[Federal Register Volume 77, Number 197 (Thursday, October 11, 2012)]
[Rules and Regulations]
[Pages 62122-62132]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-24713]



[[Page 62121]]

Vol. 77

Thursday,

No. 197

October 11, 2012

Part VII





 Federal Trade Commission





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16 CFR Part 260





 Guides for the Use of Environmental Marketing Claims; Final Rule

  Federal Register / Vol. 77 , No. 197 / Thursday, October 11, 2012 / 
Rules and Regulations  

[[Page 62122]]


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FEDERAL TRADE COMMISSION

16 CFR Part 260


Guides for the Use of Environmental Marketing Claims

AGENCY: Federal Trade Commission.

ACTION: Adoption of Revised Guides.

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SUMMARY: The Federal Trade Commission (``FTC'' or ``Commission'') 
adopts revised Guides for the Use of Environmental Marketing Claims 
(``Green Guides'' or ``Guides''). This document summarizes the 
Commission's revisions to the Guides and includes the final Guides.

DATES: Effective October 11, 2012.

ADDRESSES: Readers can find the Commission's complete analysis in the 
Statement of Basis and Purpose (``Statement'') on the FTC's Web site at 
http://www.ftc.gov/os/fedreg/2012/10/greenguidesstatement.pdf.

FOR FURTHER INFORMATION CONTACT: Laura Koss, Attorney, Division of 
Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 
202-326-2890.

SUPPLEMENTARY INFORMATION: As part of its comprehensive review of its 
Green Guides,\1\ the Commission reviewed public comments, public 
workshop transcripts, and consumer perception research.\2\ The 
Commission now makes several modifications and additions to the 1998 
Guides and adopts the resulting revised Guides as final.
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    \1\ The FTC issued the Green Guides in 1992, with subsequent 
updates in 1996 and 1998. To avoid confusion, we refer to the 
current Guides as the ``1998 Guides.''
    \2\ In October 2010, the Commission proposed changes to the 1998 
Guides. 75 FR 63552 (Oct. 15, 2010).
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    The Commission modifies sections for the following claims: General 
Environmental Benefit, Compostable, Degradable, Ozone, Recyclable, and 
Recycled Content.\3\ Additionally, the Commission creates the following 
new sections: Carbon Offsets, Certifications and Seals of Approval, 
Free-of, Non-toxic, Made with Renewable Energy, and Made with Renewable 
Materials.\4\ Finally, the Commission makes non-substantive changes 
throughout the Guides to make them easier to read and use, including 
simplifying language and reorganizing sections to make information 
easier to find. Industry guides, such as these, are administrative 
interpretations of law. Therefore, they do not have the force and 
effect of law and are not independently enforceable.
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    \3\ The Commission additionally makes a minor change to an 
example in the Source Reduction section (16 CFR 260.17, Example 1) 
and retains the guidance on Refillable claims (16 CFR 260.14) 
without change.
    \4\ The final Guides do not include specific guidance for 
organic, natural, or sustainable claims.
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I. General Environmental Benefit Claims

    The final Guides caution marketers not to make unqualified general 
environmental benefit claims because ``it is highly unlikely that 
marketers can substantiate all reasonable interpretations of these 
claims.'' \5\ A new example illustrates how marketers may make general 
benefit claims through the combination of images and text.\6\
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    \5\ 16 CFR 260.4(b).
    \6\ 16 CFR 260.4, Example 3. The Commission has moved many of 
the original examples to newly-created sections (see, e.g., 
Certifications and Seals of Approval, Free-Of, and Non-toxic).
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    The Guides further provide that marketers may be able to qualify 
general environmental benefit claims to focus consumers on the specific 
environmental benefits that they can substantiate.\7\ In doing so, 
marketers should use clear and prominent qualifying language to convey 
that a general environmental claim refers only to a specific and 
limited environmental benefit(s). In addition, this section cautions 
marketers that explanations of specific attributes, even when true and 
substantiated, will not adequately qualify general environmental 
marketing claims if an advertisement's context implies other deceptive 
claims.\8\ Moreover, the Guides advise marketers not to imply that any 
specific benefit is significant if it is, in fact, negligible.\9\ 
Finally, the Guides state that if a qualified general claim conveys 
that a product is more environmentally beneficial overall because of 
the particular touted benefit, marketers should analyze trade-offs 
resulting from the benefit to substantiate this claim.\10\
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    \7\ 16 CFR 260.4(c).
    \8\ 16 CFR 260.4(d).
    \9\ 16 CFR 260.4(c), Example 4.
    \10\ 16 CFR 260.4(c), Example 5.
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II. Carbon Offsets

    The final Guides include a new section on carbon offsets.\11\ This 
section advises marketers to have competent and reliable scientific 
evidence to support their carbon offset claims, including using 
appropriate accounting methods to ensure they are properly quantifying 
emission reductions and not selling those reductions more than once. 
Additionally, the Guides advise marketers to disclose if consumers' 
offset purchases fund emission reductions that will not occur for two 
years or longer. Finally, the Guides caution marketers not to advertise 
a carbon offset if the activity that forms the basis of the offset is 
already required by law. More detailed guidance could quickly become 
obsolete given the rapidly changing nature of this market and 
consumers' minimal understanding of such issues. Moreover, such 
guidance might place the FTC in the inappropriate role of setting 
environmental policy.
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    \11\ 16 CFR 260.5.
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III. Certifications and Seals of Approval

    This new section provides that it is deceptive to misrepresent that 
an item or service has been endorsed or certified by an independent 
third party.\12\ It also emphasizes that certifications and seals may 
be endorsements covered by the Commission's Endorsement Guides.\13\ 
Several examples illustrate application of the Endorsement Guides' 
advice that marketers disclose a ``material connection'' (i.e., a 
connection that might materially affect the weight or credibility of an 
endorsement).\14\ For instance, Example 8 clarifies that marketers 
featuring certifications from third-party certifiers need not disclose 
their payment of a reasonable certification fee if that is their only 
connection to the certifier. In this situation, there is no need for 
disclosure because consumers likely expect that certifiers charge a 
reasonable fee for their services. As other examples demonstrate, 
whether a material connection exists depends on whether the ties 
between the marketer and certifier likely affect the weight or 
credibility of the certification. If, for example, an independent 
certifier administers an industry trade association certification 
program by objectively applying a voluntary consensus standard (i.e., a 
standard that has been developed and maintained by a voluntary 
consensus standard body), then the connection between the industry 
group and the marketer would not likely be material.\15\
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    \12\ 16 CFR 260.6(a).
    \13\ 16 CFR 260.6(b), citing 16 CFR 255.
    \14\ Examples 2, 3, 4, 8.
    \15\ Voluntary consensus standard bodies are ``organizations 
which plan, develop, establish, or coordinate voluntary consensus 
standards using agreed-upon procedures. * * * A voluntary consensus 
standards body is defined by the following attributes: (i) Openness, 
(ii) balance of interest, (iii) due process, (iv) an appeals 
process, (v) consensus, which is defined as general agreement, but 
not necessarily unanimity, and includes a process for attempting to 
resolve objections by interested parties, as long as all comments 
have been fairly considered, each objector is advised of the 
disposition of his or her objection(s) and the reasons why, and the 
consensus members are given an opportunity to change their votes 
after reviewing the comments.'' Circular No. A-119 Revised, Office 
of Management and Budget at http://www.whitehouse.gov/omb/circulars_a119.

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    The final Guides also advise that an environmental certification or 
seal likely conveys a general environmental benefit claim when it does 
not clearly convey, either through its name or other means, the basis 
for the certification.\16\ Because it is highly unlikely that marketers 
can substantiate such a claim, they should not use environmental 
certifications or seals that do not convey the basis for the 
certification. The final Guides further state that marketers should 
accompany such seals or certifications with clear and prominent 
language that effectively conveys that the certification or seal refers 
only to specific and limited benefits. This may be particularly 
challenging with certifications based on comprehensive, multi-attribute 
standards. Therefore, a new example illustrates one way of qualifying 
such certifications.\17\
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    \16\ 16 CFR 260.6(d).
    \17\ 16 CFR 260.6, Example 7.
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    Finally, the Guides clarify that third-party certification does not 
eliminate a marketer's obligation to have substantiation for all 
conveyed claims.\18\
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    \18\ 16 CFR 260.6(c).
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IV. Compostable

    The final Guides adopt the 1998 guidance on compostable claims with 
one clarification. The 1998 Guides stated that marketers should possess 
competent and reliable scientific evidence showing that ``all the 
materials in the product or package will break down into, or otherwise 
become a part of, usable compost (e.g., soil-conditioning material, 
mulch) in a safe and timely manner in an appropriate composting program 
or facility, or in a home compost pile or device.'' \19\ The final 
Guides clarify that ``timely manner'' means ``in approximately the same 
time as the materials with which it is composted.'' \20\ The final 
Guides also reiterate the 1998 guidance that marketers clearly qualify 
compostable claims, if, for example, their product cannot be composted 
safely or in a timely manner at home, or if necessary large-scale 
facilities are not available to a substantial majority of the 
marketer's consumers.\21\
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    \19\ 16 CFR 260.7(c) (emphasis added) (1998 Guides).
    \20\ 16 CFR 260.7(b).
    \21\ 16 CFR 260.7(c), 260.7(d).
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V. Degradable

    The 1998 Guides stated that a marketer should qualify a degradable 
claim unless it has competent and reliable scientific evidence that the 
``entire product or package will completely break down and return to 
nature, i.e., decompose into elements found in nature within a 
reasonably short period of time after customary disposal.'' \22\ The 
final Guides state that marketers should not make unqualified 
degradable claims for items destined for landfills, incinerators, or 
recycling facilities because complete decomposition in those specific 
environments will not occur within one year.\23\ The final Guides also 
clarify that a marketer making an unqualified degradable claim for 
solid items other than those destined for landfills, incinerators, or 
recycling facilities should substantiate that the entire item will 
fully decompose within one year after customary disposal.\24\
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    \22\ 16 CFR 260.7(b) (emphasis added) (1998 Guides).
    \23\ 16 CFR 260.8(c).
    \24\ Id.
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VI. Free-Of Claims

    The final Guides include a new section on claims that products or 
services have no, are free of, or do not contain certain substances 
(``free-of claims'').\25\ This new section advises that, even if true, 
claims that an item is free of a substance may be deceptive if: (1) The 
item contains substances that pose the same or similar environmental 
risk as the substance not present; or (2) the substance has not been 
associated with the product category.\26\ This two-part analysis 
prevents deception resulting from two implied claims. The first prong 
addresses the implied claim that a product is free of negative 
attributes associated with that substance. Thus, a free-of claim would 
still be deceptive even if a product is free of a particular substance 
if it has another substance that causes the same or similar 
environmental harm. The second prong cautions that free-of claims may 
deceive consumers by falsely suggesting that competing products contain 
the substance or that the marketer has ``improved'' the product by 
removing the substance.
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    \25\ 16 CFR 260.9. The 1998 Guides covered these claims only in 
examples. 16 CFR 260.6(c), Example 4; 16 CFR 260.7(h), Example 3.
    \26\ 16 CFR 260.9(b).
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    The final Guides also clarify that a free-of claim may, in some 
circumstances, be non-deceptive even though the product contains a 
``trace amount'' of the substance. A marketer can make a claim for a 
product that still contains some amount of a substance only if: (1) The 
level of the specified substance is no more than that which would be 
found as an acknowledged trace contaminant or background level; (2) the 
substance's presence does not cause material harm that consumers 
typically associate with that substance; and (3) the substance has not 
been added intentionally to the product.\27\ The first prong of this 
test reflects consumers' likely expectations that products advertised 
as ``free-of'' a substance contain no more than trace amounts that 
occur naturally in the environment or in product ingredients. The 
second prong clarifies that it is deceptive to make a free-of claim if 
the product contains any amount of the substance that causes material 
harm that consumers typically associate with that substance, no matter 
how small. The third prong recognizes that, if added intentionally, 
reasonable consumers would not think that a product was free of that 
substance, even if that intentionally-added amount is less than a 
typical background level amount of that substance.
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    \27\ 16 CFR 260.9(c).
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VII. Non-Toxic Claims

    The final Guides include a new section on non-toxic claims. This 
section includes the 1998 Guides' advice that it is deceptive to 
misrepresent that a product, package, or service is non-toxic.\28\ Like 
the 1998 Guides, it also cautions that such claims likely convey that 
an item or service is non-toxic both for humans and for the 
environment.\29\
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    \28\ 16 CFR 260.10. The 1998 Guides did not include a non-toxic 
section but addressed these claims in an example in the General 
Environmental Benefit section.
    \29\ 16 CFR 260.10, Example 1.
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VIII. Ozone-Safe and Ozone-Friendly Claims

    The final Guides include the 1998 Guides' advice that it is 
deceptive to misrepresent that a product is safe for, or ``friendly'' 
to, the ozone layer or the atmosphere.\30\ The Commission, however, 
eliminates Examples 3 and 4, which both referenced ozone-depleting 
chemicals that the EPA now bans.
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    \30\ 16 CFR 260.11.
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IX. Recyclable

    The final Guides, like the 1998 Guides, advise marketers to qualify 
recyclable claims when recycling facilities are not available to a 
``substantial majority'' of consumers or communities where a product is 
sold.\31\ They clarify that ``substantial majority,'' as used in this 
context, means at least 60 percent. They also emphasize that the lower 
the levels of access to appropriate facilities, the more strongly the 
marketer should emphasize the limited availability of recycling for the 
product.
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    \31\ 16 CFR 260.12(b).

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X. Recycled Content

    The final Guides include minor changes to the 1998 guidance for 
recycled content claims.\32\ Like the 1998 Guides, they provide that 
marketers should make such claims only for materials that were 
recovered or otherwise diverted from the waste stream, either during 
the manufacturing process (pre-consumer) or after consumer use (post-
consumer).\33\ Additionally, the final Guides continue to advise 
marketers to qualify claims for products or packages only partially 
made from recycled material.\34\ The Commission, however, slightly 
revises Examples 11 and 12 to recognize alternative auto recyclers.\35\
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    \32\ 16 CFR 260.7(e) (1998 Guides).
    \33\ 16 CFR 260.13(b). The final Guides eliminate Example 2, 
which provided circular advice.
    \34\ 16 CFR 260.13(c).
    \35\ These examples appeared in the 1998 Guides as Examples 12 
and 13. The Commission makes this change because in the auto 
context, a recycled content claim for reused parts is true 
regardless of the type of recycler who sells them.
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XI. Renewable Energy Claims

    A new section on renewable energy claims advises marketers to avoid 
making unqualified renewable energy claims based on energy derived from 
fossil fuels.\36\ This section clarifies that marketers may make such 
claims if they purchase renewable energy certificates (``RECs'') to 
match their energy use.\37\ Additionally, based on the Commission's 
study, the section cautions marketers that consumers likely interpret 
renewable energy claims differently than marketers may intend. 
Accordingly, unless marketers have substantiation for all their express 
and reasonably implied claims, they should clearly and prominently 
qualify their renewable energy claims. The Guides suggest that one way 
to minimize the risk of deception is to specify the renewable energy 
source (e.g., wind or solar energy).\38\
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    \36\ 16 CFR 260.15.
    \37\ 16 CFR 260.15(a).
    \38\ 16 CFR 260.15(b).
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    The Guides also advise against making unqualified claims unless 
all, or virtually all, of the significant manufacturing processes 
involved in making a product are powered with renewable energy or non-
renewable energy matched with RECs. Finally, the Guides adopt the 
proposed advice that using the term ``hosting'' is deceptive when a 
marketer generates renewable power but has sold all of the renewable 
attributes of that power. An example, however, clarifies that not all 
generation claims by such marketers are deceptive.\39\
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    \39\ 16 CFR 260.15(d), Example 5.
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XII. Renewable Materials Claims

    The final Guides include a new section on renewable materials 
claims.\40\ Similar to the renewable energy guidance, this section 
advises that consumers likely interpret renewable materials differently 
than marketers may intend. Accordingly, the final Guides advise that 
unless marketers have substantiation for all their express and 
reasonably implied claims, they should clearly and prominently qualify 
their renewable materials claims.\41\ The final Guides provide an 
example of one way marketers can minimize the likelihood of unintended 
implied claims, such as recyclable, degradable, and made with recycled 
content. Specifically, they suggest that marketers specify the material 
used and why the material is renewable.\42\ Additionally, the Guides 
state that marketers should further qualify these claims for products 
containing less than 100 percent renewable materials, excluding minor, 
incidental components.\43\
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    \40\ 16 CFR 260.16.
    \41\ 16 CFR 260.16(b).
    \42\ Id., Example 1.
    \43\ 16 CFR 260.16(c); Example 2.
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XIII. Areas Not Addressed by Final Guides

    The final Guides do not address organic, sustainable, and natural 
claims. In the case of organic claims, the Commission wants to avoid 
providing advice that is duplicative or inconsistent with the USDA's 
National Organic Program (``NOP''), which provides a comprehensive 
regulatory framework governing organic claims for agricultural 
products. For organic claims outside the NOP's jurisdiction, and for 
sustainable and natural claims, the Commission lacks sufficient 
evidence on which to base general guidance.

XIV. Conclusion

    For a complete analysis of comments and the final guidance, please 
see the Statement on the FTC's Web site, available at http://www.ftc.gov/os/fedreg/2012/10/greenguidesstatement.pdf.

XV. Revised Green Guides

List of Subjects in 16 CFR Part 260

    Advertising, Environmental protection, Labeling, Trade practices.

    For the reasons stated above, the Federal Trade Commission revises 
16 CFR part 260 to read as follows:

PART 260--GUIDES FOR THE USE OF ENVIRONMENTAL MARKETING CLAIMS

Sec.
260.1 Purpose, scope, and structure of the guides.
260.2 Interpretation and substantiation of environmental marketing 
claims.
260.3 General principles.
260.4 General environmental benefit claims.
260.5 Carbon offsets.
260.6 Certifications and seals of approval.
260.7 Compostable claims.
260.8 Degradable claims.
260.9 Free-of claims.
260.10 Non-toxic claims.
260.11 Ozone-safe and ozone-friendly claims.
260.12 Recyclable claims.
260.13 Recycled content claims.
260.14 Refillable claims.
260.15 Renewable energy claims.
260.16 Renewable materials claims.
260.17 Source reduction claims.

    Authority: 15 U.S.C. 41-58.


Sec.  260.1  Purpose, scope, and structure of the guides.

    (a) These guides set forth the Federal Trade Commission's current 
views about environmental claims. The guides help marketers avoid 
making environmental marketing claims that are unfair or deceptive 
under Section 5 of the FTC Act, 15 U.S.C. 45. They do not confer any 
rights on any person and do not operate to bind the FTC or the public. 
The Commission, however, can take action under the FTC Act if a 
marketer makes an environmental claim inconsistent with the guides. In 
any such enforcement action, the Commission must prove that the 
challenged act or practice is unfair or deceptive in violation of 
Section 5 of the FTC Act.
    (b) These guides do not preempt federal, state, or local laws. 
Compliance with those laws, however, will not necessarily preclude 
Commission law enforcement action under the FTC Act.
    (c) These guides apply to claims about the environmental attributes 
of a product, package, or service in connection with the marketing, 
offering for sale, or sale of such item or service to individuals. 
These guides also apply to business-to-business transactions. The 
guides apply to environmental claims in labeling, advertising, 
promotional materials, and all other forms of marketing in any medium, 
whether asserted directly or by implication, through words, symbols, 
logos, depictions, product brand names, or any other means.
    (d) The guides consist of general principles, specific guidance on 
the use of particular environmental claims, and

[[Page 62125]]

examples. Claims may raise issues that are addressed by more than one 
example and in more than one section of the guides. The examples 
provide the Commission's views on how reasonable consumers likely 
interpret certain claims. The guides are based on marketing to a 
general audience. However, when a marketer targets a particular segment 
of consumers, the Commission will examine how reasonable members of 
that group interpret the advertisement. Whether a particular claim is 
deceptive will depend on the net impression of the advertisement, 
label, or other promotional material at issue. In addition, although 
many examples present specific claims and options for qualifying 
claims, the examples do not illustrate all permissible claims or 
qualifications under Section 5 of the FTC Act. Nor do they illustrate 
the only ways to comply with the guides. Marketers can use an 
alternative approach if the approach satisfies the requirements of 
Section 5 of the FTC Act. All examples assume that the described claims 
otherwise comply with Section 5. Where particularly useful, the Guides 
incorporate a reminder to this effect.


Sec.  260.2  Interpretation and substantiation of environmental 
marketing claims.

    Section 5 of the FTC Act prohibits deceptive acts and practices in 
or affecting commerce. A representation, omission, or practice is 
deceptive if it is likely to mislead consumers acting reasonably under 
the circumstances and is material to consumers' decisions. See FTC 
Policy Statement on Deception, 103 FTC 174 (1983). To determine if an 
advertisement is deceptive, marketers must identify all express and 
implied claims that the advertisement reasonably conveys. Marketers 
must ensure that all reasonable interpretations of their claims are 
truthful, not misleading, and supported by a reasonable basis before 
they make the claims. See FTC Policy Statement Regarding Advertising 
Substantiation, 104 FTC 839 (1984). In the context of environmental 
marketing claims, a reasonable basis often requires competent and 
reliable scientific evidence. Such evidence consists of tests, 
analyses, research, or studies that have been conducted and evaluated 
in an objective manner by qualified persons and are generally accepted 
in the profession to yield accurate and reliable results. Such evidence 
should be sufficient in quality and quantity based on standards 
generally accepted in the relevant scientific fields, when considered 
in light of the entire body of relevant and reliable scientific 
evidence, to substantiate that each of the marketing claims is true.


Sec.  260.3  General principles.

    The following general principles apply to all environmental 
marketing claims, including those described in Sec. Sec.  260.4 through 
240.16. Claims should comport with all relevant provisions of these 
guides.
    (a) Qualifications and disclosures. To prevent deceptive claims, 
qualifications and disclosures should be clear, prominent, and 
understandable. To make disclosures clear and prominent, marketers 
should use plain language and sufficiently large type, should place 
disclosures in close proximity to the qualified claim, and should avoid 
making inconsistent statements or using distracting elements that could 
undercut or contradict the disclosure.
    (b) Distinction between benefits of product, package, and service. 
Unless it is clear from the context, an environmental marketing claim 
should specify whether it refers to the product, the product's 
packaging, a service, or just to a portion of the product, package, or 
service. In general, if the environmental attribute applies to all but 
minor, incidental components of a product or package, the marketer need 
not qualify the claim to identify that fact. However, there may be 
exceptions to this general principle. For example, if a marketer makes 
an unqualified recyclable claim, and the presence of the incidental 
component significantly limits the ability to recycle the product, the 
claim would be deceptive.

    Example 1: A plastic package containing a new shower curtain is 
labeled ``recyclable'' without further elaboration. Because the 
context of the claim does not make clear whether it refers to the 
plastic package or the shower curtain, the claim is deceptive if any 
part of either the package or the curtain, other than minor, 
incidental components, cannot be recycled.
    Example 2: A soft drink bottle is labeled ``recycled.'' The 
bottle is made entirely from recycled materials, but the bottle cap 
is not. Because the bottle cap is a minor, incidental component of 
the package, the claim is not deceptive.

    (c) Overstatement of environmental attribute. An environmental 
marketing claim should not overstate, directly or by implication, an 
environmental attribute or benefit. Marketers should not state or imply 
environmental benefits if the benefits are negligible.

    Example 1: An area rug is labeled ``50% more recycled content 
than before.'' The manufacturer increased the recycled content of 
its rug from 2% recycled fiber to 3%. Although the claim is 
technically true, it likely conveys the false impression that the 
manufacturer has increased significantly the use of recycled fiber.

    Example 2: A trash bag is labeled ``recyclable'' without 
qualification. Because trash bags ordinarily are not separated from 
other trash at the landfill or incinerator for recycling, they are 
highly unlikely to be used again for any purpose. Even if the bag is 
technically capable of being recycled, the claim is deceptive since 
it asserts an environmental benefit where no meaningful benefit 
exists.

    (d) Comparative claims. Comparative environmental marketing claims 
should be clear to avoid consumer confusion about the comparison. 
Marketers should have substantiation for the comparison.

    Example 1: An advertiser notes that its glass bathroom tiles 
contain ``20% more recycled content.'' Depending on the context, the 
claim could be a comparison either to the advertiser's immediately 
preceding product or to its competitors' products. The advertiser 
should have substantiation for both interpretations. Otherwise, the 
advertiser should make the basis for comparison clear, for example, 
by saying ``20% more recycled content than our previous bathroom 
tiles.''
    Example 2: An advertiser claims that ``our plastic diaper liner 
has the most recycled content.'' The diaper liner has more recycled 
content, calculated as a percentage of weight, than any other on the 
market, although it is still well under 100%. The claim likely 
conveys that the product contains a significant percentage of 
recycled content and has significantly more recycled content than 
its competitors. If the advertiser cannot substantiate these 
messages, the claim would be deceptive.
    Example 3: An advertiser claims that its packaging creates 
``less waste than the leading national brand.'' The advertiser 
implemented the source reduction several years ago and supported the 
claim by calculating the relative solid waste contributions of the 
two packages. The advertiser should have substantiation that the 
comparison remains accurate.
    Example 4: A product is advertised as ``environmentally 
preferable.'' This claim likely conveys that the product is 
environmentally superior to other products. Because it is highly 
unlikely that the marketer can substantiate the messages conveyed by 
this statement, this claim is deceptive. The claim would not be 
deceptive if the marketer accompanied it with clear and prominent 
language limiting the environmental superiority representation to 
the particular attributes for which the marketer has substantiation, 
provided the advertisement's context does not imply other deceptive 
claims. For example, the claim ``Environmentally preferable: 
contains 50% recycled content compared to 20% for the leading 
brand'' would not be deceptive.


Sec.  260.4  General environmental benefit claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product, package, or service offers a general environmental 
benefit.

[[Page 62126]]

    (b) Unqualified general environmental benefit claims are difficult 
to interpret and likely convey a wide range of meanings. In many cases, 
such claims likely convey that the product, package, or service has 
specific and far-reaching environmental benefits and may convey that 
the item or service has no negative environmental impact. Because it is 
highly unlikely that marketers can substantiate all reasonable 
interpretations of these claims, marketers should not make unqualified 
general environmental benefit claims.
    (c) Marketers can qualify general environmental benefit claims to 
prevent deception about the nature of the environmental benefit being 
asserted. To avoid deception, marketers should use clear and prominent 
qualifying language that limits the claim to a specific benefit or 
benefits. Marketers should not imply that any specific benefit is 
significant if it is, in fact, negligible. If a qualified general claim 
conveys that a product is more environmentally beneficial overall 
because of the particular touted benefit(s), marketers should analyze 
trade-offs resulting from the benefit(s) to determine if they can 
substantiate this claim.
    (d) Even if a marketer explains, and has substantiation for, the 
product's specific environmental attributes, this explanation will not 
adequately qualify a general environmental benefit claim if the 
advertisement otherwise implies deceptive claims. Therefore, marketers 
should ensure that the advertisement's context does not imply deceptive 
environmental claims.

    Example 1: The brand name ``Eco-friendly'' likely conveys that 
the product has far-reaching environmental benefits and may convey 
that the product has no negative environmental impact. Because it is 
highly unlikely that the marketer can substantiate these claims, the 
use of such a brand name is deceptive. A claim, such as ``Eco-
friendly: made with recycled materials,'' would not be deceptive if: 
(1) The statement ``made with recycled materials'' is clear and 
prominent; (2) the marketer can substantiate that the entire product 
or package, excluding minor, incidental components, is made from 
recycled material; (3) making the product with recycled materials 
makes the product more environmentally beneficial overall; and (4) 
the advertisement's context does not imply other deceptive claims.
    Example 2: A marketer states that its packaging is now ``Greener 
than our previous packaging.'' The packaging weighs 15% less than 
previous packaging, but it is not recyclable nor has it been 
improved in any other material respect. The claim is deceptive 
because reasonable consumers likely would interpret ``Greener'' in 
this context to mean that other significant environmental aspects of 
the packaging also are improved over previous packaging. A claim 
stating ``Greener than our previous packaging'' accompanied by clear 
and prominent language such as, ``We've reduced the weight of our 
packaging by 15%,'' would not be deceptive, provided that reducing 
the packaging's weight makes the product more environmentally 
beneficial overall and the advertisement's context does not imply 
other deceptive claims.
    Example 3: A marketer's advertisement features a picture of a 
laser printer in a bird's nest balancing on a tree branch, 
surrounded by a dense forest. In green type, the marketer states, 
``Buy our printer. Make a change.'' Although the advertisement does 
not expressly claim that the product has environmental benefits, the 
featured images, in combination with the text, likely convey that 
the product has far-reaching environmental benefits and may convey 
that the product has no negative environmental impact. Because it is 
highly unlikely that the marketer can substantiate these claims, 
this advertisement is deceptive.
    Example 4: A manufacturer's Web site states, ``Eco-smart gas-
powered lawn mower with improved fuel efficiency!'' The manufacturer 
increased the fuel efficiency by 1/10 of a percent. Although the 
manufacturer's claim that it has improved its fuel efficiency 
technically is true, it likely conveys the false impression that the 
manufacturer has significantly increased the mower's fuel 
efficiency.
    Example 5: A marketer reduces the weight of its plastic beverage 
bottles. The bottles' labels state: ``Environmentally-friendly 
improvement. 25% less plastic than our previous packaging.'' The 
plastic bottles are 25 percent lighter but otherwise are no 
different. The advertisement conveys that the bottles are more 
environmentally beneficial overall because of the source reduction. 
To substantiate this claim, the marketer likely can analyze the 
impacts of the source reduction without evaluating environmental 
impacts throughout the packaging's life cycle. If, however, 
manufacturing the new bottles significantly alters environmental 
attributes earlier or later in the bottles' life cycle, i.e., 
manufacturing the bottles requires more energy or a different kind 
of plastic, then a more comprehensive analysis may be appropriate.


Sec.  260.5  Carbon offsets.

    (a) Given the complexities of carbon offsets, sellers should employ 
competent and reliable scientific and accounting methods to properly 
quantify claimed emission reductions and to ensure that they do not 
sell the same reduction more than one time.
    (b) It is deceptive to misrepresent, directly or by implication, 
that a carbon offset represents emission reductions that have already 
occurred or will occur in the immediate future. To avoid deception, 
marketers should clearly and prominently disclose if the carbon offset 
represents emission reductions that will not occur for two years or 
longer.
    (c) It is deceptive to claim, directly or by implication, that a 
carbon offset represents an emission reduction if the reduction, or the 
activity that caused the reduction, was required by law.

    Example 1: On its Web site, an online travel agency invites 
consumers to purchase offsets to ``neutralize the carbon emissions 
from your flight.'' The proceeds from the offset sales fund future 
projects that will not reduce greenhouse gas emissions for two 
years. The claim likely conveys that the emission reductions either 
already have occurred or will occur in the near future. Therefore, 
the advertisement is deceptive. It would not be deceptive if the 
agency's Web site stated ``Offset the carbon emissions from your 
flight by funding new projects that will begin reducing emissions in 
two years.''
    Example 2: An offset provider claims that its product ``will 
offset your own `dirty' driving habits.'' The offset is based on 
methane capture at a landfill facility. State law requires this 
facility to capture all methane emitted from the landfill. The claim 
is deceptive because the emission reduction would have occurred 
regardless of whether consumers purchased the offsets.


Sec.  260.6  Certifications and seals of approval.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product, package, or service has been endorsed or certified by 
an independent third party.
    (b) A marketer's use of the name, logo, or seal of approval of a 
third-party certifier or organization may be an endorsement, which 
should meet the criteria for endorsements provided in the FTC's 
Endorsement Guides, 16 CFR part 255, including Definitions (Sec.  
255.0), General Considerations (Sec.  255.1), Expert Endorsements 
(Sec.  255.3), Endorsements by Organizations (Sec.  255.4), and 
Disclosure of Material Connections (Sec.  255.5).\44\
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    \44\ The examples in this section assume that the certifiers' 
endorsements meet the criteria provided in the Expert Endorsements 
(Sec.  255.3) and Endorsements by Organizations (Sec.  255.4) 
sections of the Endorsement Guides.
---------------------------------------------------------------------------

    (c) Third-party certification does not eliminate a marketer's 
obligation to ensure that it has substantiation for all claims 
reasonably communicated by the certification.
    (d) A marketer's use of an environmental certification or seal of 
approval likely conveys that the product offers a general environmental 
benefit (see Sec.  260.4) if the certification or seal does not convey 
the basis for the certification or seal, either through the name or 
some other means. Because it is highly unlikely that marketers can 
substantiate general environmental benefit claims, marketers should not 
use environmental certifications or seals that do not convey the basis 
for the certification.

[[Page 62127]]

    (e) Marketers can qualify general environmental benefit claims 
conveyed by environmental certifications and seals of approval to 
prevent deception about the nature of the environmental benefit being 
asserted. To avoid deception, marketers should use clear and prominent 
qualifying language that clearly conveys that the certification or seal 
refers only to specific and limited benefits.

    Example 1: An advertisement for paint features a ``GreenLogo'' 
seal and the statement ``GreenLogo for Environmental Excellence.'' 
This advertisement likely conveys that: (1) the GreenLogo seal is 
awarded by an independent, third-party certifier with appropriate 
expertise in evaluating the environmental attributes of paint; and 
(2) the product has far-reaching environmental benefits. If the 
paint manufacturer awarded the seal to its own product, and no 
independent, third-party certifier objectively evaluated the paint 
using independent standards, the claim would be deceptive. The claim 
would not be deceptive if the marketer accompanied the seal with 
clear and prominent language: (1) indicating that the marketer 
awarded the GreenLogo seal to its own product; and (2) clearly 
conveying that the award refers only to specific and limited 
benefits.
    Example 2: A manufacturer advertises its product as ``certified 
by the American Institute of Degradable Materials.'' Because the 
advertisement does not mention that the American Institute of 
Degradable Materials (``AIDM'') is an industry trade association, 
the certification likely conveys that it was awarded by an 
independent certifier. To be certified, marketers must meet 
standards that have been developed and maintained by a voluntary 
consensus standard body.\45\ An independent auditor applies these 
standards objectively. This advertisement likely is not deceptive if 
the manufacturer complies with Sec.  260.8 of the Guides (Degradable 
Claims) because the certification is based on independently-
developed and -maintained standards and an independent auditor 
applies the standards objectively.
---------------------------------------------------------------------------

    \45\ Voluntary consensus standard bodies are ``organizations 
which plan, develop, establish, or coordinate voluntary consensus 
standards using agreed-upon procedures. * * * A voluntary consensus 
standards body is defined by the following attributes: (i) Openness, 
(ii) balance of interest, (iii) due process, (iv) an appeals 
process, (v) consensus, which is defined as general agreement, but 
not necessarily unanimity, and includes a process for attempting to 
resolve objections by interested parties, as long as all comments 
have been fairly considered, each objector is advised of the 
disposition of his or her objection(s) and the reasons why, and the 
consensus members are given an opportunity to change their votes 
after reviewing the comments.'' Memorandum for Heads of Executive 
Departments and Agencies on Federal Participation in the Development 
and Use of Voluntary Consensus Assessment Activities, February 10, 
1998, Circular No. A-119 Revised, Office of Management and Budget at 
http://www.whitehouse.gov/omb/circulars_a119.
---------------------------------------------------------------------------

    Example 3: A product features a seal of approval from ``The 
Forest Products Industry Association,'' an industry certifier with 
appropriate expertise in evaluating the environmental attributes of 
paper products. Because it is clear from the certifier's name that 
the product has been certified by an industry certifier, the 
certification likely does not convey that it was awarded by an 
independent certifier. The use of the seal likely is not deceptive 
provided that the advertisement does not imply other deceptive 
claims.
    Example 4: A marketer's package features a seal of approval with 
the text ``Certified Non-Toxic.'' The seal is awarded by a certifier 
with appropriate expertise in evaluating ingredient safety and 
potential toxicity. It applies standards developed by a voluntary 
consensus standard body. Although non-industry members comprise a 
majority of the certifier's board, an industry veto could override 
any proposed changes to the standards. This certification likely 
conveys that the product is certified by an independent 
organization. This claim would be deceptive because industry members 
can veto any proposed changes to the standards.
    Example 5: A marketer's industry sales brochure for overhead 
lighting features a seal with the text ``EcoFriendly Building 
Association'' to show that the marketer is a member of that 
organization. Although the lighting manufacturer is, in fact, a 
member, this association has not evaluated the environmental 
attributes of the marketer's product. This advertisement would be 
deceptive because it likely conveys that the EcoFriendly Building 
Association evaluated the product through testing or other objective 
standards. It also is likely to convey that the lighting has far-
reaching environmental benefits. The use of the seal would not be 
deceptive if the manufacturer accompanies it with clear and 
prominent qualifying language: (1) indicating that the seal refers 
to the company's membership only and that the association did not 
evaluate the product's environmental attributes; and (2) limiting 
the general environmental benefit representations, both express and 
implied, to the particular product attributes for which the marketer 
has substantiation. For example, the marketer could state: 
``Although we are a member of the EcoFriendly Building Association, 
it has not evaluated this product. Our lighting is made from 100 
percent recycled metal and uses energy efficient LED technology.''
    Example 6: A product label contains an environmental seal, 
either in the form of a globe icon or a globe icon with the text 
``EarthSmart.'' EarthSmart is an independent, third-party certifier 
with appropriate expertise in evaluating chemical emissions of 
products. While the marketer meets EarthSmart's standards for 
reduced chemical emissions during product usage, the product has no 
other specific environmental benefits. Either seal likely conveys 
that the product has far-reaching environmental benefits, and that 
EarthSmart certified the product for all of these benefits. If the 
marketer cannot substantiate these claims, the use of the seal would 
be deceptive. The seal would not be deceptive if the marketer 
accompanied it with clear and prominent language clearly conveying 
that the certification refers only to specific and limited benefits. 
For example, the marketer could state next to the globe icon: 
``EarthSmart certifies that this product meets EarthSmart standards 
for reduced chemical emissions during product usage.'' 
Alternatively, the claim would not be deceptive if the EarthSmart 
environmental seal itself stated: ``EarthSmart Certified for reduced 
chemical emissions during product usage.''
    Example 7: A one-quart bottle of window cleaner features a seal 
with the text ``Environment Approved,'' granted by an independent, 
third-party certifier with appropriate expertise. The certifier 
granted the seal after evaluating 35 environmental attributes. This 
seal likely conveys that the product has far-reaching environmental 
benefits and that Environment Approved certified the product for all 
of these benefits and therefore is likely deceptive. The seal would 
likely not be deceptive if the marketer accompanied it with clear 
and prominent language clearly conveying that the seal refers only 
to specific and limited benefits. For example, the seal could state: 
``Virtually all products impact the environment. For details on 
which attributes we evaluated, go to [a Web site that discusses this 
product].'' The referenced Web page provides a detailed summary of 
the examined environmental attributes. A reference to a Web site is 
appropriate because the additional information provided on the Web 
site is not necessary to prevent the advertisement from being 
misleading. As always, the marketer also should ensure that the 
advertisement does not imply other deceptive claims, and that the 
certifier's criteria are sufficiently rigorous to substantiate all 
material claims reasonably communicated by the certification.
    Example 8: Great Paper Company sells photocopy paper with 
packaging that has a seal of approval from the No Chlorine Products 
Association, a non-profit third-party association. Great Paper 
Company paid the No Chlorine Products Association a reasonable fee 
for the certification. Consumers would reasonably expect that 
marketers have to pay for certification. Therefore, there are no 
material connections between Great Paper Company and the No Chlorine 
Products Association. The claim would not be deceptive.


Sec.  260.7  Compostable Claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is compostable.
    (b) A marketer claiming that an item is compostable should have 
competent and reliable scientific evidence that all the materials in 
the item will break down into, or otherwise become part of, usable 
compost (e.g., soil-conditioning material, mulch) in a safe and timely 
manner (i.e., in approximately the same time as the materials with 
which it is composted) in an appropriate composting facility, or in a 
home compost pile or device.
    (c) A marketer should clearly and prominently qualify compostable 
claims

[[Page 62128]]

to the extent necessary to avoid deception if:
    (1) The item cannot be composted safely or in a timely manner in a 
home compost pile or device; or
    (2) The claim misleads reasonable consumers about the environmental 
benefit provided when the item is disposed of in a landfill.
    (d) To avoid deception about the limited availability of municipal 
or institutional composting facilities, a marketer should clearly and 
prominently qualify compostable claims if such facilities are not 
available to a substantial majority of consumers or communities where 
the item is sold.

    Example 1: A manufacturer indicates that its unbleached coffee 
filter is compostable. The unqualified claim is not deceptive, 
provided the manufacturer has substantiation that the filter can be 
converted safely to usable compost in a timely manner in a home 
compost pile or device. If so, the extent of local municipal or 
institutional composting facilities is irrelevant.
    Example 2: A garden center sells grass clipping bags labeled as 
``Compostable in California Municipal Yard Trimmings Composting 
Facilities.'' When the bags break down, however, they release toxins 
into the compost. The claim is deceptive if the presence of these 
toxins prevents the compost from being usable.
    Example 3: A manufacturer makes an unqualified claim that its 
package is compostable. Although municipal or institutional 
composting facilities exist where the product is sold, the package 
will not break down into usable compost in a home compost pile or 
device. To avoid deception, the manufacturer should clearly and 
prominently disclose that the package is not suitable for home 
composting.
    Example 4: Nationally marketed lawn and leaf bags state 
``compostable'' on each bag. The bags also feature text disclosing 
that the bag is not designed for use in home compost piles. Yard 
trimmings programs in many communities compost these bags, but such 
programs are not available to a substantial majority of consumers or 
communities where the bag is sold. The claim is deceptive because it 
likely conveys that composting facilities are available to a 
substantial majority of consumers or communities. To avoid 
deception, the marketer should clearly and prominently indicate the 
limited availability of such programs. A marketer could state 
``Appropriate facilities may not exist in your area,'' or provide 
the approximate percentage of communities or consumers for which 
such programs are available.
    Example 5: A manufacturer sells a disposable diaper that states, 
``This diaper can be composted if your community is one of the 50 
that have composting facilities.'' The claim is not deceptive if 
composting facilities are available as claimed and the manufacturer 
has substantiation that the diaper can be converted safely to usable 
compost in solid waste composting facilities.
    Example 6: A manufacturer markets yard trimmings bags only to 
consumers residing in particular geographic areas served by county 
yard trimmings composting programs. The bags meet specifications for 
these programs and are labeled, ``Compostable Yard Trimmings Bag for 
County Composting Programs.'' The claim is not deceptive. Because 
the bags are compostable where they are sold, a qualification is not 
needed to indicate the limited availability of composting 
facilities.


Sec.  260.8  Degradable claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is degradable, biodegradable, oxo-degradable, 
oxo-biodegradable, or photodegradable. The following guidance for 
degradable claims also applies to biodegradable, oxo-degradable, oxo-
biodegradable, and photodegradable claims.
    (b) A marketer making an unqualified degradable claim should have 
competent and reliable scientific evidence that the entire item will 
completely break down and return to nature (i.e., decompose into 
elements found in nature) within a reasonably short period of time 
after customary disposal.
    (c) It is deceptive to make an unqualified degradable claim for 
items entering the solid waste stream if the items do not completely 
decompose within one year after customary disposal. Unqualified 
degradable claims for items that are customarily disposed in landfills, 
incinerators, and recycling facilities are deceptive because these 
locations do not present conditions in which complete decomposition 
will occur within one year.
    (d) Degradable claims should be qualified clearly and prominently 
to the extent necessary to avoid deception about:
    (1) The product's or package's ability to degrade in the 
environment where it is customarily disposed; and
    (2) The rate and extent of degradation.

    Example 1: A marketer advertises its trash bags using an 
unqualified ``degradable'' claim. The marketer relies on soil burial 
tests to show that the product will decompose in the presence of 
water and oxygen. Consumers, however, place trash bags into the 
solid waste stream, which customarily terminates in incineration 
facilities or landfills where they will not degrade within one year. 
The claim is, therefore, deceptive.
    Example 2: A marketer advertises a commercial agricultural 
plastic mulch film with the claim ``Photodegradable,'' and clearly 
and prominently qualifies the term with the phrase ``Will break down 
into small pieces if left uncovered in sunlight.'' The advertiser 
possesses competent and reliable scientific evidence that within one 
year, the product will break down, after being exposed to sunlight, 
into sufficiently small pieces to become part of the soil. Thus, the 
qualified claim is not deceptive. Because the claim is qualified to 
indicate the limited extent of breakdown, the advertiser need not 
meet the consumer expectations for an unqualified photodegradable 
claim, i.e., that the product will not only break down, but also 
will decompose into elements found in nature.
    Example 3: A marketer advertises its shampoo as 
``biodegradable'' without qualification. The advertisement makes 
clear that only the shampoo, and not the bottle, is biodegradable. 
The marketer has competent and reliable scientific evidence 
demonstrating that the shampoo, which is customarily disposed in 
sewage systems, will break down and decompose into elements found in 
nature in a reasonably short period of time in the sewage system 
environment. Therefore, the claim is not deceptive.
    Example 4: A plastic six-pack ring carrier is marked with a 
small diamond. Several state laws require that the carriers be 
marked with this symbol to indicate that they meet certain 
degradability standards if the carriers are littered. The use of the 
diamond by itself, in an inconspicuous location, does not constitute 
a degradable claim. Consumers are unlikely to interpret an 
inconspicuous diamond symbol, without more, as an unqualified 
photodegradable claim.\46\
---------------------------------------------------------------------------

    \46\ The Guides' treatment of unqualified degradable claims is 
intended to help prevent deception and is not intended to establish 
performance standards to ensure the degradability of products when 
littered.
---------------------------------------------------------------------------

    Example 5:  A fiber pot containing a plant is labeled 
``biodegradable.'' The pot is customarily buried in the soil along 
with the plant. Once buried, the pot fully decomposes during the 
growing season, allowing the roots of the plant to grow into the 
surrounding soil. The unqualified claim is not deceptive.


Sec.  260.9  Free-of claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product, package, or service is free of, or does not contain or 
use, a substance. Such claims should be clearly and prominently 
qualified to the extent necessary to avoid deception.
    (b) A truthful claim that a product, package, or service is free 
of, or does not contain or use, a substance may nevertheless be 
deceptive if:
    (1) The product, package, or service contains or uses substances 
that pose the same or similar environmental risks as the substance that 
is not present; or
    (2) The substance has not been associated with the product 
category.
    (c) Depending on the context, a free-of or does-not-contain claim 
is appropriate even for a product, package, or service that contains or 
uses a trace amount of a substance if:
    (1) The level of the specified substance is no more than that which 
would be found as an acknowledged trace contaminant or background level 
\47\;
---------------------------------------------------------------------------

    \47\ ``Trace contaminant'' and ``background level'' are 
imprecise terms, although allowable manufacturing ``trace 
contaminants'' may be defined according to the product area 
concerned. What constitutes a trace amount or background level 
depends on the substance at issue, and requires a case-by-case 
analysis.

---------------------------------------------------------------------------

[[Page 62129]]

    (2) The substance's presence does not cause material harm that 
consumers typically associate with that substance; and
    (3) The substance has not been added intentionally to the product.

    Example 1: A package of t-shirts is labeled ``Shirts made with a 
chlorine-free bleaching process.'' The shirts, however, are bleached 
with a process that releases a reduced, but still significant, 
amount of the same harmful byproducts associated with chlorine 
bleaching. The claim overstates the product's benefits because 
reasonable consumers likely would interpret it to mean that the 
product's manufacture does not cause any of the environmental risks 
posed by chlorine bleaching. A substantiated claim, however, that 
the shirts were ``bleached with a process that releases 50% less of 
the harmful byproducts associated with chlorine bleaching'' would 
not be deceptive.
    Example 2: A manufacturer advertises its insulation as 
``formaldehyde free.'' Although the manufacturer does not use 
formaldehyde as a binding agent to produce the insulation, tests 
show that the insulation still emits trace amounts of formaldehyde. 
The seller has substantiation that formaldehyde is present in trace 
amounts in virtually all indoor and (to a lesser extent) outdoor 
environments and that its insulation emits less formaldehyde than is 
typically present in outdoor environments. Further, the seller has 
substantiation that the trace amounts of formaldehyde emitted by the 
insulation do not cause material harm that consumers typically 
associate with formaldehyde. In this context, the trace levels of 
formaldehyde emissions likely are inconsequential to consumers. 
Therefore, the seller's free-of claim would not be deceptive.


Sec.  260.10  Non-toxic claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product, package, or service is non-toxic. Non-toxic claims 
should be clearly and prominently qualified to the extent necessary to 
avoid deception.
    (b) A non-toxic claim likely conveys that a product, package, or 
service is non-toxic both for humans and for the environment generally. 
Therefore, marketers making non-toxic claims should have competent and 
reliable scientific evidence that the product, package, or service is 
non-toxic for humans and for the environment or should clearly and 
prominently qualify their claims to avoid deception.

    Example: A marketer advertises a cleaning product as 
``essentially non-toxic'' and ``practically non-toxic.'' The 
advertisement likely conveys that the product does not pose any risk 
to humans or the environment, including household pets. If the 
cleaning product poses no risk to humans but is toxic to the 
environment, the claims would be deceptive.


Sec.  260.11  Ozone-safe and ozone-friendly claims.

    It is deceptive to misrepresent, directly or by implication, that a 
product, package, or service is safe for, or friendly to, the ozone 
layer or the atmosphere.

    Example 1: A product is labeled ``ozone-friendly.'' The claim is 
deceptive if the product contains any ozone-depleting substance, 
including those substances listed as Class I or Class II chemicals 
in Title VI of the Clean Air Act Amendments of 1990, Public Law. 
101-549, and others subsequently designated by EPA as ozone-
depleting substances. These chemicals include chlorofluorocarbons 
(CFCs), halons, carbon tetrachloride, 1,1,1-trichloroethane, methyl 
bromide, hydrobromofluorocarbons, and hydrochlorofluorocarbons 
(HCFCs).
    Example 2: An aerosol air freshener is labeled ``ozone-
friendly.'' Some of the product's ingredients are volatile organic 
compounds (VOCs) that may cause smog by contributing to ground-level 
ozone formation. The claim likely conveys that the product is safe 
for the atmosphere as a whole, and, therefore, is deceptive.


Sec.  260.12  Recyclable claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is recyclable. A product or package should 
not be marketed as recyclable unless it can be collected, separated, or 
otherwise recovered from the waste stream through an established 
recycling program for reuse or use in manufacturing or assembling 
another item.
    (b) Marketers should clearly and prominently qualify recyclable 
claims to the extent necessary to avoid deception about the 
availability of recycling programs and collection sites to consumers.
    (1) When recycling facilities are available to a substantial 
majority of consumers or communities where the item is sold, marketers 
can make unqualified recyclable claims. The term ``substantial 
majority,'' as used in this context, means at least 60 percent.
    (2) When recycling facilities are available to less than a 
substantial majority of consumers or communities where the item is 
sold, marketers should qualify all recyclable claims. Marketers may 
always qualify recyclable claims by stating the percentage of consumers 
or communities that have access to facilities that recycle the item. 
Alternatively, marketers may use qualifications that vary in strength 
depending on facility availability. The lower the level of access to an 
appropriate facility is, the more strongly the marketer should 
emphasize the limited availability of recycling for the product. For 
example, if recycling facilities are available to slightly less than a 
substantial majority of consumers or communities where the item is 
sold, a marketer may qualify a recyclable claim by stating: ``This 
product [package] may not be recyclable in your area,'' or ``Recycling 
facilities for this product [package] may not exist in your area.'' If 
recycling facilities are available only to a few consumers, marketers 
should use stronger clarifications. For example, a marketer in this 
situation may qualify its recyclable claim by stating: ``This product 
[package] is recyclable only in the few communities that have 
appropriate recycling facilities.''
    (c) Marketers can make unqualified recyclable claims for a product 
or package if the entire product or package, excluding minor incidental 
components, is recyclable. For items that are partially made of 
recyclable components, marketers should clearly and prominently qualify 
the recyclable claim to avoid deception about which portions are 
recyclable.
    (d) If any component significantly limits the ability to recycle 
the item, any recyclable claim would be deceptive. An item that is made 
from recyclable material, but, because of its shape, size, or some 
other attribute, is not accepted in recycling programs, should not be 
marketed as recyclable.\48\
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    \48\ Batteries labeled in accordance with the Mercury-Containing 
and Rechargeable Battery Management Act, 42 U.S.C. 14322(b), are 
deemed to be in compliance with these Guides.

    Example 1: A packaged product is labeled with an unqualified 
claim, ``recyclable.'' It is unclear from the type of product and 
other context whether the claim refers to the product or its 
package. The unqualified claim likely conveys that both the product 
and its packaging, except for minor, incidental components, can be 
recycled. Unless the manufacturer has substantiation for both 
messages, it should clearly and prominently qualify the claim to 
indicate which portions are recyclable.
    Example 2: A nationally marketed plastic yogurt container 
displays the Resin Identification Code (RIC) \49\ (which consists of 
a design of arrows in a triangular shape containing a number in the 
center and an abbreviation identifying the component plastic resin) 
on the front label of the container, in close proximity to the 
product name and logo. This conspicuous use of the RIC constitutes a 
recyclable claim. Unless recycling facilities for this container are 
available to a substantial majority of consumers or communities, the 
manufacturer should qualify the claim to disclose the

[[Page 62130]]

limited availability of recycling programs. If the manufacturer 
places the RIC, without more, in an inconspicuous location on the 
container (e.g., embedded in the bottom of the container), it would 
not constitute a recyclable claim.
---------------------------------------------------------------------------

    \49\ The RIC, formerly known as the Society of the Plastics 
Industry, Inc. (SPI) code, is now covered by ASTM D 7611.
---------------------------------------------------------------------------

    Example 3: A container can be burned in incinerator facilities 
to produce heat and power. It cannot, however, be recycled into 
another product or package. Any claim that the container is 
recyclable would be deceptive.
    Example 4: A paperboard package is marketed nationally and 
labeled either ``Recyclable where facilities exist'' or ``Recyclable 
B Check to see if recycling facilities exist in your area.'' 
Recycling programs for these packages are available to some 
consumers, but not available to a substantial majority of consumers 
nationwide. Both claims are deceptive because they do not adequately 
disclose the limited availability of recycling programs. To avoid 
deception, the marketer should use a clearer qualification, such as 
one suggested in Sec.  260.12(b)(2).
    Example 5: Foam polystyrene cups are advertised as ``Recyclable 
in the few communities with facilities for foam polystyrene cups.'' 
A half-dozen major metropolitan areas have established collection 
sites for recycling those cups. The claim is not deceptive because 
it clearly discloses the limited availability of recycling programs.
    Example 6: A package is labeled ``Includes some recyclable 
material.'' The package is composed of four layers of different 
materials, bonded together. One of the layers is made from 
recyclable material, but the others are not. While programs for 
recycling the 25 percent of the package that consists of recyclable 
material are available to a substantial majority of consumers, only 
a few of those programs have the capability to separate the 
recyclable layer from the non-recyclable layers. The claim is 
deceptive for two reasons. First, it does not specify the portion of 
the product that is recyclable. Second, it does not disclose the 
limited availability of facilities that can process multi-layer 
products or materials. An appropriately qualified claim would be 
``25 percent of the material in this package is recyclable in the 
few communities that can process multi-layer products.''
    Example 7: A product container is labeled ``recyclable.'' The 
marketer advertises and distributes the product only in Missouri. 
Collection sites for recycling the container are available to a 
substantial majority of Missouri residents but are not yet available 
nationally. Because programs are available to a substantial majority 
of consumers where the product is sold, the unqualified claim is not 
deceptive.
    Example 8: A manufacturer of one-time use cameras, with dealers 
in a substantial majority of communities, operates a take-back 
program that collects those cameras through all of its dealers. The 
manufacturer reconditions the cameras for resale and labels them 
``Recyclable through our dealership network.'' This claim is not 
deceptive, even though the cameras are not recyclable through 
conventional curbside or drop-off recycling programs.
    Example 9: A manufacturer advertises its toner cartridges for 
computer printers as ``Recyclable. Contact your local dealer for 
details.'' Although all of the company's dealers recycle cartridges, 
the dealers are not located in a substantial majority of communities 
where cartridges are sold. Therefore, the claim is deceptive. The 
manufacturer should qualify its claim consistent with Sec.  
260.11(b)(2).
    Example 10: An aluminum can is labeled ``Please Recycle.'' This 
statement likely conveys that the can is recyclable. If collection 
sites for recycling these cans are available to a substantial 
majority of consumers or communities, the marketer does not need to 
qualify the claim.


Sec.  260.13  Recycled content claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is made of recycled content. Recycled content 
includes recycled raw material, as well as used,\50\ reconditioned, and 
re-manufactured components.
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    \50\ The term ``used'' refers to parts that are not new and that 
have not undergone any remanufacturing or reconditioning.
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    (b) It is deceptive to represent, directly or by implication, that 
an item contains recycled content unless it is composed of materials 
that have been recovered or otherwise diverted from the waste stream, 
either during the manufacturing process (pre-consumer), or after 
consumer use (post-consumer). If the source of recycled content 
includes pre-consumer material, the advertiser should have 
substantiation that the pre-consumer material would otherwise have 
entered the waste stream. Recycled content claims may--but do not have 
to--distinguish between pre-consumer and post-consumer materials. Where 
a marketer distinguishes between pre-consumer and post-consumer 
materials, it should have substantiation for any express or implied 
claim about the percentage of pre-consumer or post-consumer content in 
an item.
    (c) Marketers can make unqualified claims of recycled content if 
the entire product or package, excluding minor, incidental components, 
is made from recycled material. For items that are partially made of 
recycled material, the marketer should clearly and prominently qualify 
the claim to avoid deception about the amount or percentage, by weight, 
of recycled content in the finished product or package.
    (d) For products that contain used, reconditioned, or re-
manufactured components, the marketer should clearly and prominently 
qualify the recycled content claim to avoid deception about the nature 
of such components. No such qualification is necessary where it is 
clear to reasonable consumers from context that a product's recycled 
content consists of used, reconditioned, or re-manufactured components.

    Example 1:  A manufacturer collects spilled raw material and 
scraps from the original manufacturing process. After a minimal 
amount of reprocessing, the manufacturer combines the spills and 
scraps with virgin material for use in production of the same 
product. A recycled content claim is deceptive since the spills and 
scraps are normally reused by industry within the original 
manufacturing process and would not normally have entered the waste 
stream.
    Example 2: Fifty percent of a greeting card's fiber weight is 
composed from paper that was diverted from the waste stream. Of this 
material, 30% is post-consumer and 20% is pre-consumer. It would not 
be deceptive if the marketer claimed that the card either ``contains 
50% recycled fiber'' or ``contains 50% total recycled fiber, 
including 30% post-consumer fiber.''
    Example 3: A paperboard package with 20% recycled fiber by 
weight is labeled ``20% post-consumer recycled fiber.'' The recycled 
content was composed of overrun newspaper stock never sold to 
customers. Because the newspapers never reached consumers, the claim 
is deceptive.
    Example 4: A product in a multi-component package, such as a 
paperboard box in a shrink-wrapped plastic cover, indicates that it 
has recycled packaging. The paperboard box is made entirely of 
recycled material, but the plastic cover is not. The claim is 
deceptive because, without qualification, it suggests that both 
components are recycled. A claim limited to the paperboard box would 
not be deceptive.
    Example 5: A manufacturer makes a package from laminated layers 
of foil, plastic, and paper, although the layers are 
indistinguishable to consumers. The label claims that ``one of the 
three layers of this package is made of recycled plastic.'' The 
plastic layer is made entirely of recycled plastic. The claim is not 
deceptive, provided the recycled plastic layer constitutes a 
significant component of the entire package.
    Example 6:  A frozen dinner package is composed of a plastic 
tray inside a cardboard box. It states ``package made from 30% 
recycled material.'' Each packaging component is one-half the weight 
of the total package. The box is 20% recycled content by weight, 
while the plastic tray is 40% recycled content by weight. The claim 
is not deceptive, since the average amount of recycled material is 
30%.
    Example 7: A manufacturer labels a paper greeting card ``50% 
recycled fiber.'' The manufacturer purchases paper stock from 
several sources, and the amount of recycled fiber in the stock 
provided by each source varies. If the 50% figure is based on the 
annual weighted average of recycled material purchased from the 
sources after accounting for fiber loss during the papermaking 
production process, the claim is not deceptive.
    Example 8:  A packaged food product is labeled with a three-
chasing-arrows symbol

[[Page 62131]]

(a M[ouml]bius loop) without explanation. By itself, the symbol 
likely conveys that the packaging is both recyclable and made 
entirely from recycled material. Unless the marketer has 
substantiation for both messages, the claim should be qualified. The 
claim may need to be further qualified, to the extent necessary, to 
disclose the limited availability of recycling programs and/or the 
percentage of recycled content used to make the package.
    Example 9:  In an office supply catalog, a manufacturer 
advertises its printer toner cartridges ``65% recycled.'' The 
cartridges contain 25% recycled raw materials and 40% reconditioned 
parts. The claim is deceptive because reasonable consumers likely 
would not know or expect that a cartridge's recycled content 
consists of reconditioned parts. It would not be deceptive if the 
manufacturer claimed ``65% recycled content; including 40% from 
reconditioned parts.''
    Example 10:  A store sells both new and used sporting goods. One 
of the items for sale in the store is a baseball helmet that, 
although used, is no different in appearance than a brand new item. 
The helmet bears an unqualified ``Recycled'' label. This claim is 
deceptive because reasonable consumers likely would believe that the 
helmet is made of recycled raw materials, when it is, in fact, a 
used item. An acceptable claim would bear a disclosure clearly and 
prominently stating that the helmet is used.
    Example 11: An automotive dealer, automobile recycler, or other 
qualified entity recovers a serviceable engine from a wrecked 
vehicle. Without repairing, rebuilding, re-manufacturing, or in any 
way altering the engine or its components, the dealer attaches a 
``Recycled'' label to the engine, and offers it for sale in its used 
auto parts store. In this situation, an unqualified recycled content 
claim likely is not deceptive because reasonable consumers in the 
automotive context likely would understand that the engine is used 
and has not undergone any rebuilding.
    Example 12:  An automobile parts dealer, automobile recycler, or 
other qualified entity purchases a transmission that has been 
recovered from a salvaged or end-of-life vehicle. Eighty-five 
percent of the transmission, by weight, was rebuilt and 15% 
constitutes new materials. After rebuilding \51\ the transmission in 
accordance with industry practices, the dealer packages it for 
resale in a box labeled ``Rebuilt Transmission,'' or ``Rebuilt 
Transmission (85% recycled content from rebuilt parts),'' or 
``Recycled Transmission (85% recycled content from rebuilt parts).'' 
Given consumer perception in the automotive context, these claims 
are not deceptive.
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    \51\ The term ``rebuilding'' means that the dealer dismantled 
and reconstructed the transmission as necessary, cleaned all of its 
internal and external parts and eliminated rust and corrosion, 
restored all impaired, defective or substantially worn parts to a 
sound condition (or replaced them if necessary), and performed any 
operations required to put the transmission in sound working 
condition.
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Sec.  260.14  Refillable claims.

    It is deceptive to misrepresent, directly or by implication, that a 
package is refillable. A marketer should not make an unqualified 
refillable claim unless the marketer provides the means for refilling 
the package. The marketer may either provide a system for the 
collection and refill of the package, or offer for sale a product that 
consumers can purchase to refill the original package.
    Example 1: A container is labeled ``refillable three times.'' 
The manufacturer has the capability to refill returned containers 
and can show that the container will withstand being refilled at 
least three times. The manufacturer, however, has established no 
collection program. The unqualified claim is deceptive because there 
is no means to return the container to the manufacturer for refill.
    Example 2: A small bottle of fabric softener states that it is 
in a ``handy refillable container.'' In the same market area, the 
manufacturer also sells a large-sized bottle that consumers use to 
refill the smaller bottles. The claim is not deceptive because there 
is a reasonable means for the consumer to refill the smaller 
container.


Sec.  260.15  Renewable energy claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is made with renewable energy or that a 
service uses renewable energy. A marketer should not make unqualified 
renewable energy claims, directly or by implication, if fossil fuel, or 
electricity derived from fossil fuel, is used to manufacture any part 
of the advertised item or is used to power any part of the advertised 
service, unless the marketer has matched such non-renewable energy use 
with renewable energy certificates.
    (b) Research suggests that reasonable consumers may interpret 
renewable energy claims differently than marketers may intend. Unless 
marketers have substantiation for all their express and reasonably 
implied claims, they should clearly and prominently qualify their 
renewable energy claims. For instance, marketers may minimize the risk 
of deception by specifying the source of the renewable energy (e.g., 
wind or solar energy).
    (c) It is deceptive to make an unqualified ``made with renewable 
energy'' claim unless all, or virtually all, of the significant 
manufacturing processes involved in making the product or package are 
powered with renewable energy or non-renewable energy matched by 
renewable energy certificates. When this is not the case, marketers 
should clearly and prominently specify the percentage of renewable 
energy that powered the significant manufacturing processes involved in 
making the product or package.
    (d) If a marketer generates renewable electricity but sells 
renewable energy certificates for all of that electricity, it would be 
deceptive for the marketer to represent, directly or by implication, 
that it uses renewable energy.

    Example 1:  A marketer advertises its clothing line as ``made 
with wind power.'' The marketer buys wind energy for 50% of the 
energy it uses to make the clothing in its line. The marketer's 
claim is deceptive because reasonable consumers likely interpret the 
claim to mean that the power was composed entirely of renewable 
energy. If the marketer stated, ``We purchase wind energy for half 
of our manufacturing facilities,'' the claim would not be deceptive.
    Example 2: A company purchases renewable energy from a portfolio 
of sources that includes a mix of solar, wind, and other renewable 
energy sources in combinations and proportions that vary over time. 
The company uses renewable energy from that portfolio to power all 
of the significant manufacturing processes involved in making its 
product. The company advertises its product as ``made with renewable 
energy.'' The claim would not be deceptive if the marketer clearly 
and prominently disclosed all renewable energy sources. 
Alternatively, the claim would not be deceptive if the marketer 
clearly and prominently stated, ``made from a mix of renewable 
energy sources,'' and specified the renewable source that makes up 
the greatest percentage of the portfolio. The company may calculate 
which renewable energy source makes up the greatest percentage of 
the portfolio on an annual basis.
    Example 3: An automobile company uses 100% non-renewable energy 
to produce its cars. The company purchases renewable energy 
certificates to match the non-renewable energy that powers all of 
the significant manufacturing processes for the seats, but no other 
parts, of its cars. If the company states, ``The seats of our cars 
are made with renewable energy,'' the claim would not be deceptive, 
as long as the company clearly and prominently qualifies the claim 
such as by specifying the renewable energy source.
    Example 4:  A company uses 100% non-renewable energy to 
manufacture all parts of its product, but powers the assembly 
process entirely with renewable energy. If the marketer advertised 
its product as ``assembled using renewable energy,'' the claim would 
not be deceptive.
    Example 5:  A toy manufacturer places solar panels on the roof 
of its plant to generate power, and advertises that its plant is 
``100% solar-powered.'' The manufacturer, however, sells renewable 
energy certificates based on the renewable attributes of all the 
power it generates. Even if the manufacturer uses the electricity 
generated by the solar panels, it has, by selling renewable energy 
certificates, transferred the right to characterize that electricity 
as renewable. The manufacturer's claim is therefore deceptive. It 
also would be deceptive for this manufacturer to advertise that it 
``hosts'' a renewable power facility because reasonable consumers 
likely interpret this claim to mean

[[Page 62132]]

that the manufacturer uses renewable energy. It would not be 
deceptive, however, for the manufacturer to advertise, ``We generate 
renewable energy, but sell all of it to others.''


Sec.  260.16  Renewable materials claims.

    (a) It is deceptive to misrepresent, directly or by implication, 
that a product or package is made with renewable materials.
    (b) Research suggests that reasonable consumers may interpret 
renewable materials claims differently than marketers may intend. 
Unless marketers have substantiation for all their express and 
reasonably implied claims, they should clearly and prominently qualify 
their renewable materials claims. For example, marketers may minimize 
the risk of unintended implied claims by identifying the material used 
and explaining why the material is renewable.
    (c) Marketers should also qualify any ``made with renewable 
materials'' claim unless the product or package (excluding minor, 
incidental components) is made entirely with renewable materials.

    Example 1:  A marketer makes the unqualified claim that its 
flooring is ``made with renewable materials.'' Reasonable consumers 
likely interpret this claim to mean that the flooring also is made 
with recycled content, recyclable, and biodegradable. Unless the 
marketer has substantiation for these implied claims, the 
unqualified ``made with renewable materials'' claim is deceptive. 
The marketer could qualify the claim by stating, clearly and 
prominently, ``Our flooring is made from 100 percent bamboo, which 
grows at the same rate, or faster, than we use it.'' The marketer 
still is responsible for substantiating all remaining express and 
reasonably implied claims.
    Example 2: A marketer's packaging states that ``Our packaging is 
made from 50% plant-based renewable materials. Because we turn fast-
growing plants into bio-plastics, only half of our product is made 
from petroleum-based materials.'' By identifying the material used 
and explaining why the material is renewable, the marketer has 
minimized the risk of unintended claims that the product is made 
with recycled content, recyclable, and biodegradable. The marketer 
has adequately qualified the amount of renewable materials in the 
product.


Sec.  260.17  Source reduction claims.

    It is deceptive to misrepresent, directly or by implication, that a 
product or package has been reduced or is lower in weight, volume, or 
toxicity. Marketers should clearly and prominently qualify source 
reduction claims to the extent necessary to avoid deception about the 
amount of the source reduction and the basis for any comparison.

    Example: An advertiser claims that disposal of its product 
generates ``10% less waste.'' The marketer does not accompany this 
claim with a general environmental benefit claim. Because this claim 
could be a comparison to the advertiser's immediately preceding 
product or to its competitors' products, the advertiser should have 
substantiation for both interpretations. Otherwise, the advertiser 
should clarify which comparison it intends and have substantiation 
for that comparison. A claim of ``10% less waste than our previous 
product'' would not be deceptive if the advertiser has 
substantiation that shows that the current product's disposal 
contributes 10% less waste by weight or volume to the solid waste 
stream when compared with the immediately preceding version of the 
product.

    By direction of the Commission.
Donald S. Clark
Secretary.
[FR Doc. 2012-24713 Filed 10-10-12; 8:45 am]
BILLING CODE 6750-01-P