Economic-Environmental Win-Wins: Biobased Products in the 2023 Farm Bill

On March 8, the United States celebrated the first National Biobased Products Day to recognize the achievements and potential of the Department of Agriculture’s (USDA’s) Biobased Products Program. With many years of innovation in this area, this program has potential for greater impact as a national decarbonization strategy and rural economic development driver. Here we summarize the status of the Biobased Products Program and offer six recommendations to modernize it, multiply its impact and provide increased economic and climate benefits in the future.

Background: Biobased Products Program

Biobased products and materials are those derived from biomass, which includes organic waste and agricultural and forestry residues, etc. The Biobased Products program, also known as the BioPreferred or Biobased Markets Program, is designed to create jobs and generate economic benefits in rural America by enhancing adoption of biobased products. Created in the 2002 Farm Bill under the Energy Title, the program includes a federal purchasing requirement and a voluntary labeling initiative. The former is a requirement wherein federal agencies and their contractors are required to purchase biobased products from a list of product categories with minimum biobased content. The voluntary labeling initiative provides biobased labeling for biobased commodities in the private sector—for example, commercially-available laundry detergent with a “USDA Certified Biobased Product” label.

Economic and climate benefits of biomass and biomass-derived products

While the BioPreferred Program has seen success, U.S. biomass resources are underutilized despite their promise. In tandem with policies to support sustainable practices that reduce fertilizer and water use, increase soil carbon, and avoid land use and conversion impacts, biomass can provide vital benefits. Displacing petroleum derived-products with biomass-derived products (like biochemicals, bioplastics, and agriculture and forestry products) can contribute to notable emissions reductions. According to estimates from 2016, U.S. biobased products contributed to approximately 13 million metric tons of CO2e in avoided emissions and over $459 billion and 5 million jobs to the U.S. economy.

Beyond biobased products, biomass can generate low-carbon and carbon-negative energy (e.g. hydrogen, sustainable aviation fuel, biofuels, and bioelectricity) and offer solutions for carbon storage through biochar, bio-oil, and carbon captured for removal. Clean technology startups such as Charm and Mote are using biomass from agricultural waste for long-term carbon sequestration. Biomass currently constitutes 5% of all U.S. primary energy consumption. A Bipartisan Policy Center(BPC) co-led analysis, Decarb America, underscored the critical role of biomass in the clean energy transition and the potential for more than 500,000 biomass-related jobs in a future net-zero carbon emissions U.S. economy in 2050.

Through biomass, there is a unique opportunity to derive direct economic benefits from climate smart practices and products. By capitalizing on local biomass resources, a biobased economy can catalyze a host of complementary benefits including: promoting a circular economy; providing additional revenue for growers and landowners; supporting diversified, localized, and small business production of biobased goods; and enabling a more resilient regional economic activity free from global geopolitical dynamics.

Expanding the BioPreferred Program’s benefits

The BioPreferred Program showcases some of these economic benefits of biomass. The program lists more than 14,000 products in its catalogue across 139 categories, up from six categories in 2005. As part of the federal procurement initiative, federal biobased product purchasing has grown annually to approximately $12 billion in 2022.+ Under the voluntary certification initiative, more than 3,000 products have been certified with the USDA Biobased Product label, with more applications coming in.

Yet more benefits are possible. The current definition of “biobased content” does not consider sustainable practices and environmental metrics beyond fossil-fuel carbon substitution—failing to differentiate between biobased products that provide broader environmental benefits from those that don’t. Furthermore, USDA does not leverage existing private sector labels and standards that are more rigorous and already adopted by producers. USDA’s data tracking and reporting methods are also insufficient for accurately assessing the program’s correlation to direct economic impact.

The BPC’s recommendations for consideration in the 2023 Farm Bill outlined potential modifications to the BioPreferred Program to expand and improve product labeling, federal procurement incentives, and reporting systems. These recommendations can increase the economic and climate benefits of the program. Specifically, BPC recommends the following:

• Leverage multi-attribute, private sector standard development activities to optimize BioPreferred Program benefits. Congress could direct USDA to participate in developing and reviewing multi-attribute, environmentally preferable, high-quality, private sector ecolabels, standards, and certifications for biobased products. This would affirm USDA’s existing authority to consult with voluntary, private sector, consensus standards bodies to increase marketplace availability of biobased products with additional environmental benefits.
• Consider and account for the comprehensive benefits of biobased products. The voluntary labeling initiative of the BioPreferred Program has a minimum biobased content of 25%. Different products in the federal procurement initiative have varying minimum biobased content. However, it’s unclear how minimum thresholds are established, updated, or whether the biobased product is the preferred product among other alternatives. Therefore, the ‘minimum biobased content’ does not reflect meaningful information about the product under consideration. To address these concerns, Congress can direct USDA to define, review, and update the biobased content floor every 2-3 years based on product category, market information, technology development, and life cycle analysis.
• Align economic and climate benefits of biomass using best available science. Beyond replacing petroleum-derived products, biomass offers low-carbon and carbon negative benefits. Congress should consider empowering USDA to use advice from the best available science, relevant agencies, and other stakeholders to develop a multi-attribute criterion labeling (such as ‘low-carbon bioproduct’, ‘sustainable bioproduct’, or ‘carbon-negative bioproduct’) using life-cycle considerations and sustainability metrics. This will drive competition and accelerate cost reductions of low carbon and carbon negative biomass-based products.
• Modernize data and reporting to accurately reflect the BioPreferred Program accomplishments. Congress should consider changes that accurately reflect the BioPreferred Program’s multiple benefits. Improvements to the program’s tracking and reporting system such as centralized data system, category-based tracking, product sales reporting, job creation, and economic impact monitoring of the federal procurement initiative will enable USDA to produce more accurate economic impact reporting and improve the program.
• Synergize sustainable procurement efforts to maximize impact. Although federal agencies are required to develop and implement sustainable acquisition, the BioPreferred Program restricts procuring agencies from setting additional, stricter guidelines that go beyond what USDA recommends. In the 2023 Farm Bill, Congress should consider providing agencies with more flexibility. In addition, Congress should consider enhancing the program’s impact by enabling it to interface with General Services Administration’s low-carbon procurement efforts to include consideration of biobased products for low-carbon and environmentally-preferrable transportation and building materials.
• Amplify the impact of the BioPreferred Program and reward high performing bioproducts. While the BioPreferred Program has grown—doubling federal procurements since 2017—authorized funding for the program has not kept pace and its discretionary funding has decreased. Congress should consider addressing these issues by providing resources to match the program’s impact. Congress should also consider providing matching funds to assist states that desire to set up their own “mini” BioPreferred-type programs or create a pilot program that offers higher incentives or priority for procurement for select high-performing, environmentally beneficial bioproducts.

With these proposed recommendations, Congress would supercharge the economic and environmental benefits of the BioPreferred Program in the 2023 Farm Bill.