AISC and its members challenge state laws that put onerous, imprecise and confusing requirements on steel fabricators

May 2018 - It came as a surprise to everyone: In October 2017, California rushed the Buy Clean California Act into law without consulting or warning the impacted industries. This new law required fabricators bidding on state work to provide facility-specific environmental product declarations (EPDs) and document greenhouse gas emissions as being less than a state-mandated maximum allowable level. The following list highlights just a few of many questions that lawmakers and regulators are unable to answer.

• How does the bill define “structural steel”? Does the requirement for facility specific EPDs apply to the mill or the fabricator? How will this allowable level be determined?

• There is no nationally or internationally recognized database for EPDs that conform to a single product category rules  from which industry average global warming potential can be drawn.

• What safeguards will ensure that EPDs subject to evaluation are accurate and use the same methodology as the specified “maximum acceptable global warming potential”?

• Is “maximum global warming potential” being determined based on domestic or global averages? Is it weighted based on products entering the California market? Is it weighted based on the tonnage of product being consumed in California from each production site?

• In an industry with few producers, all of whom use similar production methods, the variation from the average global warming impact value may be small, disadvantaging a producer that is only slightly above a very tight range of results. How will that be taken into account?

• Fabricators purchase material from different mills all year for use on different projects. If the EPD is based at the fabricator level, is it based on the proportional sourcing of material for the study period, even if material from different mills will be used on the target project? Or, will the fabricator need a separate EPD for the material obtained from each mill to which fabrication impacts will be added? Or, if the EPDs are at the mill level, will the fabricator need to specify where its source of supply will be at the time of the bid?

Carbon steel reinforcing bar, flat glass, mineral-wool board insulation and structural steel were included in the California bill, but concrete and wood were not. The program is now fraught with implementation roadblocks. AISC has held several phone calls and in-person meetings with Caltrans and the California Department of General Services to assist with the rulemaking process. Depending on the outcome of future meetings, AISC will put resources in place to help its members prepare for compliance.

Washington state

In January 2018, it appeared that the State of Washington was about to go down the same unfortunate path. However, with scant advance notice, AISC mobilized members and affiliated groups to score a win for the state of Washington and its taxpayers as well as for fabricators.

AISC staff learned about the Buy Clean Washington legislation seven days after it was introduced. This gave us time to prepare written and verbal testimony and engage the sponsor of the bill early on in the process.

AISC worked with State Rep. Beth Doglio and her staff to educate them on the structural steel supply chain, product mix, project-to-project variations in fabrication, and the complexities that this legislation creates for the structural steel industry. AISC rapidly engaged membership and other industry stakeholders to send emails and call their state representatives.

The Buy Clean Washington Act (HB 2412) required (among other things) that all structural steel purchased under a state contract be accompanied by a facility-specific Environmental Product Declaration (EPD); and required steel mills and fabricators to document a global warming potential (CO2 equivalent) less than the industry average.

The intent was to “encourage public dollars for infrastructure projects be spent in a way that is consistent with the state’s goals to reduce greenhouse gas emissions.” It was also meant to keep foreign competition out of Washington state public projects, but the unintended consequences from this legislation far outweighed the benefit to the state and its material suppliers.

Questioning EPDs for fabricators

Steel fabricators have no control over the design of a construction project and therefore no control over the environmental impacts chosen by the designer. The design determines the shapes of steel used (hot-rolled beams, plates or hollow structural shapes) and whether they require drilling, punching, bolting or welding. Products and fabrication processes differ for every construction project, and so any environmental impacts would differ from job to job, too.

For this reason, AISC and its members stress that EPDs should only be required at the steel producer level and should not require steel fabricators to obtain their own EPDs.

Studies have shown that within the structural steel supply chain, 90 percent of environmental impacts come from the production of steel itself, and only 10 percent of the impacts come from fabrication. The cost of obtaining a fabricator facility-specific EPD for hollow structural shapes, wide flange sections and/or steel plate costs between $12,000 and $25,000, not including the time and resources needed to gather historical impact data. Requiring hundreds of steel fabricators to obtain EPDs that account for a small portion of the overall impact that steel has on the environment is not cost effective. This financial burden will also place anti-competitive pressure on smaller fabricators that might not be able to afford the added expense of obtaining an EPD, thinning out the pool of qualified bidders, and potentially raising construction costs for state projects.

Seeking fairness for all

AISC acknowledges the importance of minimizing greenhouse gases in Washington state and globally. However, members want a level playing field. Therefore, AISC supported the inclusion of all materials that could be used to construct the structural framing system of a project, not just steel.

Result: After verbal and written testimony from AISC, the proposed legislation was amended to properly include wood, concrete, steel, and masonry alike.

AISC reserved its support for funding a study to determine the feasibility, impact and potential methodology used to implement the stated goal of the legislation, and not for implementation itself. Research should be used to prove the rules can be implemented effectively before actual implementation.

Result: The implementation portion of the Buy Clean Washington bill was removed, and only authorizes researchers to analyze existing embodied carbon policy, propose methods to categorize structural materials and report structural material quantities and origins, and the global warming potential the materials and processes. Researchers will also propose methods to establish maximum global warming potential limit; and convene an industry task force to give feedback on the proposed methods. n

Brian Raff is director of government relations at the American Institute of Steel Construction, Chicago. He can be reached at 312/670-5441 or raff@aisc.org.