Making ‘Regrettable Substitutions’

On December 29th, 2024, the State of California’s Attorney General’s Office began enforcing the addition of Bisphenol S (BPS) on California’s Prop 65 chemical list. Notably, there is no established “safe-harbor” limit for BPS, meaning that any item with trace amounts of BPS must come with a warning label.  

More recently, the state of Washington banned the use of all phenols in thermal paper, including label paper, effective January 1, 2026. This legislation prohibits the presence of phenols over 200 parts per million. Today, we’re seeing other states propose similar legislation. 

The casus belli against these chemicals has been driven by their ubiquitous presence in our environment and their well-documented toxicity. BPA, for example, has been shown to be an Endocrine-Disrupting Chemical (EDC), meaning it can affect estrogen receptors in the body. This can lead to reproductive disorders, metabolic issues, cardiovascular disease, and neurological aberrations. (Nasty stuff!) 

When BPA fell under scrutiny, many manufacturers switched to BPS. Toxicologists call this a “regrettable substitution” because, while technically a different compound, it has similar toxicity. BPS is also a proven EDC and some research suggests that it may have more adverse effects in certain cellular pathways. 

In advance of the Washington ban, thermal paper suppliers selling in the United States pivoted away from phenols. Washington and California’s actions effectively switched the thermal paper and thermal label paper market away from BPS. The relative speed at which these actions took place is impressive and shows the efficacy of effecting change on the state-level. Yet, problems arise and persist with
these changes.

If we examine Washington more closely, we find the push to eliminate phenols was driven by a desire to protect the public and the environment. As Washington’s Department of Commerce head Mike Fong put it: “Switching to phenol-free thermal receipts is a small but significant step in reducing everyday exposure to toxic chemicals. Our partnership with agencies across the state demonstrates a unified commitment to protect both public health and the environment.” 

The Department of Ecology has even suggested an alternative chemical for thermal paper suppliers to use: Pergafast. As they note in their preliminary report, “Pergafast 201 and e-receipts are safer, feasible, and available alternatives to thermal paper containing bisphenols.” 

While the thermal paper suppliers may not articulate it outright, the vast majority are using Pergafast as their replacement to BPS.

Yet, Pergafast is not a benign chemical. While it has less genotoxicity and neurological toxicity than BPS, it has incredibly high aquatic toxicity and much greater environmental persistence than BPS (see the EPA’s handy toxicity chart below). 

This environmental double whammy means that when thermal paper containing Pergafast is recycled or dumped in landfills, the chemical eventually leaches into waterways, posing long-term risk to aquatic ecosystems. Given this fact, it seems Mr. Fong has a rather abstract idea of environmental protection. 

With the majority of the industry switched to Pergafast, we must ask ourselves: how does this affect our ecosystems, our waterways, and our drinking water? Is Washington measuring this? Why should we consider this change a victory? Yes, we have made slight advancements with human exposure to toxicity, which is commendable, but at what environmental cost? It seems we’ve found ourselves with yet another regrettable substitution.

The second issue with this Washington legislation, and a perennial issue with California’s environmental legislation, is that it effectively forces nationwide change. 

Manufacturers, resellers, and retailers usually lack an effective way to segregate products with different components. Rather than try to manage which products are being sold into Washington and which aren’t, manufacturers are forced to make fundamental shifts in order to meet compliance. While this is relatively manageable when only two states have passed legislation, it becomes impossible when patchwork state legislation multiplies. If, for example, the State of Maine were to pass legislation banning Pergafast in order to protect their treasured marine life, what would the industry do? Switch again! And again and again. This is not a sustainable model.

There is, indeed, a reason we have a federal system. While many libertarians may beg to differ, a federal system offers order and standardization. Such order is particularly important in a vast republic, as we have. 

In particular, the federal government can override state actions using the Supremacy Clause in Article VI of the Constitution. Essentially, that clause allows the federal government to preempt state law when it conflicts with federal law. In the case of thermal paper chemicals, the question rests with the EPA in relation to the Toxic Substances Control Act (TSCA). 

The EPA could consider creating a framework with restrictive rules. They might consider banning high-risk chemicals like BPA or BPS, establish a standard concentration limit, and mandate warning labels if necessary. Such uniformity would provide greater clarity to the industry. Rarely am I in favor of big government, however, when states begin exerting influence beyond their borders, it is best to examine exceptions.

Alex Hoffman is a third-generation family member at Channeled Resources Group, where he serves as General Manager of the Label Division. Alex is currently pursuing his MBA from the University of Chicago’s Booth School of Business. In his spare time, he enjoys playing squash, reading, and arguing.