the scrap tire situation after 30 years: where is the industry today?

The Scrap Tire Situation After 30 Years: Where Is The Industry Today?MICHAEL BLUMENTHAL

MARSHAY, INC.

CLEMSON TIRE CONFERENCE APRIL 17, 2015

Very Early on…1957: USDA/Forestry Service issues booklet on erosion control showing whole tires placed as an anchor on sloped terrain

1966: Arizona DOT engineer uses tire rubber (buffings) to modify asphalt as a means to reduce thermal cracking

1979: Waste Recovery is the first company to collect, process and sell tire-derived fuel

There are no state or Federal regulations on scrap tires

Excepted management practices is to landfill or stockpile scrap tires

CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

1985 – 1990: the beginningMinnesota enacts first scrap tire legislation & regulation: Scrap tire industry is created (1985)

Oregon & Wisconsin enact legislation and regulations (1986)

The first 3 scrap tire companies: Waste Recovery (1979), Oxford Energy (1985) & Emanuel Tire

By 1990 48 states have legislation & regulations on scrap tires

TDF was the only market

1 kiln, 1 dedicated tire to energy facility & 2 pulp & paper mills were using TDF

Tire fires make headlines

Scrap tires considered largest/most significant solid waste problem in the country

Congress is looking to create a scrap tire program & have manufacturers pay for it


1990 – 1995: the formative yearsCongress enacts ISTEA, an unfunded mandate for rubber modified asphalt (1991)

The promise of states using rubber modified asphalt causes rapid expansion of ground rubber production capacity

Oxford opens a second dedicated tire to energy facility (1991)

Tire pile abatement is major focus of states programs

Tire derived aggregate is introduced into the marketplace (1992)

Whole tires are used as feedstock for ground rubber (1992)

Whole tires to cement kilns still most prevalent end use, but 2 inch TDF gains markets

Wide array of companies/technology competing for attention & funding


1990 – 1995: formative yearsISTEA mandate is repealed (1993)

State agencies are actively working on market development & abatement programs and are enforcing newly created regulations

Industry & state agencies actively work together

EPA is actively working on scrap tires issues: air quality report, listing of state programs

RMA creates Scrap Tire Management Council

Information on scrap tire issues becomes widely available

TDF remains dominant market

Other markets beginning to gain momentum


1996 – 2000: a transitional periodAnticipated demand for ground rubber is never realized: ground rubber production goes through a market correction: 80% of production capacity is lost (1996)

TDA suffers setback due to 2 fires in deep fill applications: FHWA places a moratorium on TDA

ASTM standards for TDA are created: moratorium is lifted (1996)

Industry on the brink of financial disaster due to economics of whole tires to kilns

Focus shifted to ground rubber markets

State agencies and EPA remain active

Markets show more diversification: TDF still largest market but has smaller market share

Several state tire programs end the fee portion & cease scrap tire related programs


2001 – 2006: good market conditionsPercentage of tires going to end use markets reaches 90%

New, higher-value end use markets begin expansion phase

State agency/industry cooperative programs continues

Most of the major stockpiles have been abated

Many state programs morph into “status quo” programs

State scrap tire regulators with experience begin to retire or are transferred to new jobs


2007 – 2011: hard times“Great Recession” occurs

New tire sales plummet: scrap tire generation decreases

40% loss in TDF market

33% loss in ground rubber market

Demand for used tires increases significantly

State agency staff & budgets are decreased; state programs are reduced, if not eliminated

Government/industry programs decrease due to budgetary limitation

Tire baling for export to Asia consumes 15% of scrap tires

Concerns raised about ground rubber’s impact on environmental/human health

Effort begins to create ASTM standards for rubber playground, rubber mulch & infill


2012 - PresentAsian market for bales closes: baling of tires reduced by 95% (2012)

TDF markets return but there is permanent loss of older cement kilns

Ground rubber markets come back, but still less than peak in 2007

Majority of state agencies lose experienced staff

Many states declare scrap tire problem solved and end or severely reduce efforts

EPA ends all cooperative programs and support for scrap tire activities (US/Mexico border)

Environmental concerns about ground rubber become more intense

Overall end use markets are around 90% of generation


1985 2015

2-3 billion tires in stockpiles 75 million tires in stockpiles

Tire fires Tire derived fuel

A tire crisis Yesterday’s news

Mandates Market demand

Congressional action on scrap tires Congressional action on tire recall

EPA involvement EPA no comment

Whole tires in cement kilns 1.5 inch minus TDF

Artificial reefs Artificial turf

Processing equipment not designed for tires 3rd generation processing systems

Rough shreds Ultra fine grind ground rubber

States developing scrap tire programs States downsizing scrap tire programs

States wanting scrap tire legislation States wanting EPR

5 TDF end users 85 TDF end users

Surface modification Playground surface cover

11% of all scrap tires going to markets 91% of all tires going to end use markets


1985 2015Tires in the gulch Tire mulchReclaim Reuse & RecyclingDearth of information Information overloadThe potential of tire pyrolysis The potential of tire pyrolysisBaker Rubber Liberty TireTire buffings Ground rubberDeep shredded tire fills Engineered tire derived aggregate60% of scrap tires being landfilled 10% of tires being landfilled500 scrap tire processors 50 scrap tire processorsMama/Papa companies Mega-companiesProfit derived from collection/end use Profit from selling used tiresTires in fields & streams Tire infillEnvironmental concerns about TDF Environmental concerns about ground rubberTDF was 100% of the market TDF is 50% of the marketLarge tire dumps Small tire dumps


Today’s Issues & Concerns: MarketsMarkets are a mixed bag

◦ South/Southeast demand greater than supply

◦ West Coast is doing reasonably well: landfilling still a factor

◦ New England desperately need new markets

◦ Midwest/Upper North Central losing TDF markets; no other markets coming in

◦ Several ground rubber markets are beginning to plateau

◦ Rubber modified asphalt has yet to achieve anticipated level of use

◦ TDF market looks like it is becoming to stagnate

◦ Vast majority of state agencies no longer involved in market development programs

◦ Environmental concerns will not go away


Issues & Concerns: Used TiresGreater focus today on collection/sale of used tires

Sale of used tire, in many cases, main source of income/profit for tire collection/processing companies

Demand for used tires is also prime reason for new surge of tire dumping: stealing from retailer or FBN companies cherry-picking and dumping the rest

States do not have resources to pick up tires, pushed responsibility to counties, which are have even fewer resources

Percentage of tires dumped is relatively small (3-5%): but remains concern for municipalities

This is a now a rationale by states when asking for EPR


Issues & Concerns: Scrap Tire IndustryScrap tire processors and product manufacturers forming their own trade association

This segment of the industry contends their needs/concerns not being addressed by RMA, ISRI or the STC

Fewer, but larger companies is the norm

Most companies still regionally based

Collection/processing infrastructure very well developed

Marketplace has selected winners & losers

Tire pyrolysis beginning to show signs that it could be economically viable


Issues & Concerns: State AgenciesMajority of state agencies no longer consider scrap tires an issue of concern

Most states content they have no stockpiles of tires

Many agencies have lost experienced staffers and have little/no budget for scrap tire programs

Lack of enforcement, especially on haulers a factor in dumping and creation of new stockpiles

Many states ill-prepared for any scrap tire problem

CT & VT have EPR legislation introduced: 50/50 chance 1 will get enacted

This would create challenge for the manufacturers

If this occurs, other states will consider EPR


Differences in… 1985-1990 2015

Level of State Involvement Actively creating market development, abatement & enforcement programs

Most states have ended theseprogram, reduced staff & budget

Level of Federal Involvement EPA creating information: Congress looking to make manufacturers financially responsible or create markets

No activity from either EPA or Congress

Level of Industry Involvement All industry groups actively involved

Industry groups taking passive approach

Infrastructure Poorly developed Highly developed


Differences in…1985-1990 2015

Markets 11% of tires to end use markets. 100% TDF but few & far between

Overall, 90+%, diversified as well but some regions are lacking sufficient demand

Tire Fires Commonplace in stockpiles and making headlines

Mostly at tire processor’s facilities

Stockpiled Tires Estimated at 2 -3 billion Less than 100 million

Challenges to the Industry Establishment of markets, concerns about TDF emissions

Stagnating markets, inability to involve states, environmental concerns about ground rubber


ConclusionsThe achievements of the tire/scrap tire industry in taking scrap tires from the most significant solid waste problem in the USA to where we are today is a major success story

Having scrap tires considered as a problem resolved is a double-edged sword: The industry is no longer being “banged” on by states or the Feds but when/where there are still unresolved issues (or recurring problems) there is little/no interest by the states to act

The combination of lost state agency involvement, plateauing markets, few new markets and continued environmental concerns on rubber products, if not addressed, could create the perfect storm for next scrap tire crisis

Given the gains made in 30 years, the industry has much to lose if scrap tires are again considered a problem waste


Contact InformationMichael Blumenthal

Marshay, Inc.◦ A Scrap Tire Consulting Company

[email protected]

845-642-3130

www.scraptireexpert.com


mailto:[email protected]

http://www.scraptireexpert.com/

the scrap tire situation after 30 years: where is the industry today?

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