Voluntary Labeling Program for Biobased Products, 3790-3813 [2011-968]

Agencies

• DEPARTMENT OF AGRICULTURE

[Federal Register Volume 76, Number 13 (Thursday, January 20, 2011)]
[Rules and Regulations]
[Pages 3790-3813]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-968]



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Part IV





Department of Agriculture





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7 CFR Part 2904



Voluntary Labeling Program for Biobased Products; Final Rule

Federal Register / Vol. 76 , No. 13 / Thursday, January 20, 2011 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

7 CFR Part 2904

RIN 0503-AA35


Voluntary Labeling Program for Biobased Products

AGENCY: Departmental Management, USDA.

ACTION: Final rule.

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SUMMARY: The U.S. Department of Agriculture (USDA) is establishing 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 voluntary 
labeling program, a biobased product, after being certified by USDA, 
can 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 Program Web site. This final rule applies to manufacturers 
and vendors who wish to participate in the voluntary labeling component 
of the BioPreferred Program. The final rule also applies to other 
entities (e.g., trade associations) that wish to use the label to 
promote biobased products.

DATES: This final rule is effective February 22, 2011.

FOR FURTHER INFORMATION CONTACT: Ron Buckhalt, USDA, Office of the 
Assistant Secretary for Administration, Room 361, Reporters Building, 
300 7th Street, SW., Washington, DC 20024; e-mail: 
biopreferred@usda.gov; phone (202) 205-4008. Information regarding the 
Federal Biobased Products Preferred Procurement Program (one part of 
the BioPreferred\SM\ Program) is available on the Internet at https://www.biopreferred.gov.

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

I. Authority
II. Background
III. Summary of Changes
IV. Discussion of Public Comments
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 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. E-Government Act Compliance
    K. Congressional Review Act

I. Authority

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

II. Background

    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, 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 a preference 
to the purchase of biobased products (hereafter referred to in this 
Federal Register notice as the ``Federal 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 item(s) to be 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 product category 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 product categories 
(generic groupings of products that perform the same function) 
within which the products have been afforded a procurement 
preference by Federal agencies under the BioPreferred Program. For 
example, under the designated product category ``mobile equipment 
hydraulic fluid,'' all brands and grades of hydraulic fluid 
formulated for use in mobile equipment and meeting the specified 
minimum biobased content are included in the procurement preference 
program.
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    The final guidelines for the Federal 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 product categories and specifies their 
minimum biobased contents, the effective date of the procurement 
preference for biobased products within each product category, 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.
    As part of the Federal 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 product categories 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 product 
category.
    To date, USDA has identified 50 product categories in a variety of 
applications, including cafeteria ware, personal and institutional 
cleaning products, construction products, and lubricants and greases. 
There are presently approximately 5,100 individual BioPreferred 
Products (products that are within product categories that are eligible 
for Federal preferred procurement) within these 50 product categories.
    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 certification mark''). 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 commercial

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entities and the general public. In establishing this program, USDA 
must identify the criteria to determine those products on which the 
certification mark may be used and must develop specific requirements 
for how the mark can be used. It is USDA's intent that the presence of 
the certification mark 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 American Society of Testing and Materials (ASTM) radioisotope 
test D6866.
    In developing the 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 (FTC), 
which issues the ``Guides for the Use of Environmental Marketing 
Claims'' to ensure that the provisions of the voluntary labeling 
program are consistent with the Guides. USDA also held a public meeting 
on July 22, 2008, to seek input on the content and use of the 
certification mark from the public and industry stakeholders.
    As part of the BioPreferred Program, on July 31, 2009, USDA 
published a proposed rule for the voluntary labeling program for 
biobased products under the authority of section 9002. This proposed 
rule can be found at 74 CFR 38295.
    The following section of the preamble presents a summary of the 
changes that have been made to the rule as a result of USDA's 
consideration of the comments that were received on the proposed rule. 
Section IV presents a summary of the public comments received on the 
proposed voluntary labeling program and USDA's responses to the 
comments.

III. Summary of Changes

    As a result of comments received on the proposed rule (section IV), 
USDA made changes to the rule, which are summarized below. USDA 
discusses the rationale for these changes in section IV.
    Minimum biobased content. For finished biobased products that are 
not within the designated product categories and for intermediate 
ingredients or feedstocks that are also not within the designated 
product categories, USDA has lowered the applicable minimum biobased 
content from the proposed 51 percent to 25 percent.
    Mature market products. As a result of USDA consideration of public 
comments concerning the difficulty of implementing case-by-case 
exemptions, USDA has decided to categorically exclude mature market 
products from the labeling program at this time.
    Preliminary notice of violations. USDA has added a provision to the 
rule to provide manufacturers and vendors with a preliminary notice of 
violation.
    Initial approval process. Based on a commenter's recommendation 
that USDA allow representative biobased content testing for products 
with similar biobased contents but slightly different formulations, 
USDA has agreed to allow representative content testing to suffice if 
the product's formulation does not vary by more than 3 percent for 
multiple products.

IV. Discussion of Public Comments

    USDA solicited comments on the proposed rule for 60 days ending on 
September 29, 2009. USDA received comments from 25 commenters by that 
date. These comments were from individuals, manufacturers, and trade 
organizations.

Who can apply for the certification mark?

    Comments: One industry commenter states that vendors, especially 
those who sell private-labeled manufactured products, should be allowed 
to apply for biobased labeling. An example is a product that has been 
labeled by the manufacturer for one purpose; and the vendor would like 
to package it under its private label and for a different application 
(e.g., a road dust suppressant labeled by the manufacturer, could be 
labeled by a vendor as a ``COAL dust control agent'' under the vendor's 
private label). The latter product may require slight modifications by 
the manufacturer or be exactly the same. The vendor would use the 
documentation that the manufacturer has established along with 
additional information to apply for separate labeling.
    One industry commenter supports both manufacturers and vendors 
being eligible to apply for the certification mark and stated that this 
approach provides the maximum flexibility for all participants.
    One industry organization commenter and one industry commenter 
support manufacturers, but not vendors, being eligible to apply for the 
certification mark. The commenters state that it is the manufacturers 
who have the information on product composition (e.g., whether a 
product meets the definition of a biobased product) and biobased 
content (e.g., testing results on the formulated product). Having both 
vendors and manufacturers apply will result in USDA having to process 
many more applications for no reason. Furthermore, it is critical that 
manufacturers maintain control over who uses the certification mark on 
their products. Having a proliferation of vendors apply for the mark 
without the knowledge of the manufacturer will lead to confusion and 
potential misunderstandings.
    One individual commenter does not believe it would be a good idea 
to allow vendors to be eligible to obtain the certification marks. The 
commenter pointed out that, as noted in the proposed rule, it is the 
manufacturer and not the vendor who determines a product's formulation 
and production process. In addition, some manufacturers have become 
very upset when finding out that some vendors of their products were 
participating in the BioPreferred Program without their knowledge. The 
commenter envisions lawsuits arising when allowing vendors to apply for 
labels without documented consent from the manufacturer.
    Response: USDA continues to believe that the goals of the voluntary 
labeling program can be achieved, and the beneficial impacts of the 
BioPreferred Program can be increased, if both manufacturers and 
vendors are allowed to market and promote the manufacturers' biobased 
products with a credible biobased product labeling program. For 
example, many vendors purchase products from manufacturers and then 
repackage or offer these products as private label items. Allowing 
these vendors into the program will increase the number of biobased 
products in the market, thus furthering the goals of the program. 
Therefore, USDA will allow vendors as well as manufacturers to 
participate in the program as long as they meet all program 
requirements.

Applicable Minimum Biobased Contents

    Comment: One industry commenter states that he believes that a 
minimum biobased content of 50 percent should be required for products 
not within product categories that have been identified for Federal 
preferred procurement. Requiring half or more of a product's content to 
be biobased will bring credibility to the certification mark and 
prevent potential ``greenwashing'' by allowing lower biobased content 
product manufacturers to advertise the certification mark.

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Products containing less than 50 percent biobased content can still be 
identified through the BioPreferred designation process for Federal 
preferred procurement.
    One industry commenter recommends that USDA consider lowering the 
biobased content level to 20 percent for intermediate ingredients and 
feedstocks to be eligible to receive the BioPreferred certification 
mark. The commenter has commercialized a family of unsaturated 
polyester resins that are used to fabricate fiberglass-reinforced and 
particulate reinforced composites used in an increasingly wide variety 
of applications in the transportation and building and construction 
industries. The biobased content in these commercially-available resins 
falls in the 8 to 22 percent range. They currently have developmental 
products with biobased content in the 30 to 40 percent range. The 
commenter recommends that the biobased content eligibility cut-off for 
a label be set at 20 percent, not only for these types of products but 
for chemical intermediates and feedstocks in general. The commenter 
believes that this level will stimulate further consumption of existing 
resins and incentivize companies to continue to develop biobased resins 
with even higher biorenewable content.
    One industry organization commenter believes that for finished 
products that do not fall within an existing product category 
identified for Federal preferred procurement the default biobased 
content percentage should be lower (e.g., 25 percent). More flexibility 
is needed in setting a default standard for finished biobased products 
that have not yet been identified for Federal preferred procurement. 
This is a new industry that is creating a range of end products, each 
of which needs to meet different performance standards depending upon 
the type of product. It is not always possible to meet accepted 
industry performance standards and achieve a 51 percent or greater 
biobased content.
    One industry organization supports a minimum biobased content of 
anywhere between 20 and 51 percent for both intermediate ingredients 
and products that do not fall within an existing product category 
identified for Federal preferred procurement.
    Two industry commenters believe the proposed 51 percent minimum 
biobased content is inappropriately high. One of the commenters states 
that they understand the desire to establish the highest possible 
biobased content, but that performance requirements in many 
applications cannot be met with such high biobased content. The 
commenter suggested that USDA review the minimum biobased contents that 
USDA has set for products within the existing product categories 
identified for Federal preferred procurement, and establish a minimum 
for products not within those categories which would be more inclusive 
than the proposed 51 percent. The commenter stated that this would 
allow program expansion without greatly increasing the administrative 
burden. The commenter stated that, for example, if the minimum biobased 
content was set at 20 percent, then 44 of the 49 categories of 
identified items would meet this criterion. Selecting 51 percent 
appears to be arbitrary as there is no rationale provided in the 
proposed rulemaking for this minimum. The commenter further stated that 
USDA has developed a rigorous process for identifying the BioPreferred 
Products that have been identified for Federal preferred procurement. 
The BioPreferred Products to date represent a reasonably sized 
``sample'' of biobased products currently on the market. Selecting a 
minimum biobased content of 20 percent for the labeling program covers 
at least 90 percent of the product categories identified for preferred 
procurement to date by USDA. The other commenter notes that the 
existing minimums for several of the product categories are well below 
that 51 percent threshold and states that if the bar had been set so 
high when products within these categories were being developed, it 
could have inhibited that development. Additionally, these products 
were developed even before the incentive from USDA. To the degree that 
the USDA program will incentivize future development, setting the bar 
this high could inhibit that same development. The commenter believes 
it might be more realistic to set the default minimum biobased content 
somewhere in the lower end of the range (15 to 20 percent) of the 
minimum biobased contents specified for product categories already 
included in the BioPreferred Program, with the expectation that most 
products' biobased contents will increase as technology advances.
    Two industry organization commenters and one industry commenter 
state that USDA's proposed approach to establishing and enforcing 
biobased content levels does not take into account the imprecision in 
the analytical testing method used to determine biobased content or 
manufacturing variations in the production of different batches of 
products or small formulation changes.
    On the first point, the ASTM D6866 test method has precision of +/- 
3 percent on the mean biobased content reported. Because of this, USDA 
has previously recognized the need for flexibility when establishing 
minimum biobased content levels for BioPreferred Products. The 
commenters urge that USDA take the same approach in the labeling rule. 
Products should be eligible for certification if their biobased content 
falls within 3 percentage points of the minimum content level and 
should be considered in compliance if their content falls within 3 
percentage points of their label statement. Manufacturers should not 
have to reapply for certification if their product's biobased content 
falls within 3 percentage points of their label statement.
    On the second point, the commenter stated that in any manufacturing 
process there will be some production variation. Also, small changes 
can be made to formulas over time. Therefore, the commenters urge USDA 
to allow a manufacturer applying for a label certification to establish 
a biobased content for the purpose of the label that may be below the 
actual D6866 test results in order to account for manufacturing 
variations. The commenter stated that, as currently written, the 
applicant does not appear to have that flexibility. The proposed rule 
appears to require that the percentage biobased content used for the 
label be exactly what is reported in the lab test results submitted 
with the application.
    One industry commenter stated that he supports allowing 
intermediate ingredients such as biobased plastic resin to be eligible 
for the voluntary labeling program and that, for those products, the 
certification mark should reference the product's biobased content, 
with a minimum of 50 percent biobased content.
    One industry organization commenter requests clarification of the 
definition of ``intermediate ingredients or feedstocks,'' but states 
that he supports a required biobased content level of anywhere within 
20 to 50 percent for intermediate ingredients and for the final 
products that are not within product categories identified for Federal 
preferred procurement. The commenter also supports the inclusion of 
biobased intermediates as eligible to receive the certification mark 
under the current rulemaking.
    Response: The majority of the public comments received on the 
proposed 51 percent minimum biobased content for finished biobased 
products, as well as intermediate ingredients and feedstocks, that are 
not within product categories

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identified for Federal preferred procurement recommended that the level 
be lowered. Based on USDA consideration of these public comments, as 
well as other factors, USDA has reconsidered the applicable minimum 
biobased content requirement and concluded that a 25 percent minimum 
biobased content is more appropriate.
    As pointed out by the commenters, several product categories that 
have been identified for Federal preferred procurement have applicable 
minimum biobased contents less than the 51 percent minimum that had 
been proposed for (1) finished biobased products and (2) intermediate 
ingredients or feedstocks that are not within product categories that 
have been identified for Federal preferred procurement. For example, 
``general purpose laundry products'' which were identified in Round 4 
of the ``Designation of Biobased Items for Federal Procurement'' have 
an applicable minimum biobased content level of 34 percent, 17 percent 
lower than the proposed biobased content minimum for certification.
    USDA considered the fact that, on a global basis, many other 
entities promoting the development and use of biobased products 
recognize those products that have biobased contents of less than the 
proposed 51 percent. For example, two European Union independent 
certifying organizations, DIN-CERTCO (Germany) and AB Vincotte 
(Belgium), specify 20 percent as the minimum acceptable biobased 
content for products they certify as biobased. The Japan BioPlastics 
Association, which certifies biobased products for Japan, Korea, and 
China, specifies 25 percent as the minimum acceptable biobased content 
for products they certify as biobased.
    USDA also considered that adopting a lower minimum biobased content 
criteria for these products will allow a greater number of new biobased 
products to receive the benefits of the label. This, in turn, is 
expected to lead to increase sales of those biobased products. In 
addition, many of these new products will increase in biobased content 
over time with advances in materials engineering and technology. For 
example, the biobased foam used in automobiles originally had a 
biobased content in the 5 to 10 percent range but has now increased to 
over 30 percent biobased.
    Therefore, USDA believes that lowering the applicable minimum 
biobased content for both finished products and intermediate materials 
that are not at present BioPreferred Products would further the goals 
of the program and allow for a greater number of biobased products to 
use the certification mark. This will create more visibility for the 
labeling program, helping to achieve the goals of the program, and 
further encourage emerging markets because it will, as one commenter 
noted, ``incentivize future development.''
    Because of the variability in product testing, as noted by one 
commenter, USDA is setting the minimum biobased content levels for 
products eligible for the Federal preferred procurement program 3 
percent lower than that of the tested product upon which the minimum 
level is based. However, for the labeling program, the 25 percent 
minimum biobased content is not based on testing of an actual product, 
but is a USDA policy decision based on consideration of the factors 
described above. Applicants must meet the minimum biobased content 
percentage they report for a product and should take the testing 
variability into account when applying for product certification. As 
such, a manufacturer or vendor may want to claim a more conservative 
biobased content percentage for a product in its application for 
certification to use the label. Thus, to ensure that test results 
consistently meet or exceed the biobased content stated in the 
application, manufacturers may want to claim a biobased content 3 to 5 
percent lower than test results have indicated.
    Comment: Two industry organization commenters urge USDA to clearly 
specify the procedure and steps by which an applicant can request an 
exception to any specific minimum biobased content chosen for the final 
rule.
    Response: USDA is working to standardize this process and 
anticipates that it will be similar to the process used to set product 
minimum biobased contents for eligible products in the Federal 
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 
in providing products for testing. However, similar to the process used 
in the Federal preferred procurement program, the establishment of 
alternative minimum biobased 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.

The Labeling of ``Complex Products''

    Comment: Three industry organizations strongly agree with USDA that 
complex products are finished products, are separate and distinct from 
biobased products, and should be included in the BioPreferred Program's 
labeling program. The commenters support including ``complex products'' 
in the labeling effort. The commenters believe that complex products 
can be included in the rule even in the absence of a test method to 
determine the overall biobased content of a complex product. If a 
complex product, such as a car, includes components that contain 
biobased products (e.g., seats, headliners, dashboards), it is not 
practical, or even meaningful, to test and or calculate the overall 
biobased content of the car. Rather, there should be an option to label 
the components with the biobased content. Two of the commenters state 
that one approach for doing this would allow a component (e.g., seat) 
that contained a ``USDA Certified Biobased Product'' to be eligible to 
use the certification mark. For example, if the foam used to make the 
seat had a certification to use the mark then that certification could 
be carried through to the seat. The mark could read: ``Seat: Contains 
Foam with XX Percent Biobased Content.'' Another approach would be to 
allow the component to be tested separately for biobased content or a 
weighted average of the biobased ingredients could be calculated and if 
it met the default percentage it would be eligible for the 
certification mark. If it did not, the manufacturer or vendor could 
apply to USDA for an ``alternative applicable minimum biobased 
content.''
    Three commenters propose that, to determine the biobased content of 
a complex product, an interim approach would be to (1) take a weighted 
sum (e.g., weight of component 1 x new carbon content of the feedstock 
material used in component 1 + weight of component 2 x new carbon 
content of the feedstock material used in component 2; etc. until all 
components have been included) and then (2) normalize this number by 
the total

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weight of the complex product. Consistent with USDA's current 
requirements, the new carbon content should be determined using ASTM 
D6866.
    These commenters recommend that, as a long term approach, USDA 
continue to consult with ASTM to gather information on complex products 
to proceed with the development of a method that can be used to 
determine the biobased content of these products. Once an acceptable 
test method is available, the commenters agree that USDA should amend 
the voluntary labeling rule to allow for the labeling of complex 
products.
    One industry commenter states that care should be taken to not 
complicate the labeling process. A wind generator that uses biobased 
grease or gear lubricants, and biobased composites for the blades 
should indicate that the blades are biobased and the gear lube is 
biobased. Trying to qualify what percent of the total wind generator is 
biobased would complicate the process.
    One industry commenter suggests modifying the term ``complex 
products'' in the labeling program to ``complex finished products'' to 
avoid any confusion with polymer systems. The commenter believes that 
``complex finished products'' can be included in the rule even in the 
absence a test method to determine the overall biobased content of a 
complex finished product.
    One individual commenter believes that, for complex products, it 
would be unwise to base the biobased content on weighted averages for 
the biobased content of all the biobased components. This approach 
would be too costly for some product manufacturers to consider and 
could hinder participation in the program. In addition, the total error 
associated with the weighted average will increase considerably (due to 
cumulative errors) as the number of components within a complex product 
increases. As a result, the total error associated with any given item 
(or between individual products within an item) will be product-
specific, which is undesirable from a designation perspective.
    One industry commenter states that many of these complex products 
will contain components manufactured from biobased and non-biobased 
materials. In some cases, the use of biobased intermediate ingredients 
or feedstocks in components may not represent a significant amount of 
the finished product (i.e., contains less than 51 percent biobased 
content). However, the use of biobased materials may represent a 
significant improvement for the finished product that should be 
encouraged.
    One industry commenter also believes that it is important to look 
at subcategories as well as categories of products because there are 
often performance requirements that place limits on the amount of 
biobased materials that can be used for certain specific applications 
within the same product categories. For example, the amount of biobased 
content in foam used in automotive seating can vary from the amount 
used in foam seating for sofas due to performance requirements.
    Response: USDA appreciates the comments on this subject but has 
decided it is best not to include complex products in the voluntary 
labeling program at this time. USDA recognizes the importance of 
complex products but believes there are many issues to be resolved 
before such products can be included in and recognized by the labeling 
program. These issues include establishing a minimum biobased content 
and other criteria for approval, development of an acceptable test 
procedure to determine the biobased content of complex products, and 
the appropriate certification mark content and placement. USDA does not 
want to delay the implementation of the labeling program for other 
categories of more simple, finished products while this development 
work for the labeling of complex products is being completed.

The Labeling of ``Mature Market Products''

    Comment: Six commenters agree with USDA's proposal that products 
that are considered to be ``mature market products'' (i.e., products 
that had significant market penetration in 1972) should not be eligible 
for participation in the labeling program of the BioPreferred Program 
as mature market products could affect the entry of new (i.e., post-
1972) biobased products into market segments in which mature products 
already have significant market shares. The commenters believe that 
inclusion of ``mature market products'' would be counter to USDA's 
objective to promote development and adoption of new technologies and 
biobased products.
    Two of the commenters questioned why the date of 1972 was selected 
as the cut-off year for products to be included in the ``mature 
market'' category and one commenter requested that USDA provide 
additional information including defense and rationale regarding the 
selection of 1972. The commenter notes that USDA may decide to allow 
manufacturers of mature market products to appeal and states that USDA 
should make clear the information regarding the criteria by which a 
manufacturer of mature market products can appeal, the details of the 
appeal process and how USDA will determine if an appeal is approved or 
not. The commenter also recommends that if manufacturers of ``mature 
market products'' are allowed to appeal, then the appeal process should 
include a public comment period to allow the public to review the 
appeal and to submit comment about it.
    Two commenters recommend that USDA not allow manufacturers of 
biobased products to appeal, on a case-by-case basis, the exclusion of 
their mature market products. The commenters state that, in enacting 
section 9002, Congress made it clear that the purpose of the program, 
including the labeling program, was to grow the market for new biobased 
products. The value of the certification mark for manufacturers and 
vendors of these products is to inform consumers that these new and 
innovative products are available and that USDA has certified the 
biobased content. The ``currency'' of being a new and innovative 
product loses its meaning and quickly the label may become 
``devalued.'' Furthermore, mature market products have other already-
established, and well known labels (like the cotton logo and FSC 
certification for wood and paper products) that they can use. The 
commenters recommended that any government label for mature market 
products be developed separately and under different authority than 
Section 9002.
    One industry commenter states that the labeling of mature products 
would harm the BioPreferred Program's labeling process in the early 
stages. A 5- to 10-year delay before such mature products are allowed 
to be included and labeled would be helpful.
    Two commenters are concerned that the proposed regulations exclude 
mature market products from the program, except on a case-by-case 
basis, and could be interpreted as excluding forestry materials that 
fit properly within the definition of biobased products in the 
authorizing legislation.\2\ One of the commenters believes such an

[[Page 3795]]

exclusion would be arbitrary and capricious in violation of the 
Administrative Procedure Act, 5 U.S.C. 706. Additionally, the commenter 
believes the proposed certification mark violates the consumer 
advertising rules of the FTC.
---------------------------------------------------------------------------

    \2\ The definition of ``biobased products'' found in the 2008 
Farm Bill is 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.''
---------------------------------------------------------------------------

    This commenter, and another individual commenter, believe that the 
exclusion of mature market products from automatic inclusion in the 
voluntary labeling program should be eliminated for the following 
reasons:
     There is no legitimate difference between new and mature 
products in a voluntary public information program;
     There is no guidance on recognizing a product as ``new'';
     The proposal provides for a case-by-case determination 
that would allow some mature market products to use the voluntary 
label; and
     USDA assumes that Congress intended that the voluntary 
label program exclude mature market products, but the legislative 
history does not reflect this interpretation.
    One of the commenters states that USDA needs to understand that 
even ``mature'' products can be ``renewed'' through innovations and 
following new industry standards such as sustainable forestry 
management programs.
    One industry commenter suggests that USDA extend applicability of 
the label to all biobased products. Alternatively, USDA should amend 
the proposed language on the label to clearly designate it as intended 
for emerging market products only.
    One nonprofit organization commenter has concerns about the nature 
of this label on the consumer market especially where it might lead a 
consumer to make assumptions about the overall sustainability of their 
purchase. The BioPreferred Program seems to provide a quantitative 
basis to the natural content. However, the commenter believes that 
exceptions for materials like wool or cotton for rugs, for example, 
could mislead a consumer to make a less environmentally preferable 
choice if they relied on the certified biobased product certification 
mark.
    One industry commenter believes that specifically excluding the 
mature market products will establish a system that creates the 
perception that USDA endorses the use of ``new'' products over mature 
market products, even if the new products contain less biobased 
materials than a competing mature product. This will, in turn, 
encourage consumers to make purchasing decisions that are counter to 
Congressional intent. For example, a paper plate, which USDA has 
characterized as a ``mature market'' product, could not use a certified 
biobased label despite the fact that it is made with close to 100% 
biobased material. On the other hand, a new plastic plate that is 
composed of only 51% corn-based PLA could qualify for the certification 
mark under USDA's proposed rule. This would be both confusing and 
misleading to the consumer resulting in the conclusion that the 
conspicuous use of a USDA-backed certification mark on the plastic 
plate constitutes a government endorsement. The consumer may also 
conclude that forestry practices, no matter how sustainable, are less 
environmentally preferable to synthetic polymers made from agricultural 
products. The commenter believes that excluding mature products will 
provide an unfair competitive disadvantage for these products and 
severely discount the environmental contributions of biobased forest 
products.
    One industry commenter states that since the label will be limited 
to a small pool of biobased products, they are concerned that the 
proposed label will increase customer confusion in an already chaotic 
labeling environment. Consumers will have no basis to determine why one 
biobased product carries the certification mark and one does not. While 
the designation between emerging and mature market products may be 
acceptable in a relatively closed Federal purchasing system, expanding 
this concept to the broad consumer marketplace under a simplistic 
labeling scheme will only increase consumer confusion. The proposed on-
product USDA label does not provide clarification that it is intended 
for emerging market products only. A consumer, looking at a mature 
market biobased product, will have no idea why it is not (or cannot be) 
USDA certified as biobased.
    One environmental group commenter states that he does not 
understand why the labeling program would exclude mature market 
products while allowing biobased labeling of more recent entrants in 
the same market. This has the effect of favoring one biobased product 
over another based solely on their market maturity, rather than being 
based on any rational criteria related to reduced use of fossil fuels, 
carbon cycle benefits, or environmental sensitivity. The commenter 
states that the rules should be amended to avoid punishing 
environmentally favorable ``mature'' products, while encouraging 
environmentally less favorable ``new'' market entrants.
    Response: USDA received numerous comments both for and against the 
exclusion of mature market products from the voluntary labeling 
program. While USDA has carefully considered the comments received on 
the subject, 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.'' Thus, USDA believes it is appropriate for the guidelines to 
exclude products having mature markets from the program.
    The conference report does not specifically state whether the 
language quoted above refers to only the Federal preferred procurement 
program, the voluntary labeling program, or both. However, USDA 
believes that the widespread labeling of mature market products could 
negatively affect the entry of new biobased products into market 
segments in which mature products already have significant market 
shares. Therefore, USDA continues to believe that it is reasonable to 
exclude mature market products from the labeling program, as it has 
done for the Federal preferred procurement program.
    Regarding the 1972 cutoff year, as explained in the preamble to the 
final guidelines, the oil supply and price shocks that began in this 
country around 1972 provided the impetus for sustained serious new 
development of biobased alternatives to fossil-based energy and other 
products. Additionally, there was a return to existing, perhaps 
neglected or under-utilized, biobased products. Thus, at its 
discretion, USDA has selected 1972 as the baseline year in its mature 
market guidance, consistent with the approach taken for the Federal 
preferred procurement program. In using 1972 as a point in time 
standard, rather than a dividing line between two eras, USDA believes 
this can provide for the identification (for Federal preferred 
purchasing) and labeling of some products that would otherwise be 
excluded.

The Appropriate Lengths for the Certification Periods

    Comment: Four commenters recommend that certifications should 
remain valid as long as the certified product is manufactured. However, 
any change that would have any effect on the new carbon content and 
impact biobased content would necessitate the product being retested 
and recertified using ASTM D6866. Since USDA will be implementing an 
audit and enforcement program, this program should be adequate to 
ensure that applicants remain in compliance with the BioPreferred 
Program.

[[Page 3796]]

    One industry commenter states that the appropriate length of 
certification in the early stages should be longer (5 years) and once 
the industry matures, reduced to 3 years. A simple annual response to a 
survey by USDA indicating that there have not been any changes to the 
labeled product could help USDA monitor products that are discontinued 
and keep the vendors active.
    Response: Most commenters agree with USDA's proposal that a 
product's certification should remain valid indefinitely unless USDA 
raises the minimum biobased content requirements for that specific 
product or the formulation of the product changes such that it falls 
below the minimum biobased content allowed for that product to be 
labeled. USDA has received no additional data or information to 
consider changing its decision in this regard and is making no change 
to the proposed regulation based on these comments.

Preliminary Notice of Violations

    Comment: Two industry commenters support USDA adding a provision to 
allow for the Agency to issue ``preliminary'' notices of violation 
before violation notices are issued. It is a sensible safety valve to 
add to the regulations to prevent triggering violation notices 
prematurely. This step can provide time to allow a manufacturer or 
vendor to work with USDA to clarify whether, due to confusion or 
misinformation, a violation really has not occurred. Also, if there was 
a paperwork or recordkeeping error it could be corrected in response to 
a preliminary notice without triggering a violation notice and all its 
consequences.
    Response: USDA agrees with the commenters and will include a 
provision for a preliminary notice of violation. Doing so will give 
manufacturers and vendors the opportunity to work with USDA to make 
corrections or clear up any issues which might place the manufacturer 
or vendor in violation. USDA believes that the labeling program is 
designed to encourage the production, marketing, and distribution of 
biobased products, not to be punitive in nature, and the use of a 
preliminary notice of violation will best serve the goals of the 
program.

Biobased Content Testing Facilities

    Comment: Four commenters agree with USDA's proposal requiring that 
biobased content testing facilities be ISO 9001 conformant to promote 
data and results credibility. This would ensure that the manufacturer 
is complying with some basic quality requirements. One commenter 
believes ISO 17025 will be too demanding.
    Two industry commenters also state that they support allowing 
biobased content to be tested by any third-party ASTM/ISO compliant 
test facility.
    One industry organization commenter believes that USDA should not 
select a single standard, such as ISO 9001 or ISO 17025, for biobased 
content testing laboratories but rather should allow for the biobased 
content testing to be done by any third party ASTM/ISO compliant 
testing facility. The USDA Guidelines for Item Designation take this 
approach and the labeling rule should be consistent with the testing 
facility provisions in the Guidelines.
    One individual commenter recommends that neither ISO certification 
nor ISO compliance should be a requirement. The commenter states that 
there are basically only two labs in the country that are performing 
biobased content determinations for the BioPreferred Program, and no 
new radiocarbon testing labs with interest in performing biobased 
content measurements have ever started up. Since there are so few 
suitable labs available, the commenter does not believe USDA should 
risk restricting the field further. The focus should be on 
qualifications rather than ISO compliance.
    Response: USDA continues to believe that it is in the best interest 
of the labeling program that biobased testing be performed by ISO 9001 
conformant testing facilities. This will ensure that biobased products 
using the certification mark meet the high standards of the program. 
USDA believes it is important that the presence of the certification 
mark on a product will clearly indicate that the product is one for 
which credible information is available as to the biobased content, 
consistently measured across labeled products, as use of the ASTM 
radioisotope test D6866 standard will provide.

Contents and Appearance of the Certification Mark

    Comment: Three commenters agree that the material (e.g., product, 
packaging or both product and packaging) to which the label applies 
should be clearly identified, and believe that USDA's suggested wording 
for ``product'' and ``packaging'' is clear.
    One industry commenter states that he has no issues with the ``FP'' 
on the USDA certified biobased product graphic (i.e., the certification 
mark) and that as long as the program includes an educational campaign 
that describes the mark, there should be no consumer confusion about 
what it means.
    Two commenters believe the way the ``FP'' lettering is placed on 
the certification mark may not be adequate to distinguish the products 
that are eligible for Federal preferred procurement. One commenter 
states that the ``FP'' visually seems to disappear on the mark. Also 
the letters ``FP'' are not likely to have any identifiable meaning to 
either Federal employees or the general public without an outreach and 
education program on what ``FP'' means and how the Federal preferred 
procurement program works. The commenter does believe that it is 
important for Federal buyers to have an easy way to recognize products 
that fall within designated product categories. The commenter suggests 
that the following language be on the final label (under the text that 
now reads ``USDA Certified Biobased Product'') for BioPreferred 
Products currently eligible for Federal preferred procurement: 
``Federal BioPreferred Designated Product.'' In addition, the commenter 
recommends implementing a targeted outreach and education campaign to 
Federal buyers to educate them on the meaning of the label for a 
product eligible for preferred Federal purchasing versus a product 
likely to be labeled that is not currently eligible.
    Two commenters oppose the proposed ``FP'' designator to indicate 
that a product is eligible for Federal preferred procurement. One of 
the commenters does not believe that the ``FP'' designator is necessary 
to inform Federal procurement officials about these items because these 
officials already have access to a list of the products eligible for 
Federal procurement preference. The commenters believe that consumers 
will not recognize the ``FP'' lettering on products, nor will they 
understand that these products, or similar products, have undergone 
life cycle costs and environmental performance analyses. Incorporation 
of the ``FP'' lettering may confuse the consumer regarding the purpose 
of the certification mark and will unnecessarily clutter and interfere 
with what is otherwise needs to be a clean, simple graphic.
    One commenter believes that the certification mark will provide 
little benefit to the average consumer and that using ``FP'' will tend 
to confuse matters, while another commenter believes that the ``FP'' 
information is irrelevant to the labeling program as currently 
proposed.
    Four commenters disagree with the inclusion on the certification 
mark of information on product performance, life-cycle costs and 
environmental and

[[Page 3797]]

human health effects of the labeled products. The commenters believe 
trying to add this information would likely make the certification mark 
confusing to purchasers, is beyond the scope of the labeling program, 
and is not authorized by the statute.
    One industry commenter states that the Farm Bill requires USDA to 
look at environmental impacts beyond biobased content as one of four 
criteria for the Federal preferred procurement program but that they do 
not think that this should be required for the voluntary labeling 
program. Biobased products manufacturers should be encouraged to 
provide additional environmental information and USDA should provide 
space on the website to communicate this rather than requiring it on, 
or near, the certification mark. If additional marketing claims are to 
be made on the package for purpose of communicating with consumers, 
this would fall under the jurisdiction of the FTC.
    One industry commenter states that printing sustainability 
information on a bag or package is an issue that needs further 
consideration. This adds more cost and ink to each bag of insulation 
which may go to landfill or be recycled. This information is normally 
included in product literature and specifications. It is also typically 
on the website of the manufacturer. It is more sustainable to provide 
product information in this manner than to print it on the package.
    Three commenters support including the percentage biobased content 
on the certification mark. One of these commenters believes this 
provides another critical way in which purchasers can select products 
that have the highest biobased content possible. Another commenter 
states that by displaying the percent biobased content, the consumer is 
able to make a purchasing decision based on actual content.
    One industry organization commenter states that there is not 
complete agreement among manufacturers on whether biobased content 
should appear on the certification mark. The commenter believes that 
USDA should carefully weigh the pros and cons of this label content 
issue. One approach would be not to list any content information on the 
certification mark because the mark will only be used on products that 
met the minimum biobased content established by USDA. Another approach 
would be to add the words ``Meets or Exceeds USDA Minimum Biobased 
Content.'' Another approach would be to give manufacturers the option 
of listing the biobased content percent on the mark or simply stating 
``Meets or Exceeds the USDA Minimum Biobased Content.'' If USDA 
requires that a specific biobased content percent be placed on the 
certification mark, then flexibility should be given to manufacturers 
to use a number that reflects testing and manufacturing variability, as 
long as the number equals or exceed the minimum content requirement.
    One industry commenter states that including only the biobased 
content on the certification mark implies that only that criterion is 
relevant. USDA determines the minimum acceptable biobased content based 
on several factors, including commercially available offerings, 
performance requirements in the application, etc. Such multi-factor 
considerations have lead to a wide range of minimum acceptable biobased 
contents, from 7 to 95 percent, across the range of product categories 
and applications. If the certification mark exclusively highlights the 
biobased content, this could send a misleading signal to the consumer 
that biobased content is the only relevant factor. The commenter 
suggests that, instead of including the percent biobased content on the 
mark, include the BioPreferred Program website URL in that proposed 
location on the label/artwork. This would encourage consumers to become 
more informed about the program. Individual manufacturers would still 
have the option of including additional information regarding biobased 
content elsewhere on the package, separate from the label itself. Such 
claims would be subject to the guidance from the FTC ``Guides for the 
Use of Environmental Marketing Claims.''
    One industry commenter suggests that including the biobased content 
on the label be left to the discretion of the various companies. The 
commenter states that the current state-of-the-art of biobased analytic 
calculation remains not very accurate and this could open the doors to 
issues when a specific number will be indicated on a certification 
mark.
    One industry commenter states that as long as the products meet the 
minimum biobased content set by USDA, what relevance does ``Product: x 
percent biobased'' add? This would lead to a ``specmanship'' 
competition in the market.
    One industry commenter recommended the following options for 
including the percent biobased content on the label (listed in order of 
preference):
    A. Allow the manufacturers the option of listing the biobased 
content or the wording ``Meets or Exceeds USDA Minimum Biobased 
Content'';
    B. Require the listing of actual biobased percent of the product 
(within the tolerance of standard test variability); or,
    C. If manufacturing variability of actual percent content is a 
significant issue, then require a numerical percent value, but rather 
than requiring listing actual percent or the minimum required percent, 
the manufacturer has the option of stating a percent content higher 
than the minimum but lower than their ``normal'' tested value.
    The commenter states that the BioPreferred Program would benefit by 
requiring one of the above label alternatives as they would serve as a 
continual incentive for manufacturers to maximize their biobased 
content. Conversely, it could be a deterrent to add lower cost non-
renewable blends to a level just above the minimum allowed.
    One biobased industry commenter would like to see a very simple 
label without the specific biobased content. The minimum biobased 
content is established for BioPreferred Products and for other products 
it will be 51 percent unless USDA approves an alternative. Therefore, a 
supplier simply needs to certify that their product meets the minimum 
standard for that product(s) and USDA needs to enforce to that biobased 
content level. If a company has a higher biobased content than that 
minimum, then they can market that product in their literature as such.
    One industry commenter believes that the logo is quite large and 
that USDA should reconsider the size. Product labels have limited 
space, and the graphic as shown in the draft voluntary labeling rule, 
is overly large. Although the label can be reduced, it would be to the 
point of not being readable or recognizable.
    One industry organization commenter supports the proposed 
requirement that the BioPreferred Program's Web site address either be 
on or in close proximity to the label. Directing people to the site 
will be a good way to educate them about biobased products and what the 
certification mark means.
    One environmental group commenter states that the label should 
include a detailed information box adjacent to the logo, so the 
consumer knows the source of the bioproducts, the energy inputs used in 
their manufacture, and if any native ecosystems were degraded in the 
production process.
    One industry organization commenter believes that products that use 
the biobased product label must also state on the label the biological 
components of the product.

[[Page 3798]]

    One industry organization commenter believes that the information 
USDA proposes be included is reasonable and should be legible on the 
vast majority of products. For products that may be too small to affix 
the certification mark in a legible form, USDA should consider 
authorizing the use of a separate ``hang tag'' containing the 
certification mark information that could be attached to the product. 
This approach would address the small product issue without the need to 
change the overall design of the mark artwork and accompanying 
statement.
    One individual commenter believes that, in order to better 
accommodate labeling of small products (e.g., lip balm), it would be 
advantageous to also offer a version of the certification mark that 
does not contain the words ``USDA Certified Biobased Product.'' Such a 
mark would be intended only for products where it would be very 
problematic to use the certification mark as currently proposed.
    One industry commenter states that he believes USDA should budget 
an extensive education campaign to generate brand awareness of the 
certification mark both within Government and to the public. Similarly, 
brand guidelines should be developed to ensure proper stewardship of 
the mark.
    One industry commenter states that the certification mark must be 
in full compliance with the FTC's Guides on the Use of Environmental 
Marketing Claims. The commenter also states that consumer testing must 
be undertaken to determine whether the intent of the certification mark 
is clearly understood.
    Two industry commenters recommend that USDA develop and make 
available with its certification mark a simple set of guidelines 
regarding the proper usage of the mark and accompanying text to ensure 
a legible and consistent presentation of this information.
    Response: As stated in the proposed rule, USDA will create 
guidelines to address recommended certification mark size, given the 
variability in biobased product and packaging dimensions. These 
guidelines are referred to in the proposed rule as the ``Marketing 
Guides.'' These guides/guidelines will be available to manufacturers 
and vendors of labeled products to provide expanded discussions of, and 
guidance on resolving, implementation issues that may arise related to 
certification mark use. For example, USDA anticipates that there will 
be questions related to the best way to apply the certification mark on 
very small products, such as those within ``lip care products'', a 
product category whose products are identified for preferred Federal 
purchasing. USDA believes that the Marketing Guides, which can be 
updated frequently, are the most efficient way to keep certification 
mark users informed of guidance provided by USDA in response to 
implementation issues that arise. Additional information on 
sustainability and other data will be Web-hosted, not affixed to the 
mark.
    Additionally, USDA consulted the FTC, which issues the ``Guides for 
the Use of Environmental Marketing Claims'' to ensure that the 
provisions of the voluntary labeling program were consistent with the 
Guides. If manufacturers or vendors include environmental claims about 
biobased products on their products/packaging (beyond the application 
of the certification mark) these statements and/or marketing language 
may be flagged and forwarded to the FTC for their review and follow-up.
    Further, while USDA appreciates the concerns of commenters who 
would like to see more environmental and performance information on the 
certification mark, USDA believes that the certification mark needs to 
be kept as simple as possible to maintain legibility and clarity. 
Adding further information to the mark will only make it more difficult 
to read and understand, lessening the impact of the label and the 
BioPreferred Program.
    While some commenters believed that the ``FP'' acronym proposed to 
appear on the certification mark was confusing, others believed that 
the acronym would be helpful to Federal procurement officials and also 
informative to the general public. Some commenters felt the biobased 
content percentage proposed to appear on the certification mark was 
confusing and/or misleading, and felt that a large-scale outreach and 
educational campaign may be necessary to educate potential buyers on 
the meaning and purpose of this information. USDA considered the 
comments related to the proposed content of the certification mark and 
believes that the mark would be most informative if it includes both 
the ``FP'' (if the product has been designated for Federal preferred 
procurement) and the biobased content percentage, as proposed. Also, to 
ensure that the certification mark clearly indicates whether it applies 
to the product, the packaging, or both, the mark will be available in 
the following variations: ``USDA Certified Biobased Product'',