Welcome to July, a month filled with a symphony of colors in grand fireworks displays, the scent of barbecues and picnics, the contagious cheer of parades, and the tranquil beauty of golden sunsets. July is the peak of summer's vibrant celebration of life with the simple pleasure of long, bright days. May you soak up the sunlight by day and catch fireflies as dusk falls.

In this midyear article, we will consider two actions of the U.S. Environmental Protection Agency (EPA) along with the ramifications for product manufacturers and the building construction industry. In 2024, EPA is revising the voluntary WaterSense high-efficiency faucet specification. EPA has also completed a revision of the voluntary WaterSense high-efficiency specification for tank-type water closets, also known as toilets. EPA states these efforts support water conservation and reflect the agency's need to respond to evolving market conditions, new technological advancements, the need for increased water savings, and the regulatory pressure of states, counties, and cities passing more stringent water efficiency requirements. EPA states that the changes aim to reduce water consumption, address product performance concerns and expand the scope of products covered under the WaterSense program. The changes include new covered product categories, updated performance criteria, such as flow rates and effective flush volume requirements, transition periods and delisting existing WaterSense products.

While these changes may promote water conservation and sustainability, they will also present significant challenges for product manufacturers and the building industry. Let's take a look at some of those challenges.

Challenges for manufacturers

1. R&D and engineering change management costs: The revisions will require manufacturers to either redesign existing products, increase product line extensions and/or develop new products to comply with stricter performance criteria and new product categories. Increases in R&D expenditure and engineering change management will impact profitability and market access and will involve burdensome financial investment and resource allocation, particularly for smaller manufacturers. For example, making the necessary updates to marketing materials, product markings and product packaging to align with the new specifications will result in a significant engineering change management expenditure.
2. Third-party laboratory and certification agency costs: Manufacturers will face increased costs for third-party certifications as they conduct new rounds of third-party laboratory testing to meet the revised specifications. These increased operational costs could be particularly burdensome for smaller manufacturers. The revisions will require manufacturers to delist formerly covered product models, retest and recertify existing covered products, and test and certify new product categories. For example, eliminating the 2:1 effective flush calculation and establishing a singular maximum flush volume requirement for both single-flush toilets and the full-flush mode of dual-flush toilets will incur significant third-party laboratory and certification costs.
3. The transition period and inventory management: Successful regulatory transition periods provide sufficient time to support manufacturer strategic planning to minimize economic losses and to manage the internal and external logistics of addressing product market access and consumer transitions. The EPA is considering a six to 12-month transition period before the revised faucet specification becomes effective. The revised water closet specification becomes effective on July 1, 2025. These timelines pose manufacturer inventory challenges in addressing discontinued product sell-through, updating existing product production line requirements and developing and deploying new production line requirements for new product categories. This poses a significant financial burden for manufacturers to incorporate into current fiscal year budgets. Additionally, products that no longer meet the WaterSense criteria will be in market circulation over very short transition periods, potentially diluting the value of the WaterSense label and affecting consumer trust in manufacturers' brands. Adapting to these changes requires significant manufacturer financial investment and strategic planning to navigate the regulatory landscape and maintain market competitiveness.
4. Market uncertainty and brand impact: The EPA changes may lead to market uncertainty as consumers and industry professionals adapt to the new specifications. There is a risk that the value of the WaterSense label could be diluted if consumers perceive the changes as negatively reducing product performance, particularly in terms of flush efficacy and flow rates. Additionally, the pause on brand monitoring activities during the transition periods could lead to market confusion as counterfeit products flood the marketplace. WaterSense must invest in marketing and consumer education to maintain confidence in WaterSense-labeled products.

Additionally, plumbing system designs must be revised to address the reductions in water consumption, water discharge and new product categories. This will be particularly problematic in addressing pressure losses in multi-story plumbing system designs because WaterSense-labeled products will be low-flow and non-field adjustable. While the revised specifications aim to promote water efficiency and contribute to long-term water conservation goals, the multi-story plumbing system design.

Challenges for the building construction industry

1. Increased project costs: The changes will likely increase the costs of these products. For the building construction industry, this translates into higher overall project costs, potentially affecting the feasibility of certain developments, especially those with tight budgets or fixed funding allocations. This could lead to delays and additional costs as builders and developers adjust their plans, possibly impacting project timelines and financial projections.
2. Specification and design revisions: With such short transition periods, all construction projects must revisit their specifications to accommodate the updated specifications requirements for new product categories, delisted existing products and performance requirements. Additionally, plumbing system designs must be revised to address the reductions in water consumption, water discharge and new product categories. This will be particularly problematic in addressing pressure losses in multi-story plumbing system designs because WaterSense-labeled products will be low-flow and non-field adjustable. While the revised specifications aim to promote water efficiency and contribute to long-term water conservation goals, the multi-story plumbing system design challenges could deter the construction industry from specifying WaterSense-labeled products.
3. Supply chain disruptions: As manufacturers work to align their product offerings with the revised specifications over short transition periods, there could be short-term disruptions in product availability. This situation will likely force builders to seek alternative product solutions, delay projects, or compromise on design and sustainability goals, such as LEED certification.

The EPA's proposed revisions to the voluntary high-efficiency WaterSense specifications for faucets and the completed revisions to water closets may improve water efficiency and sustainability. However, these changes pose considerable challenges for manufacturers and the building construction industry, including increased costs, regulatory and market uncertainty, and potential disruptions to supply chains and project timelines. Contact Regulosity for a tailored analysis specific to your organization's needs. Let us guide you through this complex landscape. We're here to help!