USDA Pushes Bio-based Products through Federal Purchasing Power

Launching a revolutionary market-defining product like the iPod is one thing, but commercializing consumer products built on revolutionary manufacturing processes or new material composition have a much tougher time breaking into existing markets unless the new product comes with a significant cost-savings for consumers or quality improvement that warrants the expense. This is particularly true for technologies, services and products built on an energy conservation, waste minimization or other renewable/green platform.



An item that either addresses a public good or reduces a social cost (i.e. reducing health costs by reducing air pollution caused in the products manufacture) often has a difficult time remaining on the market because sufficient demand is not in place early enough in the products commercial life to achieve the economies of scale in production and mass distribution.



These situations are times when government intervention in the market can be beneficial through incentives like tax credits or rebates for the purchase of hybrid vehicles. Such regulation as mandatory ethanol content requirements in gasoline can also be an effective tool, although it is typically less well received.



Another positive approach for governments to support market penetration of environmentally friendly products is through the government purchasing or procurement process. The latest example was announced Aug. 17 by the U.S. Department of Agriculture (USDA). Through its Federal Biobased Products Preferred Procurement Program, the agency issued two rules to designate 20 items that must receive special consideration by all federal agencies when making purchases.  



USDA published the first final rule designating six items for preferred procurement in March 2006. Federal agencies must give preference to designated bio-based products in government purchases within one year of publication of the final designation rule.



The two proposed rules published in the Aug. 17, 2006, Federal Register designate 20 items, which are generic groupings of bio-based products. The new items include: adhesive and mastic removers, insulating foam for wall construction, hand cleaners and sanitizers, composite panels, fluid-filled transformers, biodegradable containers, fertilizers, metalworking fluids, sorbents, graffiti and grease removers, two-cycle engine oils, lipcare products, biodegradable films, stationary equipment hydraulic fluids, biodegradable cutlery, glass cleaners, greases, dust suppressants, carpets, and carpet and upholstery cleaners.



The public is invited to react to the proposed rules during a 60-day comment period.



Technical information to support each proposed rule is available at the Federal Biobased Products Preferred Procurement Program website: www.biobased.oce.usda.gov. The website also contains a catalog listing the qualifying bio-based products that manufacturers have posted under each designated grouping of products.