Manufacturers have traditionally sold a separate below grade polystyrene insulation product. It was sometimes a different color and had ribs on one face to drain water away from the slab or foundation wall. It seems like an easy fix to remove the flame retardants from an already existing product. Secondly, under slab polystyrene insulation has other applications where fire retardancy is irrelevant. Structural engineers often use it for void forms in places like open-air parking garage ramps, where its only purpose is to support a slab until the concrete cures. Civil engineers sometimes use it to create a temporary pour joint between concrete slabs in road and bridge work - another application where fire retardancy is irrelevant.
Taking an unnecessary toxic chemical out of foam insulation seems like a no-brainer. I hope there are some insulation manufacturers willing to step up to the plate and oppose the fear-mongering by the chemical industry. The designers and specifiers of green buildings will welcome the opportunity to specify below grade foam insulation without flame retardants.
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