Incentives for Environmental Innovation: Federal Programs that Reward Innovative Environmental Protection
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Reprinted from the January 1999 issue of the Environmental Corporate Counsel Report
Innovation is one of the hallmarks of today's successful biotechnology companies. Environmental protection is an area in which the industrial biotechnology is known to be particularly innovative. For example, biotechnology companies may produce environmentally preferable products or production methods that minimize adverse environmental effects. Such innovation can reduce the cost of complying with environmental regulations or help to increase sales and maximize profits.
In the last few years, USEPA has implemented several programs that reward innovation through financing, assistance in marketing, and regulatory flexibility. These programs suggest a shift away from USEPA's traditional "command and control" approach of environmental regulation and toward cost-effective environmental performance. Through these programs, USEPA is rewarding methods of protecting the environment that are cleaner, cheaper, and smarter than USEPA's existing regulations.
This article describes several new federal government - industry partnerships that encourage environmental innovation. Through these initiatives, industrial biotechnology companies can receive financial assistance, technical assistance, and/or regulatory flexibility as incentives to find cost-effective ways of protecting the environment. These initiatives include federal procurement programs that give preference to environmentally-sensitive products; Project XL; the Design for the Environment Program (which includes the Green Chemistry Program and the Cleaner Technology Substitutes Assessment); and the Environmental Technology Verification Program. This article also describes the pros and cons of each program, examples of successful projects in the programs that have established track records, and what biotechnology companies can do to take advantage of or participate in the programs.
Federal Government Purchasing Preferences
Before USEPA could effectively encourage private entities to develop and implement innovative environmental technologies, USEPA recognized that the federal government must lead by example. Therefore, one of the first federal initiatives to encourage the development and use of innovative environmental technologies was Executive Order No. 12873, signed by President Clinton on October 20, 1993, 1 relating to federal acquisition, recycling, and waste prevention. This Executive Order, which was recently replaced by the similar Executive Order No. 13101, 2 established federal purchasing and use guidelines that encouraged environmental responsibility. Specifically, the Executive Orders require each Executive agency to designate an Environmental Executive who would be responsible for, among other things, coordinating environmentally-responsible procurement, as well as waste prevention and recycling by each agency. 3 The Executive Orders recommend principles that Executive agencies should use in making determinations for the preference and purchase of environmentally preferable products, such as purchasing paper with specified percentages of post-consumer content. 4 These mandates enhanced those already in place under Section 6002 of the Resource Conservation and Recovery Act ("RCRA"), which required USEPA to establish guidelines for the federal procurement and use of items which are or can be produced with recovered materials. 5
USEPA has implemented several initiatives under the Executive Orders. For example, on September 29, 1995, USEPA issued the draft Guidance on Acquisition of Environmentally Preferable Products and Services, 6 which recognized that federal agencies should use existing information developed by non-governmental entities (such as trade organizations and third-party certification programs) to identify environmentally preferable products for purchase. In addition, each year USEPA issues Comprehensive Procurement Guidelines ("CPGs"), which identify products that contain recycled or recovered materials, and Recovered Materials Advisory Notices, which provide recommendations for purchasing products that are designated in the CPGs. USEPA also maintains a national database of environmentally preferable products and services. This database, known as VendInfo, is available to any government or private entity through USEPA's Enviro$en$e Internet site at http://es.epa.gov/vendors.
Other federal agencies also participate in developing environmental purchasing preferences. For example, the United States General Services Administration ("GSA") maintains a catalog of environmentally preferred products. 7 Further, at each federal agency, the Environmental Executive is responsible for ensuring that environmental products receive purchasing preferences.
Private entities who produce consumer products may obtain preference for federal government purchasing contracts if their products fit within the USEPA's purchasing preference guidelines. For example, a company that has developed an environmentally sensitive fabric dyeing process could seek to obtain purchasing preferences for military uniforms, towels, and other products produced with that process. As another example, manufacturers of non-toxic cleaners and degreasers could market their products to government agencies through the purchasing preferences.
Entities who have developed environmentally preferable products have several avenues to try to market those products to federal agencies. Vendors of products containing recycled or recovered materials can request that the products be listed in USEPA's CPGs by contacting USEPA's Office of Pollution Prevention and Toxics ("OPPT") at (703)308-7257 or by submitting the request through USEPA's CPG website at http://www.epa.gov/cpg. Vendors of environmentally preferable products or services who wish to have the products or services included in USEPA's online VendInfo database by submitting their information on-line at http://es.epa.gov/vendors/descript.html. Manufacturers and vendors can request that products be included in the GSA catalog of environmentally preferred products by contacting any of the GSA's twelve Business Service Centers to obtain application forms.
Project XL
Project XL is a unique program designed to encourage industry, USEPA, and the public to work together to design cost-effective methods of doing business while protecting the environment. First announced by President Clinton on March 16, 1995, Project XL began with a Federal Register notice wherein USEPA solicited proposals for 50 pilot projects in which participants would receive regulatory flexibility in exchange for the implementation of alternative strategies designed to achieve superior environmental results. 8
One example of a successful XL project is the project in place at Intel Corporation's ("Intel's") Chandler, Arizona facility, Intel received an air permit that set aside the traditional "stack-by-stack" based method of establishing emission limits in favor of performance-based, facility-wide emission limits for Clean Air Act criteria pollutants. Through this innovative permit, Intel may make numerous types of process changes and adjustments without construction permitting or compliance concerns so long as facility-wide emissions remain below the established caps. In exchange for this regulatory flexibility, Intel agreed to significantly reduce the amount of solid wastes that its facility generates, recycle up to 65 percent of the facility's fresh water, and accept health-based permits for hazardous air pollutant emissions.
Notwithstanding the success of XL projects like the Intel project, Project XL has received significant criticism since its introduction in 1995. After four years of program implementation, USEPA has approved only ten XL projects, and approximately twenty XL proposals are under consideration. Many proposals have become bogged down in the procedural process USEPA has established as Project XL has developed. To participate in Project XL, an applicant must first submit a project proposal to USEPA. USEPA then screens each proposal by considering several criteria, including environmental results, stakeholder and community involvement, economic opportunity, feasibility, ability to serve as a model for others, monitoring and reporting, and innovation, multi-media approaches, and pollution prevention. 9 If a proposal is selected, the applicant must work with USEPA, state agencies, other co-regulators, and (often) the public to develop a final project agreement ("FPA"). XL participants have found the approval and FPA development process to be very slow and impaired by numerous conditions, justifications, negotiations, and hurdles. Accordingly, the cost and effort associated with XL participation are very high and often not justified by the corresponding regulatory benefit. These hurdles have deterred many entities from entering Project XL.
USEPA has recognized the problems associated with Project XL. Since 1995, USEPA has published several notices soliciting specific types of proposals, such as projects that encourage innovative environmental technologies, projects that test environmental management systems, innovative superfund cleanup approaches, and projects that encourage multi-media pollution prevention. 10 USEPA is also presently working to "re-engineer" Project XL in order to streamline the approval process and lower transaction costs.
These efforts suggest that Project XL can offer a unique avenue for innovative companies to obtain regulatory flexibility and other benefits in recognition of their efforts in the environmental arena. With USEPA's efforts to re-engineer Project XL, companies are well-positioned to propose projects in exchange for regulatory flexibility. However, companies must ensure that the proposals are financially justified so that the reduced cost of compliance obtained through regulatory flexibility more than offsets the XL transaction costs.
In addition, several states have developed programs that, like Project XL, are designed to encourage regulatory innovation. For example, programs such as Pennsylvania's Strategic Environmental Management Program and South Carolina's Environmental Excellence Program are designed to help facilities promote innovative technologies by reducing or regulatory barriers to improved environmental performance at the state level.
To participate in Project XL, interested parties should contact the USEPA Office of Reinvention Programs at (202)260-5754. Additional information is available on USEPA's Project XL Internet site at http://www.epa.gov/ProjectXL.
Design for the Environment
USEPA's OPPT created the Design for the Environment ("DfE") program in 1991 to promote the incorporation of environmental considerations (such as pollution prevention) into the design of products, manufacturing processes, and technical and management systems. Under the umbrella of the DfE program, USEPA has developed several partnerships with industry, professional organizations, universities, and state and local governments. These partnerships include the Green Chemistry Program, the Cleaner Technology Substitutes Assessment, and efforts to obtain financing for pollution prevention by small and mid-sized businesses.
Green Chemistry Program
Developed in 1992 as a program initially called "Alternative Synthetic Pathways for Pollution Prevention," USEPA's Green Chemistry Program is designed "to promote innovative chemical technologies that reduce or eliminate the use or generation of the hazardous substances and the design, manufacture, and use of chemical products." The program evolved into its current form when President Clinton announced the presidential green chemistry challenge in 1995. Under the Green Chemistry Program, the OPPT awards grants for research projects that are designed to include pollution prevention in the manufacture, design, or use of chemicals. Academic institutions, non-profit institutions, and state and local governments can apply for such green chemistry grants. The grants typically range from $50,000 to $150,000 per year, with an average two to three year duration.
Private entities can benefit from the Green Chemistry Program by partnering with eligible academic or non-profit institutions or certain local governments to perform research projects relating to pollution prevention. In addition, companies who may not be eligible for a grant may obtain recognition for economically-competitive products and manufacturing processes that prevent pollution through the annual Presidential Green Chemistry Program Challenge Awards program. Green Chemistry Program grant and Challenge Award application forms are available for download on USEPA's Green Chemistry Program Internet site at http://www.epa.gov/greenchemistry. Interested parties may also call either the industrial chemical branch of OPPT at (202)260-2659 or USEPA's Pollution Prevention Information Clearinghouse at (202)260-1023.
Cleaner Technologies Substitutes Assessments
Under the DfE program, the OPPT has partnered with several industrial organizations to identify cost-effective methods to incorporate pollution prevention into specific manufacturing processes. These partnerships have led to the development of several Cleaner Technology Substitutes Assessments ("CTSAs"), which identify alternate manufacturing technologies and provide detailed environmental, performance, and economic information associated with each technology. For example, in June 1998 USEPA published a CTSA for the dry cleaning industry that identified several technology alternatives to the use of perchloroethylene ("PCE") in dry cleaning processes. 11 Each of these alternatives would use equipment that is less expensive than traditional PCE dry cleaning equipment, thus protecting the environment while reducing capital costs for dry cleaning facilities. The OPPT has also developed a general CTSA and CTSAs for screen printing and lithography, and the OPPT is working with industrial organizations to develop CTSAs for printing wiring board manufacturers, the metal finishing industry, and the aerospace industry.
Private parties can obtain copies of CTSA reports from USEPA's Pollution Prevention Information Clearinghouse at (202)260-1023. In addition, although it would not likely be cost-effective for an individual company to partner with USEPA to develop a new CTSA, companies can encourage their trade organizations to propose CTSAs and to work with USEPA to develop them for their particular industry.
Environmental Technology Verification Program
In 1995, the USEPA Office of Research and Development ("ORD") recognized that many regulatory authorities, permit writers, and businesses are reluctant to accept the use of new environmental technologies until they have been proven in the field. However, such proof is typically unavailable until the technologies are used. To help eliminate this "catch-22" situation, ORD developed the Environmental Technology Verification ("ETV") Program. In this program, USEPA provides models that can be used to evaluate the performance of new and innovative environmental technologies.
The ETV Program does not rank technologies or label technologies as acceptable or unacceptable. Rather, the ETV program encourages acceptance and implementation of improved environmental technology through the creation of reliable, credible third-party review. The ETV Program works with stakeholders from the public and private sectors to develop and implement test protocols for various types of technologies, and companies that develop innovative technologies can contact the ETV Program and request testing of their technologies under the protocols. If the test proves that the technology works as designed, the ETV Program expects that regulatory authorities and private business will be more willing to accept the technology. This expectation is proving to be true, as several states have signed an agreement with USEPA stating that they will accept technologies that have been reviewed under the ETV Program.
Currently, the ETV program has twelve pilot projects covering a range of technologies, which include advanced monitoring systems, air pollution control technology, drinking water systems, greenhouse gas technologies, innovative coatings and coating equipment, indoor air products, wet weather flow technologies, metal finishing technology, recycling and waste treatment systems, and source water protection technologies. To request review of a new technology, a company can obtain the name of the contact for the relevant ETV Program pilot on the ETV Internet site at http://www.epa.gov/etv.
A Word of Caution: Federal Trade Commission Guidelines
Many of the programs described in this article provide companies the ability to promote themselves or their products as "environmentally friendly." However, before making such claims, companies should be sure to review the Federal Trade Commission ("FTC") Guidelines for Environmental Marketing Claims (the "FTC Guidelines"). 12 Section 5 of the FTC Act makes unlawful deceptive acts and practices in or affecting commerce. 13 The FTC Guidelines establish general principles for determining when environmental marketing claims may constitute such prohibited deceptive acts. Specifically, the FTC Guidelines provide that environmental marketing claims: (1) must contain appropriate qualifications and disclosures; (2) must distinguish between benefits of the product and the package; (3) must not overstate environmental attributes; (4) must sufficiently state the basis for any comparative claims; (5) must not misrepresent a general environmental benefit; (6) must not misrepresent degradability, compostability, recyclability, or recycled content, source reduction, refillability, or ozone friendliness. 14
Because of the FTC guidelines, companies who participate in USEPA's environmental technology programs should not consider such participation to be a carte blanche to market their products or technologies as "green." For example, a chemical company could promote the fact that its manufacturing process has received a Presidential Green Chemistry Challenge Program Award because its process significantly reduces water and air pollution. However, the award may not in itself justify a claim that the products produced by that process are "environmentally safe," especially if the products contain volatile organic compounds ("VOCs") or other potential pollutants.
Conclusion
In recent years, USEPA has introduced several programs that are designed to promote environmental innovation. Many of these programs can result in significant economic benefits for the participants. Through regulatory flexibility, research grants, or essentially free marketing, companies can uses these programs to help ensure that environmental innovation promotes not only public health, but also the economic health of the company's business.
William J. Walsh is a partner in the Washington, D.C. office of Pepper Hamilton LLP, and James M. Singer is an associate in the Pittsburgh, PA office of Pepper Hamilton LLP. Mr. Walsh and Mr. Singer provide comprehensive advice to clients relating to environmental compliance, permitting, and enforcement, and have worked with numerous companies to obtain rewards for environmental innovation and acceptance of new environmental technologies. (E-mail: walshw@pepperlaw.com, singerj@pepperlaw.com.)
FOOTNOTES
1. See 58 Fed. Reg. 54911 (Oct. 20, 1993).
2. See 63 Fed. Reg. 49643 (Sept. 16, 1998).
3. See Executive Order No. 12873, ' 302 (Oct. 20, 1993)
4. See id. at ' 503.
5. See 42 U.S.C. ' 6962(e).
6. 60 Fed. Reg. 50722 (Sept. 29, 1995)
7. See GSA Environmental Products Guide
8. 60 Fed. Reg. 27282 (May 23, 1995)
9. See 60 Fed. Reg. 55569 (Nov. 1, 1995).
10. See, e.g., 63 Fed. Reg. 34161 (June 23, 1998) (soliciting broader, community-based projects and suggesting over 30 project themes); 62 Fed. Reg. 19872 (April 23, 1997) (suggesting various proposal themes, including regulatory approaches that encourage source reduction or on-site reuse of wastes; incentives for greater or continuous collection of emissions data; approaches that minimize the generation of wastes that contain persistent, bio-accumulative, and toxic chemicals; facility-wide Clean Air Act emission limits that also incorporate continuous emissions reduction; regulatory mechanisms that encourage consideration of the environment through the entire life cycle of a product; and incorporation of environmental stewardship in customer-supplier relationships); 62 Fed. Reg. 47929 (Sept. 11, 1996) (seeking projects that create innovative environmental control, monitoring, data collection, or source reduction technologies).
11. OPPT, Cleaner Technologies Substitutes Assessment for Professional Fabricare Processes, EPA 744-B-98-001 (June 1998).
12. 16 C.F.R. ' 260.6.
13. See 15 U.S.C. ' 45
14. See 16 C.F.R. ' 260.6; 63 Fed. Reg. 24240 (May 1, 1998).
Innovation is one of the hallmarks of today's successful biotechnology companies. Environmental protection is an area in which the industrial biotechnology is known to be particularly innovative. For example, biotechnology companies may produce environmentally preferable products or production methods that minimize adverse environmental effects. Such innovation can reduce the cost of complying with environmental regulations or help to increase sales and maximize profits.
In the last few years, USEPA has implemented several programs that reward innovation through financing, assistance in marketing, and regulatory flexibility. These programs suggest a shift away from USEPA's traditional "command and control" approach of environmental regulation and toward cost-effective environmental performance. Through these programs, USEPA is rewarding methods of protecting the environment that are cleaner, cheaper, and smarter than USEPA's existing regulations.
This article describes several new federal government - industry partnerships that encourage environmental innovation. Through these initiatives, industrial biotechnology companies can receive financial assistance, technical assistance, and/or regulatory flexibility as incentives to find cost-effective ways of protecting the environment. These initiatives include federal procurement programs that give preference to environmentally-sensitive products; Project XL; the Design for the Environment Program (which includes the Green Chemistry Program and the Cleaner Technology Substitutes Assessment); and the Environmental Technology Verification Program. This article also describes the pros and cons of each program, examples of successful projects in the programs that have established track records, and what biotechnology companies can do to take advantage of or participate in the programs.
Federal Government Purchasing Preferences
Before USEPA could effectively encourage private entities to develop and implement innovative environmental technologies, USEPA recognized that the federal government must lead by example. Therefore, one of the first federal initiatives to encourage the development and use of innovative environmental technologies was Executive Order No. 12873, signed by President Clinton on October 20, 1993, 1 relating to federal acquisition, recycling, and waste prevention. This Executive Order, which was recently replaced by the similar Executive Order No. 13101, 2 established federal purchasing and use guidelines that encouraged environmental responsibility. Specifically, the Executive Orders require each Executive agency to designate an Environmental Executive who would be responsible for, among other things, coordinating environmentally-responsible procurement, as well as waste prevention and recycling by each agency. 3 The Executive Orders recommend principles that Executive agencies should use in making determinations for the preference and purchase of environmentally preferable products, such as purchasing paper with specified percentages of post-consumer content. 4 These mandates enhanced those already in place under Section 6002 of the Resource Conservation and Recovery Act ("RCRA"), which required USEPA to establish guidelines for the federal procurement and use of items which are or can be produced with recovered materials. 5
USEPA has implemented several initiatives under the Executive Orders. For example, on September 29, 1995, USEPA issued the draft Guidance on Acquisition of Environmentally Preferable Products and Services, 6 which recognized that federal agencies should use existing information developed by non-governmental entities (such as trade organizations and third-party certification programs) to identify environmentally preferable products for purchase. In addition, each year USEPA issues Comprehensive Procurement Guidelines ("CPGs"), which identify products that contain recycled or recovered materials, and Recovered Materials Advisory Notices, which provide recommendations for purchasing products that are designated in the CPGs. USEPA also maintains a national database of environmentally preferable products and services. This database, known as VendInfo, is available to any government or private entity through USEPA's Enviro$en$e Internet site at http://es.epa.gov/vendors.
Other federal agencies also participate in developing environmental purchasing preferences. For example, the United States General Services Administration ("GSA") maintains a catalog of environmentally preferred products. 7 Further, at each federal agency, the Environmental Executive is responsible for ensuring that environmental products receive purchasing preferences.
Private entities who produce consumer products may obtain preference for federal government purchasing contracts if their products fit within the USEPA's purchasing preference guidelines. For example, a company that has developed an environmentally sensitive fabric dyeing process could seek to obtain purchasing preferences for military uniforms, towels, and other products produced with that process. As another example, manufacturers of non-toxic cleaners and degreasers could market their products to government agencies through the purchasing preferences.
Entities who have developed environmentally preferable products have several avenues to try to market those products to federal agencies. Vendors of products containing recycled or recovered materials can request that the products be listed in USEPA's CPGs by contacting USEPA's Office of Pollution Prevention and Toxics ("OPPT") at (703)308-7257 or by submitting the request through USEPA's CPG website at http://www.epa.gov/cpg. Vendors of environmentally preferable products or services who wish to have the products or services included in USEPA's online VendInfo database by submitting their information on-line at http://es.epa.gov/vendors/descript.html. Manufacturers and vendors can request that products be included in the GSA catalog of environmentally preferred products by contacting any of the GSA's twelve Business Service Centers to obtain application forms.
Project XL
Project XL is a unique program designed to encourage industry, USEPA, and the public to work together to design cost-effective methods of doing business while protecting the environment. First announced by President Clinton on March 16, 1995, Project XL began with a Federal Register notice wherein USEPA solicited proposals for 50 pilot projects in which participants would receive regulatory flexibility in exchange for the implementation of alternative strategies designed to achieve superior environmental results. 8
One example of a successful XL project is the project in place at Intel Corporation's ("Intel's") Chandler, Arizona facility, Intel received an air permit that set aside the traditional "stack-by-stack" based method of establishing emission limits in favor of performance-based, facility-wide emission limits for Clean Air Act criteria pollutants. Through this innovative permit, Intel may make numerous types of process changes and adjustments without construction permitting or compliance concerns so long as facility-wide emissions remain below the established caps. In exchange for this regulatory flexibility, Intel agreed to significantly reduce the amount of solid wastes that its facility generates, recycle up to 65 percent of the facility's fresh water, and accept health-based permits for hazardous air pollutant emissions.
Notwithstanding the success of XL projects like the Intel project, Project XL has received significant criticism since its introduction in 1995. After four years of program implementation, USEPA has approved only ten XL projects, and approximately twenty XL proposals are under consideration. Many proposals have become bogged down in the procedural process USEPA has established as Project XL has developed. To participate in Project XL, an applicant must first submit a project proposal to USEPA. USEPA then screens each proposal by considering several criteria, including environmental results, stakeholder and community involvement, economic opportunity, feasibility, ability to serve as a model for others, monitoring and reporting, and innovation, multi-media approaches, and pollution prevention. 9 If a proposal is selected, the applicant must work with USEPA, state agencies, other co-regulators, and (often) the public to develop a final project agreement ("FPA"). XL participants have found the approval and FPA development process to be very slow and impaired by numerous conditions, justifications, negotiations, and hurdles. Accordingly, the cost and effort associated with XL participation are very high and often not justified by the corresponding regulatory benefit. These hurdles have deterred many entities from entering Project XL.
USEPA has recognized the problems associated with Project XL. Since 1995, USEPA has published several notices soliciting specific types of proposals, such as projects that encourage innovative environmental technologies, projects that test environmental management systems, innovative superfund cleanup approaches, and projects that encourage multi-media pollution prevention. 10 USEPA is also presently working to "re-engineer" Project XL in order to streamline the approval process and lower transaction costs.
These efforts suggest that Project XL can offer a unique avenue for innovative companies to obtain regulatory flexibility and other benefits in recognition of their efforts in the environmental arena. With USEPA's efforts to re-engineer Project XL, companies are well-positioned to propose projects in exchange for regulatory flexibility. However, companies must ensure that the proposals are financially justified so that the reduced cost of compliance obtained through regulatory flexibility more than offsets the XL transaction costs.
In addition, several states have developed programs that, like Project XL, are designed to encourage regulatory innovation. For example, programs such as Pennsylvania's Strategic Environmental Management Program and South Carolina's Environmental Excellence Program are designed to help facilities promote innovative technologies by reducing or regulatory barriers to improved environmental performance at the state level.
To participate in Project XL, interested parties should contact the USEPA Office of Reinvention Programs at (202)260-5754. Additional information is available on USEPA's Project XL Internet site at http://www.epa.gov/ProjectXL.
Design for the Environment
USEPA's OPPT created the Design for the Environment ("DfE") program in 1991 to promote the incorporation of environmental considerations (such as pollution prevention) into the design of products, manufacturing processes, and technical and management systems. Under the umbrella of the DfE program, USEPA has developed several partnerships with industry, professional organizations, universities, and state and local governments. These partnerships include the Green Chemistry Program, the Cleaner Technology Substitutes Assessment, and efforts to obtain financing for pollution prevention by small and mid-sized businesses.
Green Chemistry Program
Developed in 1992 as a program initially called "Alternative Synthetic Pathways for Pollution Prevention," USEPA's Green Chemistry Program is designed "to promote innovative chemical technologies that reduce or eliminate the use or generation of the hazardous substances and the design, manufacture, and use of chemical products." The program evolved into its current form when President Clinton announced the presidential green chemistry challenge in 1995. Under the Green Chemistry Program, the OPPT awards grants for research projects that are designed to include pollution prevention in the manufacture, design, or use of chemicals. Academic institutions, non-profit institutions, and state and local governments can apply for such green chemistry grants. The grants typically range from $50,000 to $150,000 per year, with an average two to three year duration.
Private entities can benefit from the Green Chemistry Program by partnering with eligible academic or non-profit institutions or certain local governments to perform research projects relating to pollution prevention. In addition, companies who may not be eligible for a grant may obtain recognition for economically-competitive products and manufacturing processes that prevent pollution through the annual Presidential Green Chemistry Program Challenge Awards program. Green Chemistry Program grant and Challenge Award application forms are available for download on USEPA's Green Chemistry Program Internet site at http://www.epa.gov/greenchemistry. Interested parties may also call either the industrial chemical branch of OPPT at (202)260-2659 or USEPA's Pollution Prevention Information Clearinghouse at (202)260-1023.
Cleaner Technologies Substitutes Assessments
Under the DfE program, the OPPT has partnered with several industrial organizations to identify cost-effective methods to incorporate pollution prevention into specific manufacturing processes. These partnerships have led to the development of several Cleaner Technology Substitutes Assessments ("CTSAs"), which identify alternate manufacturing technologies and provide detailed environmental, performance, and economic information associated with each technology. For example, in June 1998 USEPA published a CTSA for the dry cleaning industry that identified several technology alternatives to the use of perchloroethylene ("PCE") in dry cleaning processes. 11 Each of these alternatives would use equipment that is less expensive than traditional PCE dry cleaning equipment, thus protecting the environment while reducing capital costs for dry cleaning facilities. The OPPT has also developed a general CTSA and CTSAs for screen printing and lithography, and the OPPT is working with industrial organizations to develop CTSAs for printing wiring board manufacturers, the metal finishing industry, and the aerospace industry.
Private parties can obtain copies of CTSA reports from USEPA's Pollution Prevention Information Clearinghouse at (202)260-1023. In addition, although it would not likely be cost-effective for an individual company to partner with USEPA to develop a new CTSA, companies can encourage their trade organizations to propose CTSAs and to work with USEPA to develop them for their particular industry.
Environmental Technology Verification Program
In 1995, the USEPA Office of Research and Development ("ORD") recognized that many regulatory authorities, permit writers, and businesses are reluctant to accept the use of new environmental technologies until they have been proven in the field. However, such proof is typically unavailable until the technologies are used. To help eliminate this "catch-22" situation, ORD developed the Environmental Technology Verification ("ETV") Program. In this program, USEPA provides models that can be used to evaluate the performance of new and innovative environmental technologies.
The ETV Program does not rank technologies or label technologies as acceptable or unacceptable. Rather, the ETV program encourages acceptance and implementation of improved environmental technology through the creation of reliable, credible third-party review. The ETV Program works with stakeholders from the public and private sectors to develop and implement test protocols for various types of technologies, and companies that develop innovative technologies can contact the ETV Program and request testing of their technologies under the protocols. If the test proves that the technology works as designed, the ETV Program expects that regulatory authorities and private business will be more willing to accept the technology. This expectation is proving to be true, as several states have signed an agreement with USEPA stating that they will accept technologies that have been reviewed under the ETV Program.
Currently, the ETV program has twelve pilot projects covering a range of technologies, which include advanced monitoring systems, air pollution control technology, drinking water systems, greenhouse gas technologies, innovative coatings and coating equipment, indoor air products, wet weather flow technologies, metal finishing technology, recycling and waste treatment systems, and source water protection technologies. To request review of a new technology, a company can obtain the name of the contact for the relevant ETV Program pilot on the ETV Internet site at http://www.epa.gov/etv.
A Word of Caution: Federal Trade Commission Guidelines
Many of the programs described in this article provide companies the ability to promote themselves or their products as "environmentally friendly." However, before making such claims, companies should be sure to review the Federal Trade Commission ("FTC") Guidelines for Environmental Marketing Claims (the "FTC Guidelines"). 12 Section 5 of the FTC Act makes unlawful deceptive acts and practices in or affecting commerce. 13 The FTC Guidelines establish general principles for determining when environmental marketing claims may constitute such prohibited deceptive acts. Specifically, the FTC Guidelines provide that environmental marketing claims: (1) must contain appropriate qualifications and disclosures; (2) must distinguish between benefits of the product and the package; (3) must not overstate environmental attributes; (4) must sufficiently state the basis for any comparative claims; (5) must not misrepresent a general environmental benefit; (6) must not misrepresent degradability, compostability, recyclability, or recycled content, source reduction, refillability, or ozone friendliness. 14
Because of the FTC guidelines, companies who participate in USEPA's environmental technology programs should not consider such participation to be a carte blanche to market their products or technologies as "green." For example, a chemical company could promote the fact that its manufacturing process has received a Presidential Green Chemistry Challenge Program Award because its process significantly reduces water and air pollution. However, the award may not in itself justify a claim that the products produced by that process are "environmentally safe," especially if the products contain volatile organic compounds ("VOCs") or other potential pollutants.
Conclusion
In recent years, USEPA has introduced several programs that are designed to promote environmental innovation. Many of these programs can result in significant economic benefits for the participants. Through regulatory flexibility, research grants, or essentially free marketing, companies can uses these programs to help ensure that environmental innovation promotes not only public health, but also the economic health of the company's business.
William J. Walsh is a partner in the Washington, D.C. office of Pepper Hamilton LLP, and James M. Singer is an associate in the Pittsburgh, PA office of Pepper Hamilton LLP. Mr. Walsh and Mr. Singer provide comprehensive advice to clients relating to environmental compliance, permitting, and enforcement, and have worked with numerous companies to obtain rewards for environmental innovation and acceptance of new environmental technologies. (E-mail: walshw@pepperlaw.com, singerj@pepperlaw.com.)
FOOTNOTES
1. See 58 Fed. Reg. 54911 (Oct. 20, 1993).
2. See 63 Fed. Reg. 49643 (Sept. 16, 1998).
3. See Executive Order No. 12873, ' 302 (Oct. 20, 1993)
4. See id. at ' 503.
5. See 42 U.S.C. ' 6962(e).
6. 60 Fed. Reg. 50722 (Sept. 29, 1995)
7. See GSA Environmental Products Guide
8. 60 Fed. Reg. 27282 (May 23, 1995)
9. See 60 Fed. Reg. 55569 (Nov. 1, 1995).
10. See, e.g., 63 Fed. Reg. 34161 (June 23, 1998) (soliciting broader, community-based projects and suggesting over 30 project themes); 62 Fed. Reg. 19872 (April 23, 1997) (suggesting various proposal themes, including regulatory approaches that encourage source reduction or on-site reuse of wastes; incentives for greater or continuous collection of emissions data; approaches that minimize the generation of wastes that contain persistent, bio-accumulative, and toxic chemicals; facility-wide Clean Air Act emission limits that also incorporate continuous emissions reduction; regulatory mechanisms that encourage consideration of the environment through the entire life cycle of a product; and incorporation of environmental stewardship in customer-supplier relationships); 62 Fed. Reg. 47929 (Sept. 11, 1996) (seeking projects that create innovative environmental control, monitoring, data collection, or source reduction technologies).
11. OPPT, Cleaner Technologies Substitutes Assessment for Professional Fabricare Processes, EPA 744-B-98-001 (June 1998).
12. 16 C.F.R. ' 260.6.
13. See 15 U.S.C. ' 45
14. See 16 C.F.R. ' 260.6; 63 Fed. Reg. 24240 (May 1, 1998).
© 1999 Pepper Hamilton LLP
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