonly found in lawn and garden equipment, small marine craft, and personal recreational vehicles such as motorcycles and snowmobiles). Biobased 2-cycle engine oils are typically formulated from natural soy, canola, or other seed-based oil feed stocks. For the reasons cited earlier in this notice, USDA is proposing to exempt this item from preferred procurement under the FB4P when used in products and systems designed or procured for combat or combat-related missions and in spacecraft systems and launch support equipment. For biobased 2-cycle engine oils, USDA identified 11 different manufacturers producing 17 individual biobased products. These 11 manufacturers do not necessarily include all manufacturers of biobased 2-cycle engine oils, merely those identified during USDA information gathering activities. Information supplied by these manufacturers indicates that many of these products have been tested against multiple industry performance standards and are being used commercially. While other applicable performance standards may exist, applicable industry performance standards against which these products have been typically tested, as identified by manufacturers of products within this item, include: ASTM D445-04e2, Standard Test Method for Kinematic Viscosity of Transparent and Opaque Liquids (and the Calculation of Dynamic Viscosity); ASTM D93-02a, Standard Test Methods for Flash-Point by Pensky-Martens Closed Cup Tester; ASTM D2896-05 Standard Test Method for Base Number of Petroleum Products by Potentiometric Perchloric Acid Titration; ASTM D97-05, Standard Test Method for Pour Point of Petroleum Products; ASTM D2500-02e1, Standard Test Method for Cloud Point of Petroleum Products; ASTM D4682-87 (2002), Standard Specification for Miscibility with Gasoline and Fluidity of Two-Stroke-Cycle Gasoline Engine Lubricants; CEC-L-33-T82 is comparable to ASTM 5864 and tests for biodegradability; ASTM D2619, Standard Test Method for Hydrolytic Stability of Hydraulic Fluids (Beverage Bottle Method); ASTM D892, Standard Test Method for Foaming Characteristics of Lubricating Oils; ASTM D665, Standard Test Method for Rust-Preventing Characteristics of Inhibited Mineral Oil in the Presence of Water; ASTM D2270, Standard Practice for Calculating Viscosity Index From Kinematic Viscosity at 40 and 100 [deg]C; and International Organization for Standardization ISO GD Surface chemical analysis--Glow discharge optical emission spectrometry (GD-OES). USDA contacted procurement officials with various procuring agencies including the General Services Administration, several offices within the Defense Logistics Agency, the OFEE, USDA Departmental Administration, the National Park Service, EPA, Oak Ridge National Laboratory, and OMB in an effort to gather information on the purchases of 2-cycle engine oils and products within the other nine items proposed for designation today. Communications with these officials lead to the conclusion that obtaining credible current usage statistics and specific potential markets within the Federal government for biobased products within the 10 proposed designated items is not possible at this time. Most of the contacted officials reported that procurement data are reported in higher level groupings of materials and supplies than the proposed designated items. Also, the purchasing of such materials as part of contracted services and with individual purchase cards used to purchase products locally further obscures credible data on purchases of specific products. USDA also investigated the Web site http://www.fedbizopps.gov, a site which lists Federal contract purchase opportunities greater than $25,000. The information provided on this Web site, however, is for broad categories of products rather than the specific types of products that are included in today's rulemaking. Therefore, USDA has been [[Page 47596]] unable to obtain data on the amount of 2-cycle engine oils purchased by procuring agencies. However, Federal agencies routinely perform, or procure contract services such as lawn maintenance services, that utilize small gas powered devices. Thus, they have a need for 2-cycle engine oils and for services that require the use of 2-cycle engine oils. Designation of 2-cycle engine oils will promote the use of biobased products, furthering the objectives of this program. An analysis of the environmental and human health benefits and the life cycle costs of biobased 2-cycle engine oils was performed for three of the products using the BEES analytical tool. Table 1 summarizes the BEES results for the three 2-cycle engine oils. As seen in Table 1, the environmental performance score, which includes human health, ranges from 0.0474 to 0.0661 points per gallon (mixed with fuel and ready to use). The environmental performance score indicates the share of annual per capita U.S. environmental impacts that is attributable to one gallon (mixed with fuel and ready to use) of the product, expressed in 100ths of 1 percent. For example, the total amount of criteria air pollutants emitted in the U.S. in one year was divided by the total U.S. population to derive a ``criteria air pollutants per person value.'' The production and use of one gallon (mixed with fuel and ready to use) of 2-cycle engine oil sample A was estimated to contribute 0.000002 percent of this value. Table 1.--Summary of BEES Results for 2-Cycle Engine Oils ------------------------------------------------------------------------ 2-Cycle engine oils Parameters ----------------------------------------- Sample A Sample B Sample C ------------------------------------------------------------------------ BEES Environmental 0.0474 0.0485 0.0661 Performance--Total Score \1\. Acidification (5%)............ 0.0000 0.0000 0.0000 Criteria Air Pollutants (6%).. 0.0002 0.0002 0.0008 Ecological Toxicity (11%)..... 0.0036 0.0036 0.0092 Eutrophication (5%)........... 0.0017 0.0018 0.0035 Fossil Fuel Depletion (5%).... 0.0200 0.0204 0.0215 Global Warming (16%).......... 0.0060 0.0061 0.0080 Habitat Alteration (16%)...... 0.0000 0.0000 0.0000 Human Health (11%)............ 0.0080 0.0085 0.0103 Indoor Air (11%).............. 0.0000 0.0000 0.0000 Ozone Depletion (5%).......... 0.0000 0.0000 0.0000 Smog (6%)..................... 0.0079 0.0078 0.0122 Water Intake (3%)............. 0.0000 0.0001 0.0006 Economic Performance (Life 2.70 2.95 4.84 Cycle Costs ($)) \2\......... First Cost.................... 2.70 2.95 4.84 Future Cost (3.9%)............ (\3\) (\3\) (\3\) Functional Unit............... 1 gallon (mixed with fuel and ready to use) ------------------------------------------------------------------------ \1\ Numbers in parentheses indicate weighting factor. \2\ Costs are per functional unit. \3\ For this item, no significant/quantifiable performance or durability differences were identified among competing alternative products. Therefore, future costs were not calculated. When evaluating the information presented in Table 1, as well as in the subsequent tables presented in this preamble, it should be noted that comparisons of the environmental performance scores are valid only among products within a designated item. Thus, comparisons of the scores presented in Table 1 and the scores presented in tables for other proposed designated items are not meaningful. The numbers in parentheses following each of the 12 environmental impacts listed in the tables in this preamble indicate weighting factors. The weighting factors represent the relative importance of the 12 environmental impacts, including human health impacts, that contribute to the BEES Environmental Score. They are derived from lists of the relative importance of these impacts developed by the EPA Science Advisory Board for the purpose of advising EPA as to how best to allocate its limited resources among environmental impact areas. Note that a lower Environmental Performance score is better than a higher score. Life cycle costs presented in the tables in this preamble are per the appropriate functional unit for the proposed designated item. Future costs are discounted to present value using the OMB discount rate of 3.9 percent. The life cycle costs of the submitted 2-cycle engine oils range from $2.70 to $4.84 (present value dollars) per gallon (mixed with fuel and ready to use). Present value dollars presented in this preamble represent the sum of all costs associated with a product over a fixed period of time, including any applicable costs for purchase, installation, replacement, operation, maintenance and repair, and disposal. Present value dollars presented in this preamble reflect 2005 dollars. Dollars are expressed in present value terms to adjust for the effects of inflation. The complete results of the BEES analysis, extrapolated to the item level, for each item proposed for designation in today's proposed rulemaking can be found at http://www.biobased.oce.usda.gov . 2. Lip Care Products Lip care products are personal care products formulated to replenish the moisture and/or prevent drying, thereby promoting better skin health of the lips. Biobased lip care products are typically formulated from natural soy or other seed-based oil feed stocks. For the reasons cited earlier in this notice, USDA is proposing to exempt this item from preferred procurement under the FB4P when used in spacecraft systems and launch support equipment. For biobased lip care products, USDA identified 10 different manufacturers producing 28 individual biobased products. These 10 manufacturers do not necessarily include all manufacturers of biobased lip care products, merely those identified during USDA information gathering activities. Information supplied by these manufacturers indicates that these products are typically tested against an [[Page 47597]] industry standard and are being used commercially. While other applicable performance standards may exist, applicable industry performance standards against which these products have been typically tested, as identified by manufacturers of products within this item, include: United States Pharmacopeia (USP) Stability Test. USDA attempted to gather data on the potential market for biobased products within the Federal government as discussed in the section on 2-cycle engine oils. These attempts were largely unsuccessful. However, various Federal agencies procure personal care products for use by their employees. Thus, they have a need for lip care products. Designation of lip care products will promote the use of biobased products, furthering the objectives of this program. An analysis of the environmental and human health benefits and the life cycle costs of biobased lip care products was performed for two of the products using the BEES analytical tool. Table 2 summarizes the BEES results for the two lip care products. As seen in Table 2, the environmental performance score, which includes human health, ranges from 0.1484 to 0.1778 points per case of lip balm (i.e., 2,380 tubes). The environmental performance score indicates the share of annual per capita U.S. environmental impacts that is attributable to one case of the product, expressed in 100ths of 1 percent. Table 2.--Summary of BEES Results for Lip Care Products ------------------------------------------------------------------------ Lip care products Parameters ------------------------- Sample A Sample B ------------------------------------------------------------------------ BEES Environmental Performance--Total Score 0.1484 0.1778 \1\.......................................... Acidification (5%)............................ 0.0000 0.0000 Criteria Air Pollutants (6%).................. 0.0007 0.0010 Ecological Toxicity (11%)..................... 0.0409 0.0447 Eutrophication (5%)........................... 0.0157 0.0101 Fossil Fuel Depletion (5%).................... 0.0412 0.0533 Global Warming (16%).......................... 0.0136 0.0182 Habitat Alteration (16%)...................... 0.0000 0.0000 Human Health (11%)............................ 0.0128 0.0180 Indoor Air (11%).............................. 0.0000 0.0000 Ozone Depletion (5%).......................... 0.0000 0.0000 Smog (6%)..................................... 0.0076 0.0105 Water Intake (3%)............................. 0.0159 0.0220 Economic Performance (Life Cycle Costs($)) \2\ 1,071 2,356 First Cost.................................... 1,071 2,356 Future Cost (3.9%)............................ (\3\) (\3\) Functional Unit............................... one case (2,380 tubes) ------------------------------------------------------------------------ \1\ Numbers in parentheses indicate weighting factor. \2\ Costs are per functional unit. \3\ For this item, no significant/quantifiable performance or durability differences were identified among competing alternative products. Therefore, future costs were not calculated. The life cycle costs of the submitted lip care products range from $1,071 to $2,356 (present value dollars) per case of lip balm. 3. Biodegradable Films Biodegradable films are used in packaging, wrappings, linings, and other similar applications and are capable of meeting ASTM D6400 standards for biodegradability. For the purpose of defining this designated item, biodegradable films do not include films used for agricultural purposes (such as films that would be used to cover fields) and durable films. Durable films will be proposed as a separate item for preferred procurement. For the reasons cited earlier in this notice, USDA is proposing to exempt this item from preferred procurement under the FB4P when used in spacecraft systems and launch support equipment. For biobased biodegradable films, USDA identified 15 different manufacturers producing 45 individual products. These 15 manufacturers do not necessarily include all manufacturers of biobased biodegradable films, merely those identified during USDA information gathering activities. Information supplied by these manufacturers indicates that these products are typically tested against one or more industry performance standards and are being used commercially. While other applicable performance standards may exist, applicable industry performance standards against which these products have been typically tested, as identified by manufacturers of products within this item, include: ASTM D6400, Standard Specification for Compostable Plastics; and Deutsches Institut fur Normung, the German Institute for Standardization DIN V 54900 Standard for testing the compostability of polymeric materials. USDA attempted to gather data on the potential market for biobased products within the Federal government as discussed in the section on 2-cycle engine oils. These attempts were largely unsuccessful. However, Federal agencies routinely procure products, such as trash can liners, leaf collection bags, and packaging materials, that are made from biodegradable films. In addition, many Federal agencies contract for services involving the use of such products. Thus, they have a need for products made from biodegradable films and for services that use products made from biodegradable films. Designation of biodegradable films will promote the use of biobased products, furthering the objectives of this program. An analysis of the environmental and human health benefits and the life cycle costs of biobased biodegradable films was performed for two of the products using the BEES analytical tool. Table 3 summarizes the BEES results for the two biobased biodegradable films. As seen in Table 3, the environmental performance score, which includes human health, ranges from 0.0150 to 0.5682 points per kilogram of biodegradable film. The environmental performance score indicates the share of annual per capita U.S. environmental [[Page 47598]] impacts that is attributable to one kilogram of the product, expressed in 100ths of 1 percent. Table 3.--Summary of BEES Results for Biodegradable Films ------------------------------------------------------------------------ Parameters Sample A Sample B ------------------------------------------------------------------------ BEES Environmental Performance--Total Score 0.5682 0.0150 \1\........................................ Acidification (5%).......................... 0.0001 0.0000 Criteria Air Pollutants (6%)................ 0.0046 0.0001 Ecological Toxicity (11%)................... 0.0277 0.0006 Eutrophication (5%)......................... 0.0330 0.0005 Fossil Fuel Depletion (5%).................. 0.2052 0.0084 Global Warming (16%)........................ 0.0717 0.0020 Habitat Alteration (16%).................... 0.0000 0.0000 Human Health (11%).......................... 0.0893 0.0020 Indoor Air (11%)............................ 0.0000 0.0000 Ozone Depletion (5%)........................ 0.0000 0.0000 Smog (6%)................................... 0.1365 0.0012 Water Intake (3%)........................... 0.0001 0.0002 Economic Performance (Life Cycle Costs($)) 6.60 8.17 \2\........................................ First Cost.................................. 6.60 8.17 Future Cost (3.9%).......................... (\3\) (\3\) Functional Unit............................. one kilogram ------------------------------------------------------------------------ \1\ Numbers in parentheses indicate weighting factor. \2\ Costs are per functional unit. \3\ For this item, no significant/quantifiable performance or durability differences were identified among competing alternative products. Therefore, future costs were not calculated. The life cycle cost of the submitted biodegradable films was $6.60 to $8.17 (present value dollars) per kilogram of biodegradable film. 4. Stationary Equipment Hydraulic Fluids Stationary equipment hydraulic fluids are hydraulic fluid products formulated for use in the hydraulic systems of stationary equipment. Products in this item act as a mechanical power transmission medium to replace mineral oils and to provide wear, rust, and oxidation protection for machine tools and equipment. Biobased stationary hydraulic fluids are typically formulated from natural soy, canola, or other seed oil-based feed stocks. Qualifying products within this item may overlap with the EPA- designated recovered content product: Re-refined lubricating oils. For the reasons cited earlier in this notice, USDA is proposing to exempt this item from preferred procurement under the FB4P when used in products and systems designed or procured for combat or combat-related missions and in spacecraft systems and launch support equipment. For biobased stationary equipment hydraulic fluids, USDA identified 20 different manufacturers producing 66 individual biobased products. These 20 manufacturers do not necessarily include all manufacturers of biobased stationary equipment hydraulic fluids, merely those identified during USDA information gathering activities. Information supplied by these manufacturers indicates that many of these products have been tested against multiple industry performance standards and are being used commercially. While other applicable performance standards may exist, applicable industry performance standards against which these products have been typically tested, as identified by manufacturers of products within this item, include: ASTM D1122-97a(2002), Standard Test Method for Density or Relative Density of Engine Coolant Concentrates and Engine Coolants By The Hydrometer; ASTM D1298-99e2, Standard Test Method for Density, Relative Density (Specific Gravity), or API Gravity of Crude Petroleum and Liquid Petroleum Products by Hydrometer Method; ASTM D130-04, Standard Test Method for Corrosiveness to Copper from Petroleum Products by Copper Strip Test; ASTM D1401-02, Standard Test Method for Water Separability of Petroleum Oils and Synthetic Fluids; ASTM D1500-04a, Standard Test Method for ASTM Color of Petroleum Products (ASTM Color Scale); ASTM D2266-01, Standard Test Method for Wear Preventive Characteristics of Lubricating Grease (Four-Ball Method); ASTM D2270-04, Standard Practice for Calculating Viscosity Index From Kinematic Viscosity at 40 and 100 [deg]C; ASTM D2272-02, Standard Test Method for Oxidation Stability of Steam Turbine Oils by Rotating Pressure Vessel; ASTM D2532-03, Standard Test Method for Viscosity and Viscosity Change After Standing at Low Temperature of Aircraft Turbine Lubricants; ASTM D2619-95(2002)e1, Standard Test Method for Hydrolytic Stability of Hydraulic Fluids (Beverage Bottle Method); ASTM D287-92(2000)e1, Standard Test Method for API Gravity of Crude Petroleum and Petroleum Products (Hydrometer Method); ASTM D2983-04a, Standard Test Method for Low-Temperature Viscosity of Lubricants Measured by Brookfield Viscometer; ASTM D4052-96(2002)e1, Standard Test Method for Density and Relative Density of Liquids by Digital Density Meter; ASTM D4172-94(2004), Standard Test Method for Wear Preventive Characteristics of Lubricating Fluid (Four-Ball Method); ASTM D445-04e2, Standard Test Method for Kinematic Viscosity of Transparent and Opaque Liquids (and the Calculation of Dynamic Viscosity); ASTM D567-53(1955), Method for Calculating Viscosity Index (Withdrawn 1966); ASTM D5864-00, Standard Test Method for Determining Aerobic Aquatic Biodegradation of Lubricants or Their Components; and ASTM D665-03, Standard Test Method for Rust-Preventing [[Page 47599]] Characteristics of Inhibited Mineral Oil in the Presence of Water. USDA attempted to gather data on the potential market for biobased products within the Federal government as discussed in the section on 2-cycle engine oils. These attempts were largely unsuccessful. However, Federal agencies routinely own and operate stationary equipment with hydraulic cylinders. In addition, many Federal agencies contract for services involving the use of such equipment. Thus, they have a need for stationary equipment hydraulic fluids and for services that require the use of stationary equipment hydraulic fluids. Designation of stationary equipment hydraulic fluids will promote the use of biobased products, furthering the objectives of this program. An analysis of the environmental and human health benefits and the life cycle costs of stationary equipment hydraulic fluids was performed for two of the products using the BEES analytical tool. Table 4 summarizes the BEES results for the two stationary equipment hydraulic fluids. As seen in Table 4, the environmental performance score, which includes human health, ranges from 0.0042 to 0.0524 points per gallon of hydraulic fluid. The environmental performance score indicates the share of annual per capita U.S. environmental impacts that is attributable to one gallon of hydraulic fluid, expressed in 100ths of 1 percent. Table 4.--Summary of BEES Results for Stationary Equipment Hydraulic Fluids ------------------------------------------------------------------------ Stationary equipment hydraulic fluids Parameters --------------------------- Sample A Sample B ------------------------------------------------------------------------ BEES Environmental Performance--Total Score 0.0042 0.0524 \1\........................................ Acidification (5%).......................... 0.0000 0.0000 Criteria Air Pollutants (6%)................ 0.0000 0.0002 Ecological Toxicity (11%)................... 0.0012 0.0093 Eutrophication (5%)......................... 0.0002 0.0181 Fossil Fuel Depletion (5%).................. 0.0012 0.0063 Global Warming (16%)........................ 0.0008 0.0054 Habitat Alteration (16%).................... 0.0000 0.0000 Human Health (11%).......................... 0.0004 0.0012 Indoor Air (11%)............................ 0.0000 0.0000 Ozone Depletion (5%)........................ 0.0000 0.0000 Smog (6%)................................... 0.0002 0.0045 Water Intake (3%)........................... 0.0002 0.0074 Economic Performance (Life Cycle Costs ($)) 10.45 8.75 \2\........................................ First Cost.................................. 10.45 8.75 Future Cost (3.9%).......................... (\3\) (\3\) Functional Unit............................. one gallon ------------------------------------------------------------------------ \1\ Numbers in parentheses indicate weighting factor. \2\ Costs are per functional unit. \3\ For this item, no significant/quantifiable performance or durability differences were identified among competing alternative products. Therefore, future costs were not calculated. The life cycle cost of the submitted stationary equipment hydraulic fluids range from $8.75 to $10.45 (present value dollars) per gallon of hydraulic fluid. 5. Biodegradable Cutlery Biodegradable cutlery is a group of products that is used as hand- held, disposable utensils designed