Voluntary Labeling Program for Biobased Products, 38296-38317 [E9-17610]

Agencies

• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 74, Number 146 (Friday, July 31, 2009)]
[Proposed Rules]
[Pages 38296-38317]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-17610]



[[Page 38295]]

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Part III





Department of Agriculture





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7 CFR Part 2904



Voluntary Labeling Program for Biobased Products; Proposed Rule

Federal Register / Vol. 74 , No. 146 / Friday, July 31, 2009 / 
Proposed Rules

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DEPARTMENT OF AGRICULTURE

7 CFR Part 2904

RIN 0503-AA35


Voluntary Labeling Program for Biobased Products

AGENCY: Departmental Administration, USDA.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The U.S. Department of Agriculture (USDA) is proposing to 
establish a voluntary labeling program for biobased products under 
section 9002 of the Farm Security and Rural Investment Act of 2002, as 
amended by the Food, Conservation, and Energy Act of 2008. Under the 
proposed labeling program, a biobased product, after being certified by 
USDA, could be marketed using the ``USDA Certified Biobased Product'' 
label. The presence of the label will mean that the product meets USDA 
standards for the amount of biobased content and that the manufacturer 
or vendor has provided relevant information on the product for the USDA 
BioPreferred Web site. The proposed rule applies to manufacturers and 
vendors who wish to participate in the voluntary labeling program. The 
proposed rule also applies to other entities (e.g., trade associations) 
that wish to use the label to promote biobased products.

DATES: USDA will accept public comments on this proposed rule until 
September 29, 2009.

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-AA35. 
Also, please identify submittals as pertaining to the ``Proposed 
Voluntary Labeling Program.''
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail/commercial/hand delivery: Mail or deliver your 
comments to: Ron Buckhalt, USDA, Office of the Assistant Secretary for 
Administration, Room 342, Reporters Building, 300 Seventh Street, SW., 
Washington, DC 20024.
     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) 690-0942 (TTY).
    You may also send comments on the information collection aspects of 
this rule directly to the Office of Information and Regulatory Affairs 
of OMB, Attention: Desk Officer for Agriculture, Margaret Malanoski, 
725 17th Street, NW., Room 10202, Washington, DC 20503. Comments should 
reference OMB control number 0503-NEW.

FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of the 
Assistant Secretary for Administration, Room 342, Reporters Building, 
300 Seventh Street, SW., Washington, DC 20024; e-mail: 
biopreferred@usda.gov; phone (202) 205-4008. Information regarding the 
Federal Procurement Program of Biobased Products (one part of the 
BioPreferred Program) is available on the Internet at https://www.biopreferred.gov.

SUPPLEMENTARY INFORMATION: The information presented in this preamble 
is organized as follows:

I. Background
    A. Authority
    B. Overview of Section 9002
II. Purposes of the Voluntary Labeling Program
III. Voluntary Labeling Program
    A. Applicability
    B. Criteria for Obtaining Certification
    C. Initial Approval Process
    D. Appeals
    E. Information Posted on Web Site
    F. Applications for Reformulated Products
    G. Requirements Associated With the Label
    H. Violations
    I. Recordkeeping Requirements
    J. Reporting
IV. Suggested Comment Topics
V. 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 13132: Federalism
    E. Unfunded Mandates Reform Act of 1995
    F. Executive Order 12372: Intergovernmental Review of Federal 
Programs
    G. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    H. Paperwork Reduction Act
    I. Government Paperwork Elimination Act Compliance
    J. Small Business Regulatory Enforcement Fairness Act

I. Background

A. Authority

    The voluntary labeling program for biobased products is proposed 
under the authority of section 9002 of the Farm Security and Rural 
Investment Act of 2002 (FSRIA)(referred to in this preamble as 
``section 9002''), as amended by the Food, Conservation, and Energy Act 
of 2008 (FCEA), 7 U.S.C. 8102.

B. Overview of Section 9002

    Section 9002 establishes a program for the Federal procurement of 
biobased products by Federal agencies and a voluntary program for the 
labeling of biobased products. These two programs, which are referred 
to collectively by USDA as the BioPreferred\SM\ Program, are briefly 
discussed below.
    Federal Procurement of Biobased Products. Section 9002 requires 
Federal agencies to develop procurement programs that give preference 
to the purchase of biobased products (hereafter referred to in this 
Federal Register notice as the ``preferred procurement program''). 
Federal agencies and their contractors are required to purchase 
biobased products, as defined in regulations implementing the statute, 
that are within designated items \1\ when the cumulative purchase price 
of the procurement item(s) procured is more than $10,000 or when the 
quantities of functionally equivalent items purchased over the 
preceding fiscal year equaled $10,000 or more. Each Federal agency and 
contractor must procure biobased products at the highest content levels 
within each designated item unless the agency determines that the items 
are not reasonably available, fail to meet applicable performance 
standards, or are available only at an unreasonable price.
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    \1\ The term ``designated item'' refers to items (generic 
groupings of specific products that perform the same function) that 
have been afforded preferred procurement by Federal agencies under 
the BioPreferred Program.
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    The final guidelines for the preferred procurement program were 
published in the Federal Register on January 11, 2005 (70 FR 1792). The 
guidelines are contained in 7 CFR part 2902, ``Guidelines for 
Designating Biobased Products for Federal Procurement.''
    Part 2902 is divided into two subparts, ``Subpart A--General,'' and 
``Subpart B--Designated Items.'' Subpart A addresses the purpose and 
scope of the guidelines and their applicability, provides guidance on 
product availability and procurement, defines terms used in part 2902, 
and addresses affirmative procurement programs and USDA funding for 
testing. Subpart B identifies designated items and specifies their 
minimum biobased contents, the effective date of the procurement 
preference for biobased products within each designated item, and other 
information (e.g., biodegradability). USDA is responsible for 
designating biobased items at the highest practicable biobased content 
levels for the Federal agencies' preferred procurement programs.

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    As part of the preferred procurement program, section 9002 also 
requires USDA to provide information to Federal agencies on the 
availability, relative price, performance, and environmental and public 
health benefits of products within such items and, as applicable under 
section 9002(e)(1)(C), to recommend the minimum level of biobased 
content to be contained in the products within a designated item.
    To date, USDA has designated 33 items used in a variety of 
applications, including cafeteria ware, personal and institutional 
cleaning products, construction products, and lubricants and greases.
    Voluntary Labeling Program. Section 9002 also requires USDA to 
establish a voluntary labeling program under which USDA authorizes 
manufacturers and vendors of biobased products to use a ``USDA 
Certified Biobased Product'' label (hereafter referred to in this 
preamble as ``the label''). The voluntary labeling program is intended 
to encourage the purchase and use of biobased products by reaching 
beyond the Federal purchasing community and promoting the purchase of 
biobased products by the general public. In establishing this program, 
USDA must identify the criteria to determine those products on which 
the label may be used and must develop specific requirements for how 
the label can be used. It is USDA's intent that the presence of the 
label on a product will mean that the labeled product is one for which 
credible factual information is available as to the biobased content, 
consistently measured across labeled products by use of the ASTM 
radioisotope test D6866.
    In developing the proposed voluntary labeling program, USDA held 
discussions with other agencies that have implemented labeling 
programs, such as the ``ENERGY STAR[supreg]'' program implemented by 
the U.S. Department of Energy and the U.S. Environmental Protection 
Agency (EPA). USDA has also consulted with representatives of the 
Department of Agriculture's National Organic program and others of the 
Agricultural Marketing Service. Further, USDA consulted the Federal 
Trade Commission, which issues the ``Guides for the Use of 
Environmental Marketing Claims'' to ensure that the provisions of the 
proposed voluntary labeling program were consistent with the Guides. 
USDA also held a public meeting on July 22, 2008, to seek input on the 
content and use of the label from the public and industry stakeholders.
    The following section of the preamble presents the goal of the 
voluntary labeling program and the objectives toward achieving that 
goal. That section is followed by a summary of the voluntary labeling 
program that USDA is proposing to implement under section 9002(h).

II. Goal of the Voluntary Labeling Program

    USDA's goal in proposing this voluntary labeling program is to 
encourage the increased use of biobased products in all market sectors. 
To achieve this goal, USDA has identified the following objectives:
    Promotion of biobased products. The voluntary labeling program is 
intended to promote and increase the use of biobased products. In 
general, the labeling program supports this goal by recognizing 
manufacturers and vendors that produce and market products that utilize 
biobased materials and by encouraging consumers to purchase such 
products.
    Whereas the preferred procurement program is specific to Federal 
agencies, the voluntary labeling program is intended to encompass all 
individuals and organizations making purchasing decisions. We are 
proposing that there be two slightly different versions of the label, 
one for those biobased products that have been designated for Federal 
preferred procurement because they are within a designated item, and 
another for those products that are not within a designated item. The 
label artwork for products within designated items would include the 
letters ``FP'' to indicate that they are Federally preferred. USDA 
believes that informing consumers that these products have been 
designated for Federal preferred procurement will be beneficial. As 
part of the process of designating items for preferred procurement, 
USDA gathers and evaluates information regarding the biobased product's 
life cycle costs and environmental performance as well as functional 
performance. Thus, the ``FP'' on the label will inform consumers that 
USDA has evaluated representative products within the designated item 
and found them to be qualified for the Federal preferred procurement 
program. USDA also notes that the identification of products that have 
been designated for preferred procurement would also be accomplished by 
listing those products on the USDA Web site and in Federal procurement 
catalogues.
    Furthermore, the voluntary labeling program will increase the 
amount of information available to manufacturers whose products may 
utilize biobased materials or products as a component of their finished 
products or as part of their manufacturing process. USDA expects that 
this increased information will encourage these manufacturers to 
consider using and/or increasing the amount of biobased materials when 
designing or manufacturing their products, thereby further increasing 
the purchase of biobased materials. For example, manufacturers of 
equipment that uses hydraulic fluids are encouraged to consider the use 
of biobased hydraulic fluids if available information indicates that 
the performance of these fluids meets or exceeds their requirements.
    Increase public awareness of biobased products. The voluntary 
labeling program will raise the visibility of biobased products within 
the Federal government and within the commercial marketplace. The 
labeling program will also provide a unique and identifiable designator 
recognized in the U.S. and foreign markets.
    To the extent that the voluntary labeling program achieves these 
objectives, there may be an increased purchase of biobased products, 
which is then expected to reduce petroleum consumption, increase the 
use of renewable resources, better manage the carbon cycle, and, may 
contribute to reducing adverse environmental and health impacts. The 
program is also expected to promote economic development for biobased 
product manufacturers and vendors by creating new jobs and providing 
new markets for farm commodities.

III. Voluntary Labeling Program

    In developing the voluntary labeling program, USDA has one primary 
goal--to encourage the purchase of biobased products. In implementing 
this goal, USDA aims to ensure that only biobased products that meet 
the criteria set forth in the voluntary labeling program are labeled 
with the ``USDA Certified Biobased Product'' label and that the label 
is used properly. USDA believes that products carrying the label will 
become readily recognizable as biobased products, distinct from those 
that do not carry the label. Further, as the label will have the 
percent of biobased material printed on it, consumers will recognize 
that products carrying the label meet certain criteria that set them 
apart from other products.

A. Applicability

    The proposed rule would apply to manufacturers and vendors of 
biobased products, as well as to other entities (e.g., trade 
associations, public interest groups) that promote, sell, or use the 
products. USDA believes that each of these groups must comply with the 
labeling requirements in order to ensure that only certified biobased 
products

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(i.e., biobased products that have been approved for use of the label 
under this program) carry the label and that the label is used 
correctly. USDA believes that the goals of the voluntary labeling 
program can be achieved, and the beneficial impacts of the BioPreferred 
program can be increased, if manufacturers, vendors, and other entities 
are allowed to market and promote the manufacturers' biobased products 
with a credible biobased products labeling program.
    Once USDA has approved a biobased product for labeling by its 
manufacturer or vendor, an equally important aspect in ensuring the 
integrity of the labeling program is the proper use of the label. Label 
misuse can occur at the manufacturer level (e.g., affixing the label to 
a non-certified biobased product) and at the retail level (e.g., using 
the label to imply that a non-certified biobased product has been 
certified), or by other entities wishing to use the label in promoting 
the sales or public awareness of non-certified biobased products (e.g., 
on a Web site or in promotional materials).
    While the labeling of biobased products is voluntary, 
manufacturers, vendors, and other entities wishing to use the label in 
their marketing, promotional, or educational efforts would be required 
to comply with regulatory requirements as proposed herein. USDA 
believes these requirements for use of the label are necessary to avoid 
misleading consumers regarding whether a product has been certified by 
USDA under the voluntary labeling program.

B. Criteria for Obtaining Certification

    To be eligible for USDA certification to use the label, USDA 
proposes that a product meet two criteria, as discussed below.
    Criterion 1: Biobased Product. The product must be a biobased 
product. Biobased product is defined in section 2904.2 of today's 
proposed rule as follows: ``The term `biobased product' means a product 
determined by the Secretary to be a commercial or industrial product 
(other than food or feed) that is--(A) composed, in whole or in 
significant part, of biological products, including renewable domestic 
agricultural materials and forestry materials; or (B) an intermediate 
ingredient or feedstock. For the purposes of this subpart, the term 
`biobased product' does not include motor vehicle fuels, heating oil, 
electricity produced from biomass, or any mature market products. 
Products from a mature market will be determined on a case-by-case 
basis.''
    Rationale for Criterion 1: As discussed earlier, section 9002 
requires USDA to establish a voluntary labeling program under which 
USDA authorizes manufacturers and vendors of biobased products to use a 
``USDA Certified Biobased Product'' label. USDA is proposing that 
mature market products not be eligible to use the label except on a 
case-by-case basis. Mature market products are those biobased products 
that had significant national market penetration in 1972. Examples of 
mature market products include cotton shirts or towels, paper plates, 
and wood furniture. USDA has excluded mature market products from the 
Federal preferred procurement program. In USDA's explanation for 
excluding mature market products from the preferred procurement 
program, USDA stated in the preamble to the final Guidelines (70 FR 
1802), ``The intent of section 9002, as described in the conference 
report accompanying FSRIA, `is to stimulate the production of new 
biobased products and to energize emerging markets for those products.' 
''
    Based on conference report, it is clear that Congress did not 
intend for mature market products to be given Federal procurement 
preference. It is not clear, however, whether this exclusion of mature 
market products was intended to apply to the voluntary labeling 
program. The procurement preference program and the labeling program 
are contained in different paragraphs of the statute, and the 
conference report does not specifically state whether the language 
quoted above refers to just one or to both paragraphs.
    USDA believes, however, that the widespread labeling of mature 
market products could negatively impact the entry of new biobased 
products into market segments in which mature products already have 
significant market shares. Thus, USDA believes that it is reasonable to 
exclude many mature market products from the labeling program, as it 
has done for the preferred procurement program. USDA is, however, 
proposing to allow manufacturers of mature market products to appeal 
(on a case-by-case basis) the exclusion of their products from the 
program.
    Criterion 2: Minimum Biobased Content. For a biobased product to 
receive certification under this proposed rule, the biobased content of 
that product must be at or above its applicable minimum biobased 
content, as described below. USDA believes this requirement is 
necessary so that the label is not used to promote products with de 
minimis biobased content. As discussed below, the applicable minimum 
biobased content depends under which of the three proposed categories 
the product falls.
    1. Biobased products within one or more designated items. If a 
biobased product (including an intermediate ingredient or feedstock) is 
within a designated item at the time of submitting an application for 
certification, the applicable minimum biobased content for use of the 
label would be the minimum biobased content specified for that item in 
7 CFR 2902. As discussed in more detail below, once an item has been 
designated, its minimum biobased content, as specified in 7 CFR part 
2902, becomes the applicable minimum biobased content for all products 
within that designated item, regardless of any previous minimum 
biobased content used to qualify a product for using the label.
    If a biobased product is marketed within more than one designated 
item, and uses the same packaging, its biobased content must meet or 
exceed the specified minimum biobased content for each of the 
designated items in order to use the label for each item. For example, 
Product A is currently marketed as a ``glass cleaner'' and a ``bath and 
tile cleaner'' and uses the same packaging in both markets. USDA has 
designated both these categories of products as items under its 
BioPreferred procurement program. Product A has a biobased content of 
60 percent. The minimum biobased content of designated item ``glass 
cleaners'' is 49 percent and the minimum biobased content of designated 
item ``bath and tile cleaners'' is 74 percent. The manufacturer would 
not be eligible to apply for use of the label for Product A under 
either designated item. If the biobased content of Product A were 
instead 80 percent, the manufacturer would be eligible to use the label 
under both designated items.
    If, on the other hand, the manufacturer packaged the product in 
different packaging for marketing within the two designated items 
(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 would 
be eligible to apply to use the label while the product marketed as 
bath and tile cleaner would not be eligible.
    2. Finished biobased products that are not within designated items. 
If a biobased product is not within a designated item at the time the 
application for certification is submitted, the applicable minimum 
biobased content for the product for using the label would be 51 
percent,

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unless USDA approves an alternative applicable minimum biobased 
content. The proposed rule would allow manufacturers, vendors, and 
trade associations (individually or collectively) who believe that the 
51 percent minimum biobased content is not appropriate for the biobased 
product to conduct an analysis, as discussed under ``Alternative 
Minimum Biobased Content Analysis'' later in this preamble, to support 
an alternative applicable minimum biobased content. If USDA approves 
the alternative applicable minimum biobased content, then that content 
becomes the applicable minimum biobased content for that product.
    USDA recognizes that there will be groups of biobased products that 
will be certified to use the label that will never be designated for 
preferred procurement, primarily because these products are produced by 
only one manufacturer and, thus, there is not sufficient market 
competition to justify preferred procurement or they are not used 
prevalently in the Federal marketplace. However, USDA expects that the 
majority of the biobased products certified to use the label will be 
within a group of products that USDA designates for preferred 
procurement. In those cases where USDA subsequently designates an item 
under which the certified biobased product falls for inclusion in the 
preferred procurement program, the applicable minimum biobased content 
for the product will then become the minimum biobased content 
established for the designated item under which the product falls. As 
of the effective date of the designation, only those products that meet 
the new minimum biobased content may continue to use the label.
    3. Products that are intermediate ingredients or feedstocks that 
are not within designated items. If a biobased product is an 
intermediate ingredient or feedstock and is not within a designated 
item at the time the application for certification is submitted, the 
applicable minimum biobased content for the product for using the label 
would be 51 percent, unless USDA approves an alternative applicable 
minimum biobased content. As with the previous product category, the 
proposed rule would allow manufacturers, vendors, and trade 
associations (individually or collectively) who believe that the 51 
percent minimum biobased content is not appropriate to conduct an 
analysis, as discussed under ``Alternative Minimum Biobased Content 
Analysis'' later in this preamble, to support an alternative applicable 
minimum biobased content. If USDA approves the alternative applicable 
minimum biobased content, then that content becomes the applicable 
minimum biobased content for that product.
    Rationale for Criterion 2: USDA believes setting the applicable 
minimum biobased content of products within designated items at the 
minimum biobased content specified under the preferred procurement 
program is appropriate, as USDA has had an opportunity to perform an 
analysis on these products, including identifying similar biobased 
products and their manufacturers, and obtaining biobased contents for 
similar biobased products. USDA intends to proceed with the designation 
of numerous items for which it has, or is currently gathering, 
information. Once the designation process has been completed for those 
items that have been identified for designation, USDA intends to 
revisit, on a periodic basis, the minimum biobased content that was 
established for designated items at the time of their designation. As 
scientific advances and economic conditions warrant, USDA would expect 
that the applicable minimum biobased content for designated items will 
rise as competitors apply advances and increase the biobased content of 
designated products. Thus, it is USDA's expectation that the applicable 
minimum biobased content of designated items will increase as 
advancements are made in biobased product technology. USDA also notes 
that proposed revisions to the applicable minimum biobased content for 
designated items will be announced in the Federal Register and the 
public will have an opportunity to provide comments on the proposal.
    For the second and third categories of products (finished biobased 
products and intermediate ingredients and feedstocks that are not 
within designated items) USDA considered several options for setting 
the minimum biobased content, including the use of the lowest minimum 
biobased content for any item designated to date. USDA decided, 
however, that in the absence of the level of detailed product 
information for setting a minimum biobased content based on product-
specific data (as is used under the preferred procurement program), and 
in an effort to discourage minimal use of biobased feedstocks in what 
are otherwise not biobased products, it is reasonable to consider such 
finished products as ``biobased'' if they contain a significant amount 
of biobased materials; that is, at least 51 percent of the product is 
biobased. Thus, USDA is proposing that all finished products that are 
not within designated items and all intermediate ingredients and 
feedstocks that are not within designated items must contain at least 
51 percent biobased content to be qualified for the label.
    USDA recognizes, however, that for some finished products (and 
intermediate ingredients) a 51 percent minimum biobased content may 
result in a product that is not viable. USDA also recognizes that the 
51 percent minimum biobased content could discourage the development of 
new biobased products or the continued development of existing biobased 
products. With this in mind, USDA will continue to gather product-
specific data under the preferred procurement program to determine 
applicable minimum biobased contents. Additionally, USDA believes that 
it is reasonable to provide a procedure to allow manufacturers, 
vendors, and trade associations to propose an alternative applicable 
minimum biobased content for such products.
Alternative Minimum Biobased Content Analysis
    As noted above, manufacturers, vendors, and trade associations 
would be allowed to propose an alternative minimum biobased content for 
products not within a designated item if they believe that the proposed 
minimum biobased content is not appropriate for their product(s). For 
USDA to consider an alternative minimum biobased content for these 
types of products, manufacturers, vendors, and trade associations would 
be required to develop an analysis, in consultation with USDA, that 
demonstrates the need for an alternative applicable minimum biobased 
content. USDA believes that manufacturers, vendors, and trade 
associations should consult with the Department in developing the 
analysis to help ensure that an appropriate analysis is conducted.
    While the analysis of the data supporting a specific request for an 
alternative minimum biobased content will be performed on a case-by-
case basis, USDA anticipates that the evaluation process will be 
standardized and will be similar to the process used to set minimum 
biobased contents under the preferred procurement program. Such a 
process would include identifying similar biobased products and their 
manufacturers and determining biobased contents for similar biobased 
products. USDA recognizes the difficulties involved in collecting 
biobased contents, due in large part to the unpredictability of 
manufacturer and vendor participation

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in providing products for testing. Similar to the process used in the 
preferred procurement program, the establishment of alternative minimum 
contents for the labeling program will require a measure of flexibility 
to address the variability in product type and level of industry 
development. In general, the number of samples that should be obtained 
for the biobased content analysis would depend on the number of 
manufacturers of a product and similar products available. USDA would 
expect applicants to coordinate with program officials to identify and 
agree upon a reasonable number of samples for the analysis. Emphasis 
would be focused on obtaining the maximum number of samples possible 
without restricting the analysis process.

C. Initial Approval Process

Application
    Manufacturers and vendors seeking use of the label on a qualified 
biobased product must submit to USDA a separate USDA-approved 
application for certification for each product for which the 
manufacturer or vendor wishes to receive USDA approval to use the 
label. Both the application and instructions for submittal of the 
application will be available on the USDA BioPreferred Web site.
    Each application must contain both contact and product information. 
Contact information would include the applicant's name, mailing 
address, e-mail address, and telephone number, and the name, mailing 
address, telephone number, and e-mail address (if available) of the 
person who prepared the application.
    Product information would include the brand names or other product 
identifying information (such as model name or number, or UPC number) 
for the product, the biobased content of the product for which 
certification is sought, contact information on the third-party testing 
entity that tested the biobased content and documentation that the 
testing entity is ISO 9001 conformant, the product category under which 
the product falls, and the intended uses of the product. If the product 
falls within a designated item(s), the applicant would also identify 
the name of the designated item(s).
    Lastly, the applicant would be required to sign a statement that 
certifies that the product identified in the application is a biobased 
product as defined in the labeling program and commits the applicant to 
provide to USDA, and to keep up-to-date, the product's brand name(s), 
or other identifying information; contact information, including the 
name, mailing address, e-mail address, and telephone number of the 
applicant; the biobased content of the product; and a hot link directly 
to the applicant's Web site (if available). USDA is also requiring that 
if manufacturers make claims on the product packaging about the 
environmental and human health effects, life-cycle costs, 
sustainability benefits, and performance of their products that 
documentation supporting such claims be maintained.
Justification for Required Information
    USDA considers the information required for the initial approval 
process to be the minimum that will be needed by USDA to confirm that 
products meet the criteria for certification. The following paragraphs 
summarize the rationale for requiring the information specified.
    Contact Information. This information is necessary for 
communicating with the applicant concerning any issues with the 
application, whether the application is deficient, and whether the 
application has been approved.
    Brand Names. Because a manufacturer or vendor may market the same 
product under different brand names (or other product identifiers such 
as model names or numbers), the application requires that all brand 
names or other applicable product identifiers for that product be 
provided. This will prevent the necessity of multiple applications from 
the same manufacturer or vendor for the same product.
    Biobased Content Information. For products in the three categories 
discussed earlier, the biobased content of the product for which 
certification is sought would be determined by ISO 9001 certified or 
conformant,\2\ third-party testing firms using ASTM Method D6866, 
``Standard Test Methods for Determining the Biobased Content of Natural 
Range Materials Using Radiocarbon and Isotope Ratio Mass Spectrometry 
Analysis.''
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    \2\ ISO 9001 conformant means that the entity meets the 
requirements of ISO 9001, but is not required to be ISO 9001 
certified.
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    In the case of a product that is marketed under different brand 
names, the proposed rule would allow the manufacturer or vendor to test 
the product once rather than requiring brand-name specific data, 
thereby minimizing unnecessary testing of the same product that is 
simply marketed under different brand names.
    The applicant is required to provide the product's biobased 
content, as determined using ASTM Method D6866, and contact information 
on the entity that performed the testing. The applicant is also 
required to provide documentation that the third-party testing entity 
that determined the biobased content reported for the product is ISO 
9001 conformant. This information is necessary to demonstrate that the 
product's biobased content meets or exceeds the applicable minimum 
biobased content and that a qualified, independent, third-party testing 
entity conducted the testing.
    Product Category. The applicant is required to identify whether the 
product (1) falls within one or more designated items under the 
preferred procurement program (and if so, the applicant is required to 
identify the item(s)), (2) is a finished biobased product that is not 
within a designated item, or (3) is an intermediate ingredient or 
feedstock that is not within a designated item. This information is 
necessary to identify the applicable minimum biobased content and then 
to ensure that the biobased content of the product meets or exceeds the 
applicable minimum biobased content.
    Intended use(s). The applicant is required to provide a description 
of the intended uses of the product (e.g., as a glass cleaner or as a 
penetrating lubricant). USDA will use this description to confirm that 
the product is assigned to the appropriate designated item(s), if 
applicable. This will also allow USDA to determine if a product should 
have been assigned to a designated item, if the application incorrectly 
indicates that the product falls outside the designated item category.
    Certifications and statements. The applicant must certify that the 
product for which certification is sought is a biobased product, as 
defined by the labeling program. USDA is proposing that applicants 
certify to this criterion and keep appropriate records to demonstrate 
that the product complies with this certifying statement, which USDA 
can then review during an audit. This condition must be met in order to 
ensure compliance with statutory requirements under which the voluntary 
labeling program is being established.
    As noted earlier in this preamble, the applicant is also required 
to commit to providing to USDA information, and keeping it up-to-date, 
for posting by USDA on the BioPreferred Web site. This information 
includes the product's brand name(s) or other product identifiers; 
contact information, including the name, mailing address, e-mail 
address, and telephone number of the applicant; biobased content; and a

[[Page 38301]]

hot link directly to the applicant's Web site (if available).
    While USDA is not requiring manufacturers to analyze the 
environmental and human health effects, life-cycle costs, 
sustainability benefits, and performance of their products, 
manufacturers making claims regarding these attributes of their 
products must maintain documentation to substantiate those claims 
pursuant to the Federal Trade Commission (FTC) Act. Section 5 of the 
FTC Act (15 U.S.C. 45) makes unlawful deceptive acts and practices in 
or affecting commerce. The FTC ``Guides for the Use of Environmental 
Marketing Claims'' (16 CFR part 260) state that ``any party making an 
express or implied claim that presents an objective assertion about the 
environmental attribute of a product, package or service must, at the 
time the claim is made, possess and rely upon a reasonable basis 
substantiating the claim.''
Evaluation
    USDA will evaluate each application to determine if it is a 
``complete'' application (i.e., that it contains all of the required 
information). If USDA determines that the application is not complete, 
it will return the application to the applicant and provide an 
explanation of the deficiencies in the application. Once the 
deficiencies have been addressed, the applicant may resubmit the 
application for review by USDA.
    USDA will evaluate each complete application to determine if the 
product meets the criteria for certification discussed above (and 
specified in Sec.  2904.4). There will be no specified deadline for 
application submissions; applications will be worked on in a first come 
first serve basis. Based on this evaluation, USDA either will 
conditionally approve the application or will disapprove the 
application. USDA will provide to each applicant a written response 
within 60 days after the receipt of a complete application, informing 
the applicant whether or not its application has been conditionally 
approved or has been disapproved. An applicant who receives notice from 
USDA that its application has been conditionally approved may not begin 
using the label on its product until the applicant receives a notice of 
certification from USDA (see next paragraph). For those applications 
that are not approved, USDA will notify the applicant and identify each 
criterion not met. Applicants whose applications are not approved have 
the right to appeal under the proposed program first to USDA's 
BioPreferred program office and then to USDA policy officials.
Notice of Product Certification
    After an applicant receives notice from USDA that its application 
(for the product to bear the label) has been conditionally approved, 
the applicant must provide certain information, as discussed in Section 
E in this preamble, to USDA. Once USDA has confirmed that the 
information supplied by the applicant is complete, USDA will approve 
the product label application and will issue a notice of product 
certification to the applicant. USDA will include in the notice of 
certification information necessary for the applicant to access the 
applicable label artwork from the USDA BioPreferred Web site. Upon 
receipt of the notice of certification, the applicant may begin using 
the label on the certified biobased product.
Term of Product Certification
    The effective (beginning) date of the product certification is the 
date that the applicant receives the notice of certification from USDA. 
The certification will remain valid for as long as the biobased product 
is manufactured in accordance with the information supplied in the 
approved application and presented on the USDA Web site, with one 
exception. As discussed earlier, it is USDA's intent that the 
applicable minimum biobased content of designated items will increase 
over time as advancements are made in biobased product technology. If 
the applicable required minimum biobased content for a product to be 
eligible to display the label is revised by USDA, manufacturers and 
vendors may continue to label their previously certified product only 
if it meets the new minimum biobased content level. In those cases 
where the biobased content of a certified product fails to meet the new 
minimum biobased content level, USDA will notify the manufacturer or 
vendor that their certification is no longer valid. Such manufacturers 
and vendors must increase the biobased content of their product to a 
level at or above the new minimum biobased content level and must re-
apply for certification within 60 days of receiving USDA's notice if 
they wish to continue to use the label. Manufacturers and vendors who 
have re-applied for certification may continue using the existing label 
until they receive notification from USDA on the results of their re-
application for certification.
    USDA considered proposing a certification period of either three or 
five years, but decided that a fixed certification period was 
unnecessary and that the process of reapplying every three or five 
years would impose an undue burden on manufacturers who did not 
reformulate their products. In the case of items that become 
designated, it is likely that the required minimum biobased content for 
the item could be different from the 51 percent level used to qualify 
the item before it was designated. USDA believes that, in those cases, 
only those products that meet the new minimum biobased content should 
be eligible to display the label. Thus, USDA is proposing that if a 
certified product's biobased content is below the newly established 
minimum biobased content, the manufacturer must discontinue applying 
the label as of the effective date of the item designation. The same 
would be true in any other case where USDA, through established notice 
and comment rulemaking procedures, revises the minimum biobased content 
applicable to a previously certified product.
    USDA points out that affixing the label to a certified biobased 
product does not imply that the useful life or the shelf life of the 
product has been affected in any way. Purchasers of labeled certified 
biobased products, therefore, should continue to look to information 
from the manufacturer or vendor to ascertain whether a product will 
perform as advertised at the time the purchase is made.

D. Appeals

    Today's proposed rule includes provisions for appeal by an 
applicant whose application for certification is denied by USDA. In 
addition, entities that have been cited for a violation or that have 
received a notice of suspension or a notice of revocation may also file 
an appeal. All appeals must be filed within 30 days of receipt of the 
applicable notice. Appeals must be made in writing to the Program 
Manager of the Voluntary Labeling Program for Biobased Products and 
must contain, in part, a statement, including appropriate 
substantiating documentation, of the appellant's reasons for believing 
that USDA wrongfully denied the application or issued a notice of 
violation, suspension, or revocation. If the appellant is dissatisfied 
with the results of this appeal, he/she may raise the appeal to the 
Assistant Secretary for Administration by letter request. Appeals to 
the Assistant Secretary for Administration must be filed within 30 days 
of receipt of the notice of decision from the appeal to the Program 
Manager.

[[Page 38302]]

    The proposed rule also includes provisions for manufacturers or 
vendors of mature market products to appeal the exclusion of their 
products from the voluntary labeling program if they believe that 
conditions justify the use of the label on their products.

E. Information Posted on Web Site

    Before USDA issues the notice of certification to a manufacturer or 
vendor to use the label on a biobased product, the manufacturer or 
vendor must submit contact and product information to USDA, which USDA 
will then post on the USDA BioPreferred Web site (which can be accessed 
at https://www.biopreferred.gov). This information must be complete and 
must be provided to USDA before USDA will provide to the manufacturer 
or vendor, the notice of certification and the information for 
accessing the label artwork. The information that must be provided to 
USDA is:
     Product brand name(s) or other identifying information;
     Contact information for the applicant;
     Biobased content level; and
     A hot link directly to the applicant's Web site (if 
available).
    In addition to the information listed above, USDA encourages 
manufacturers to provide other information related to product features 
and applicability for posting to the Web site.
    USDA believes that making the information identified above 
available on the USDA BioPreferred Web site will be an extremely 
valuable step in establishing a database of certified biobased 
products. Ideally, both Federal agencies and public consumers will be 
able to readily access information that will help them in their 
decision-making regarding the purchase of biobased products. USDA 
believes that making this information available not only to Federal 
agencies, but also to public consumers will result in increased 
consumer awareness of and use of biobased products. USDA is also 
proposing that manufacturers of certified biobased products must 
include the USDA Web site address on or in close proximity to the 
label.
    Manufacturers must provide to USDA updated information for posting 
by USDA to the USDA BioPreferred Web site whenever any of the 
information on the Web site becomes outdated or if additional relevant 
information becomes applicable. As discussed in Section I of this 
preamble, failure to provide USDA with updated information will be 
considered a violation of the requirements of the labeling program.

F. Applications for Reformulated Products

    A manufacturer may decide to change the formulation of a certified 
biobased product for various reasons including performance issues, raw 
material availability, or changes in production processes. As discussed 
earlier, manufacturers may also be required to reformulate products 
that are within designated items in response to USDA re-evaluating and 
increasing the applicable minimum biobased content for products within 
the designated item. For such reformulated products to be eligible for 
USDA certification to use the label, USDA proposes that a new 
application be submitted to USDA, as discussed below.
    If a certified product's biobased content is decreased by any 
amount, a new application would be required. In any case where the 
biobased content of a product is decreased from the original 
formulation, the biobased content of the reformulated product must 
still be at or above the applicable minimum biobased content for the 
product in order for the product to qualify for the label.
    In the case of a product whose biobased content is reduced, the 
manufacturer or vendor cannot affix the label to the reformulated 
product until they have submitted a new application, provided USDA with 
the required information on the reformulated product for posting to the 
USDA BioPreferred Web site, and received the notice of certification 
for the reformulated product from USDA. If the manufacturer or vendor 
also continues to sell the product in its original formulation, the 
manufacturer or vendor may continue to affix the label to the original 
product.
    If a certified product's biobased content is increased, and the 
manufacturer wishes to change the label to report the higher value, a 
new application would be required. The manufacturer or vendor may 
continue to affix the label to the reformulated product. However, the 
manufacturer or vendor may not revise the biobased content displayed on 
the label until they have submitted a new application, provided USDA 
with the required information on the reformulated product for posting 
to the USDA BioPreferred Web site, and received the notice of 
certification for the reformulated product from USDA.

G. Requirements Associated With the Label

    Today's proposed rule establishes specific requirements for the use 
of the label. The requirements in today's proposed rule specify who may 
use the label, correct and incorrect uses of the label, the physical 
appearance of the label, and restrictions on the use of the label. 
These requirements are summarized in the remainder of this section.
    USDA is also developing a Marketing Guide that will be made 
available to manufacturers and vendors of labeled products. The purpose 
of this Marketing Guide is to provide expanded discussions of, and 
guidance on resolving, implementation issues that may arise related to 
the use of the label. For example, USDA anticipates that there will be 
questions related to the best way to apply the label on very small 
products, such as those within the designated item ``lip care 
products.'' USDA believes that a Marketing Guide, that can be updated 
frequently, is the most efficient way to keep label users informed of 
guidance provided by USDA in response to implementation issues that 
arise.
Who May Use the Label?
    Any manufacturer or vendor who has received notice of certification 
from USDA, and any designated representative of such manufacturers and 
vendors, may use the label on the product and its associated packaging 
and in the advertising of the certified biobased product. As proposed, 
only the manufacturer or vendor (and their designated representatives) 
of a certified biobased product would be granted the authority to affix 
the label to the product. The process of applying for and receiving 
certification requires specific knowledge of the product and its 
characteristics and formulation. Obtaining certification also imposes 
the requirement on the manufacturer and vendor to provide certain 
information to USDA, which USDA will then post on the USDA BioPreferred 
Web site.
    Other entities may use the label to advertise or promote certified 
biobased products (e.g., in catalogs or procurement databases), as long 
as the manufacturer or vendor of the product (or one of their 
designated representatives) has affixed the label to the product or its 
packaging. USDA believes that allowing other entities to use the label 
in informational, promotional, and educational materials for certified 
biobased products will promote the goal of encouraging the use of 
biobased products.
Use of the Label
    The label may be affixed only to products (or associated packaging) 
for which a manufacturer or vendor has received a notice of 
certification under

[[Page 38303]]

this part. USDA's intent is for the label to be used by manufacturers, 
vendors, and other entities to distinguish biobased products that meet 
or exceed the criteria established by USDA from those that do not meet 
the criteria. It is also important that the label be used in a 
consistent manner such that the label and its meaning will become 
recognizable in the marketplace. Use of the label on non-certified 
products or alterations in the appearance of the label may confuse 
consumers and diminish the value of not only the label, but also the 
entire biobased product program. Therefore, USDA has identified correct 
and incorrect uses of the label, which are discussed in the following 
paragraphs.
    Correct Uses. Proposed section 2904.7 identifies correct usages of 
the label. These include, but are not limited to the following:
     The label may be used in advertisements, catalogs, 
procurement databases, Web sites, and promotional and educational 
materials;
     The label may appear next to a picture of the product(s) 
or text describing the product(s); and
     The label may be used without reference to a specific 
certified biobased product only when informing the public about the 
purpose of the label. For example, the following or similar claim is 
acceptable: ``Look for the `USDA Certified Biobased Product' label. It 
means the product meets USDA standards for the amount of biobased 
content and the manufacturer or vendor has provided relevant 
information on the product for the USDA BioPreferred Web site.'' This 
exception allows manufacturers, vendors, and other entities to use the 
label in documents such as corporate reports, but only in an 
informative manner, not as a statement of product certification.
    Incorrect Uses. Proposed Sec.  2904.7 also identifies incorrect 
usages of the label. These include, but are not limited to the 
following:
     The label may not be used on non-certified products or in 
advertisements or informational materials for non-certified products;
     The label may not be used to imply endorsement by USDA or 
the BioPreferred Program of any particular product, service, or 
company; and
     The label may not be used in any form that could be 
misleading to the consumer, or on business cards, company letterhead, 
or company stationery.
Imported Products
    Because other countries may have different definitions of 
``biobased'' and/or use other terms, it is necessary to address the use 
of the label on products for import. The ``USDA Certified Biobased 
Product'' label signifies that a product meets specific USDA criteria 
for biobased products. Therefore, in order for products imported for 
sale in the U.S. to carry the label, they must meet the same criteria 
as U.S.-sourced biobased products, and their manufacturers and vendors 
must apply for certification to use the label, even if the products are 
considered biobased products in the country in which they are 
manufactured.
Contents of the Label
    The label must consist of the following:
     The logo with the phrase ``USDA Certified Biobased 
Product'' and, where applicable, the letters ``FP'' to indicate that 
the product is within a Federally preferred designated item (this label 
content is collectively referred to as the ``label artwork''); and
     A statement that identifies the biobased content of the 
product, as reported in the approved application for the product at the 
time the label is affixed to the product or its packaging, and whether 
the label applies to the product or packaging.
    USDA is proposing that the statement that identifies the biobased 
content also indicate whether the label applies to the product or the 
packaging (e.g., Product: 57% biobased; Packaging: 90% biobased). The 
USDA is proposing that this statement be included in the label in order 
to make it clear as to what the certified biobased product is. USDA 
believes that there will be instances where the placement of the label 
on a product or its packaging will not clearly identify the certified 
biobased product. For example, it is possible that a label placed on a 
container will refer to the container itself (in which case the 
statement ``Packaging: XX% biobased'' would be used) or to the contents 
within the container (Product: YY% biobased). It may also be possible 
that both the container and its contents are certified biobased 
products, in which case two statements would appear (Product: YY% 
biobased. Packaging: XX% biobased). Without tying the label to the 
product or the packaging, the consumer may be unable to determine which 
product is the certified biobased product. Therefore, USDA is proposing 
that the appropriate statement(s) be included in the label in order to 
identify clearly the product or products to which the label applies.
    Furthermore, the proposed rule requires that, at the time the label 
is affixed to the product or its packaging, the biobased content shown 
on the label is the same as the biobased content found in the approved 
application for the product. It is possible, however, that the biobased 
content of a certified product could be changed by the manufacturer. If 
a certified product's biobased content is changed to a level below that 
shown on the label, the product is considered a reformulated product 
and a new application is required. If a certified product's biobased 
content is increased and the manufacturer wishes to change the label to 
the higher value, a new application is also required.
    USDA also requires manufacturers and vendors to include the USDA 
BioPreferred Web site address on or in close proximity to the label. 
USDA is not proposing to require that the Web site address be on the 
label itself because the label on many products will not be large 
enough to accommodate this extra information. USDA believes that, where 
practicable, the presence of the USDA BioPreferred Web site address on 
the label will assist consumers in obtaining information about biobased 
products.
Physical Aspects of the Label
    The rule addresses the physical aspects of the label artwork and 
the presentation of the biobased product statement. In addition to the 
requirements of the rule, USDA anticipates that guidance on specific 
issues related to the physical aspects of the label will be provided in 
the Marketing Guide.
Label Artwork
    To maintain the distinctiveness of the label artwork (which 
consists of the logo, the phrase ``USDA Certified Biobased Product'' 
and, where applicable, the letters ``FP'') and to make sure that it is 
readily recognizable, USDA has established requirements related to the 
physical appearance of the label artwork. The applicable label artwork 
provided by the BioPreferred Program must be used.
    USDA is also proposing color requirements to ensure that the label 
artwork remains distinctive and recognizable. USDA is proposing to 
require that one of three label versions be used, depending on the need 
of the product. (1) A three-color version of the label artwork (white 
plus two shades of green); (2) a one-color version of the label artwork 
as long as the color used is one of the two greens specified in section 
2904.7(f) of today's proposed rule; and (3) a black and white version 
of the label artwork is also acceptable. The contrast between the light 
and dark

[[Page 38304]]

sections of the label artwork should be great enough to maintain the 
distinctiveness of the design.
    Finally, the label artwork may not be altered, cut, separated into 
components, or distorted in appearance or perspective.
    Biobased product statement. The applicable biobased product 
statement(s), which identifies the product(s) to which the label 
applies and the biobased content(s), would be placed below the label 
artwork. The biobased content must be expressed as ``XX%,'' where XX% 
represents the actual biobased content of the product. The biobased 
content must be easily readable. Figure 1 illustrates the placement of 
the biobased product statement.
[GRAPHIC] [TIFF OMITTED] TP31JY09.000

Placement of the Label
    Whether the label is placed directly on a product, on associated 
packaging, in user manuals, or in other material, it should always be 
placed in a manner that ensures that the label (label artwork and 
biobased product statement(s)) can be readily associated with the 
applicable certified biobased product. The label should not be placed 
in a manner that is ambiguous about which product is a certified 
biobased product or that could indicate certification of a non-
certified product. If all products on a printed page are certified 
biobased products, the label may be placed anywhere on the page. 
However, if a printed page contains a mix of certified biobased 
products and non-certified products, the label must be placed in close 
proximity to the certified biobased products. An individual label 
located near each certified biobased product may be necessary to avoid 
confusion.
Minimum Size and Clear Space Recommendations for the Label
    USDA recognizes that a specific size requirement for the label 
would not be appropriate because of the variety of sizes and shapes of 
products that may be certified. Therefore, the label may be sized to be 
appropriate for the particular application as long as the correct 
proportions are maintained and the label remains legible.
    A border of clear space must surround the label and must be of 
sufficient width to offset it from surrounding images and text and to 
avoid confusion. If the label's color is similar to the background 
color, an outlining color may be used to enhance contrast.
Where To Obtain Copies of the Label Artwork
    The two versions of the label artwork (with and without the letters 
``FP'', as applicable) will be available at the USDA BioPreferred Web 
site. Only manufacturers and vendors approved for use of the label for 
certified biobased products will be able to obtain the label from the 
Web site. USDA will provide the necessary access (through the notice of 
certification) once a manufacturer or vendor has provided USDA with the 
required information, which USDA will post to the USDA BioPreferred Web 
site, for a product whose application for certification has been 
approved by USDA.

H. Violations

    Although the decision to participate in the certified biobased 
products labeling program is voluntary, compliance with the program 
requirements and specifications will be essential to the success of the 
program. Proposed section 2904.8 identifies examples of the types of 
actions that would be violations of the labeling program.
    To enforce the provisions of the voluntary labeling program, USDA 
will implement an audit program. This audit program will include, but 
not necessarily be limited to, conducting inspections of manufacturer 
and vendor facilities, visiting retail facilities, and testing the 
biobased content of certified biobased products. Visiting manufacturer 
and vendor facilities and inspecting their records, for example, will 
help USDA identify potential label and application violations. Testing 
certified biobased products for their biobased contents will help USDA 
determine any violations associated with biobased contents. 
Manufacturers, vendors, and their designated representatives are 
required to cooperate fully with all USDA audit efforts for the 
enforcement of the voluntary labeling program. USDA envisions selecting 
five to ten percent of labeled products at random for audit each year.
    Both the violations being proposed and any penalties associated 
with a violation would be applied on a per product basis. For example, 
a manufacturer has two certified biobased products, Product A and 
Product B. The manufacturer has been cited for a labeling violation for 
Product A and the certification for Product A has been revoked. As 
proposed, the manufacturer would be required to discontinue labeling 
Product A, and USDA would remove the information for Product A from the 
USDA BioPreferred Web site. If no actions were taken against the 
manufacturer with regard to Product B, the manufacturer's certification 
for Product B would not be affected by the violation associated with 
Product A. Thus, the manufacturer would still be allowed to affix the 
label to Product B, and Product B's information would

[[Page 38305]]

remain on the USDA BioPreferred Web site.
    Finally, the appeals process described previously is also 
applicable when a notice of violation, suspension, or revocation is 
issued.
    Biobased Co