# Presentation: 224422

##  A STATUS REPORT  ON THE PREFERRED PROCUREMENT PROGRAM FOR BIOBASED PRODUCTS

## PRESENTED TO THE EOIAG Meeting 

**Thursday, March 10, 2005**
**Eisenhower Room**
**White House Conference Center**

## Dr. Marvin DuncanSenior Agricultural EconomistUSDA/Office of the Chief Economist/Office of Energy Policy and New Uses

## FEDERAL BIOBASED PRODUCTS PREFERRED PROCUREMENT PROGRAM

- Provides that Federal agencies must purchase biobased products designated by this program
- Authority for the program included in the Farm Security and Rural Investment Act (FSRIA) of 2002

## SECTION 9002 OF FSRIA SETS OUT FEDERAL AGENCY REQUIREMENTS

- The Act defines biobased products as commercial or industrial products that are composed, in whole or in significant part, of biological products or renewable **domestic** agricultural materials (including plant, animal, and marine materials) or forestry materials

## WHY DID CONGRESS CREATE THIS PROGRAM?

- To spur demand growth for new biobased products
- To grow demand for agricultural commodities
- To encourage development of processing and manufacturing in rural communities
- To capture environmental benefits
- To enhance the Nation’s energy security

## WHAT DOES THE PROGRAM REQUIRE?

- All Federal agencies must purchase biobased products that have been designated by the program, unless:
- The products are not reasonably available
- The products fail to meet performance standards for the application intended
- The products are available only at an unreasonable price

## WHAT DOES THE PROGRAM DO FOR FEDERAL AGENCIES?

- Encourages purchase of more environmentally sustainable products
- Helps Agencies identify those products
- Will increase the availability and diversity of biobased products

## WHAT DOES THE PROGRAM DO FOR MANUFACTURERS AND VENDORS?

- Creates a preferred market for biobased products
- Provides large scale demonstration of biobased products performance in use
- Spurs development of new biobased products
- Develops alternatives to fossil energy based products

## EXCLUSIONS FROM THE PROGRAM

- The following product groups are excluded from the program by statute:
- Food and feed
- Motor vehicle fuels
- Electricity

## PROPOSED USE AS FUEL ADDITIVES

- Ethanol as a fuel additive
- Less than a 10 percent blend
- Primary market may be to enhance air quality
- Biodiesel as a fuel additive
- Less than 10 percent blend
- Primary market may be lubricity for fuel pumps and injectors

## FEDERAL AGENCIES MUST ASSURE THEIR SPECIFICATIONS COMPLY

- Within one year after guidelines are issued, assure that agency specifications require use of biobased products
- Agencies must create procurement program
- A biobased products preference program
- An agency promotion program
- An annual review and monitoring of effectiveness of agency’s program

## REQUIREMENT APPLIES TO:

- Purchase or acquisition of a procurement item where the purchase price exceeds $10,000,  Or,
- Where the quantity of such items purchased in the preceding fiscal year was $10,000 or more
- Requirement is applied at agency level

## TO USE THE PROGRAM A MANUFACTURER CAN:

- Claim coverage under the program for all products for which generic groupings of products have been designated by rule making
- Certify that a product’s biobased content is consistent with statutory definition
- Certify biobased content meets minimum requirement, using ASTM standard test

## ADMINISTRATIVE PROCEDURES ACT

- Constrains what OEPNU can say about details of rules in clearance
- Purpose is to provide level playing field for stakeholders in rule making
- Public comment period offers stakeholders an opportunity to make views known
- All public comments considered in drafting final rules

## STATUS OF IMPLEMENTING THE PROGRAM

- Final rule to establish program has been published in *Federal Register*
- Proposed rule to designate items (groupings of products) for preferred procurement under the program is in clearance with completion target by mid-fiscal year
- Final rule to designate targeted by end of calendar year
- Plans are for subsequent designation rules to designate balance of items as soon as possible

## IMPLEMENTATION STATUS, CONTINUED

- As many as 30 items (groupings of products) expected to be designated by regulations for preferred procurement under the program this calendar year
- OEPNU has currently identified 83 items to be designated
- A proposed rule to establish the voluntary “U.S.D.A. Certified Biobased Product” labeling program is expected to be completed this calendar year

## EXAMPLES OF PRODUCT ITEMS

- Biobased hydraulic fluids for mobile use
- Metal complex grease
- Janitorial cleaners
- Industrial cleaners
- Gasoline additives
- Diesel fuel additives
- Biodegradable films

## DESIGNATING PRODUCT ITEMS 

- Must be done by rule making process
- Proposed rule
- Public comment period
- Final rule
- USDA must consider information on
- Product availability
- Economic and technological feasibility of use, including life cycle costs

## DESIGNATING PRODUCT ITEMS

- USDA must also provide information to Federal agencies concerning:
- Relative price
- Performance
- Environmental and public health benefits
- And, where appropriate, recommend a level of biobased content in the procured product

## MANUFACTURERS CAN HELP USDA GET PRODUCTS DESIGNATED

- We need information on a number of individual products within an item (generic grouping) in order to designate that grouping by rule
- Please contact Steve Devlin at Iowa State University with product information.  His phone is 515-294-5416
- Our website: _[www.biobased.oce.usda.gov](http://www.biobased.oce.usda.gov/)__ is a good source of information on this program_

## USDA IS DEVELOPING A MODEL PROCUREMENT PROGRAM

- Under leadership of Departmental Administration
- In coordination with the Office of Federal Procurement Policy of OMB
- This program will be available to all Federal agencies
- Its purpose is to train agencies, educate, and promote use of biobased products

## Conclusion

- A final rule establishing the program has been published in the *Federal Register*
- The first items (groupings of products) eligible for preferred procurement will be designated by final rule this calendar year
- A model procurement program will aid Federal agencies in purchasing biobased products
- A proposed rule for a voluntary labeling program will be ready for public comment this fiscal year