The Next Installment of Buy Clean California and the Steel Supply Chain – Q&A
Q: When do I need to provide these EPDs? Is it at the time of bid, installation, or project close out?
A: (JOHN) This will depend on each individual agency in terms of how they are implementing the requirements, but clearly will either be at the time of bid or the time of bid acceptance. My recommendation is to plan to submit that information with your bid so there is no question moving forward. No material will be able to be installed on a project unless the state has the documentation that is required.
Q: So, the EPDs that will apply are industry averages with adjustment factors?
A: (JOHN) No, the required EPDs have to be producer specific or facility specific EPDs. They have to be from a specific producer, and they have to show GWP levels broken out by facility. To those specific facility numbers from a mill, there may be industry average fabrication impacts, which is less than 10% of the overall impact, that has been added to those. For instance, for hot-rolled structural sections, you must have an EPD produced by a mill like Steel Dynamics, Gerdau, or Nucor to be able to comply. The thresholds were set against an Industry average, but compliance is required to show that the individual producer meets that threshold requirement.
Q: I presume this also applies to affordable housing projects funded by the state?
A: (JOHN) I would assume it does. Again, this is one of those challenges where it depends on who is doing the construction, how is it being handled, and where is the contract coming from. If it has state money in it and it is a state contract, it should apply to that project. If you get a question or a bid solicitation that comes in for that type of project, my advice would be to push it all the way back up and say, wait a minute – we were told when tax dollars are involved to assume Buy Clean California. Unless you can provide me something in writing that says Buy Clean California does not apply (this is at the agency level), then I’m going to assume that it does.
Q: Are there multiple PCRs available that meet Buy Clean California for steel or is UL the only organization to produce a PCR for Part B, Designated Steel Construction Products EPD requirements?
A: (MAX) Yes, I believe the DGS website is clear that for structural steel, the UL PCR we went over in this webinar is the one that all EPDs must comply to. The exception is for EPDs certified under the previous version (v1) of this same PCR while it was in effect.
Q: Is post-manufacture freight to other stops along the supply chain a factor in calculation?
A: (JOSEPH) No, it is not included in this, but John maybe you have a different slant?
(JOHN) There are a couple ways to answer that. For a mill produced EPD that only deals with mill material, it includes only the transportation to get the raw material to the mill. It ends at the gate of the mill. If you have an EPD that shows fabrication impacts, then it also shows the transportation from the mill to the service center to the fabricator and ends at the gate of the fabricator. That is all considered in the AISC industry average fabrication impacts so when that subtracted it out, you are really only looking at the impacts at the mill gate.
Q: Are there exemptions for steel other than Caltrans (i.e. small quantities of a component)? For many projects, material is purchased as fabricated components from various suppliers. These suppliers would buy small quantities to fabricate these various components. Many times, these suppliers are international suppliers. Under the current restrictions, these suppliers would have to procure material from the USA, which would ultimately make the supplier uncompetitive.
(COMMENT from Joseph) This question boils down to exemptions and what about small componentry that would come from foreign suppliers.
A: (JOHN) As you saw with the CalTrans exemption, each individual agency will set their own exemption levels. Caltrans is 5,000 pounds from any one mill for structural steel. So that could be different between different agencies. Those haven’t all been published yet. You will have to look at that carefully in any bid solicitation and ask those questions of the agency. If you’re talking about a component that is produced elsewhere and then brought to the site, the first question I would have is that component structural steel or is it simply using something like a wide flange or a plate in its manufacture. If it’s not integral to the structural frame of the building, it’s not structural steel and it wouldn’t be included. If it’s actually a structural steel product, as defined in the Code of Standard Practice, that is being delivered as a product to the project site, then it would be included. I doubt if that is often going to be the case. My guess is what you’re going to see is it has to be equivalent to a mill material delivered as a product fabricated to that project site.
Q: What about federal money funneled through the state? Or just a federal tax funded project?
A: (JOHN) If the projects under a state contract, it’s covered. It’s not really the dollars even though I said tax dollars – it’s whether it’s a state contract or not. If Federal money flows through a state and the project is going to be completed under the standard contracts with the state of California, it would be under Buy Clean California.
Q: If I get a rush change order and can’t get material from the same mill, what do I do?
A: (MAX) Like we covered in the exemptions, you could try to seek an exemption based on one of the published reasons, which is an unreasonable delay in project schedule. Again, this is something you’d work out to get that waiver with the appropriate agency.
(JOHN) Or you could get material from a different mill as long as you had a EPD that was compliant from that mill.
Q: Can I use steel out of my shop’s inventory left over from previous projects or must I purchase all new material for the EPD requirements?
A: (MAX) You can use steel left over in your shop from your inventory as long as you’re able to show that it came from a mill that is publishing a compliant EPD. My understanding is the dots are not being connected to such a fine degree to make sure that say the steel came from the mill at a time when the certain EPD was relevant or not expired. We’re not looking to match it up to that fine of detail. Rather, you just have to be able to show that the inventory you have originated from a mill that is currently producing a valid EPD.
Q: Do I have to have dual stock on material the same size, one for normal purchases and one for the state?
A: (JOHN) No, you do not have to. If all of your material is compliant with the state requirements you certainly would not have a dual stock. But you do have to have material that meets the state requirements if you’re going to supply material to a state project. If you want to have a second stock from a different source that doesn’t comply and use that for non-state projects, you certainly could do that, but you are going to have to keep track of your inventory in terms of where it has come from.
Q: Regarding the material brought into the state of California from outside the state and from sources outside the country …
A: (JOHN) If it’s on a project that is covered by a state contract in California, it doesn’t matter where it originated. The fabricator could be in Rhode Island. If they’re bringing a fabricated product into California, the steel in that fabricated product has to be compliant with Buy Clean California.
Q: I’m from Marin County, where there are global warming limits for concrete mixes. Those are specific by strength and mix type. Do we have to have different EPDs for different grades and strength of steel?
A: (MAX) The answer is no; you don’t have to differentiate between grades. Currently the EPDs, whether they’re industry average or they’re mill specific, are not differentiating between grades of steel. The reason for that is because although there is a theoretical difference in environmental impact between grade, it’s extremely small relative to the final numbers. So close reading of any of those EPDs will show that multiple grades are all included in the same scope for a single EPD.
Q: Do you believe this will reduce global warming?
A: (MAX) Good question. I think it’s hard to know what the short and long-term impacts will be. Short-term, I think there are lots of ways that the steel supply chain can flex and route material in different ways that are appropriate for the business decisions of the mills. It’s possible that the impact could be low, however long-term I think the impact would be greater. Long-term, producers and people are paying attention to what has to go where and are realizing that this kind of regulation, whether it’s at the state level, the federal level, or from the private sector is more and more of a focus. I think that the larger and longer-term movement will put pressures and provide incentives for the carbon footprint of steel to reduce.
A: (JOHN) I agree with Max. I think the purchasing power of an individual state probably isn’t large enough to avoid just the shifting of inventory and where material is coming from on its own to reduce global warming, but I think it sets a precedent for the selection of materials that can spill over into the private sector and to other states that will have that ultimate impact.
Q: Can you comment on the efficacy of the following strategy for a service center: distributor provides its fabricator customer EPDs for all its supply mills and assigns the responsibility for matching test reports on a delivery-to-delivery basis to the set of EPDs provided.
A: (MAX) That’s certainly one way to do it. To be clear, everybody realizes the material traceability already exists. We already have the MTRs supplied so a fabricator already knows which mill their product originated from. The way of making one more connection to make sure you’re providing the correct EPD matched up with that mill really is the fabricator’s burden. The specific question was what if a steel service center just provides all EPDs that they may produce and then let the fabricator match it up. That could work and places slightly more burden on the fabricator to then make that connection. If you’re a service center, I recommend having some frank conversations with your fabricators about what would be most helpful. Maybe you do want to provide an EPD with the MTR for every bundle. Maybe you want to dedicate a portion of your website to matching that up. I think it’s a matter of the service center trying to provide value to their fabricator to help them out.
Q: What do you think the lowest GWP could be for HSS over time?
A: (JOSEPH) Currently, one of the dilemmas the HSS producers have is their dependency on BOF produced coil. Part of that reason is because of the way those coils perform in the rolling process. However, as EAF produced coil improves in both ductility and in shape control in the making of tube, that becomes more and more desirable for the HSS producers. I think in very short period of time, with those improvements we’ll be able to see a significant GWP decrease in the HSS sector. Currently, the numbers are coming in between the 2015 and the 2021 EPD data, the global warming potential dropped significantly. I think that if you take a look at the inputs that go into making up the overall GWP for HSS, the actual production of HSS adds very little to the GWP number. In time, as the industry does convert over and if EAF produced coils still remain based in a preponderance of recycled material, you can see HSS getting closer to a wide flange number, but I can’t predict that it will ever get even with it.
Q: Will AISC’s mill specific EPD list be updated as more EPDs become available?
A: (MAX) I think you’re referring to the list on our website that is listing those links to the mill specific ones. Yes, we’re going to be actively monitoring which US producer EPDs are available in the marketplace and keeping that summary list on our website very up to date.
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