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April 02, 2007 02:00 AM

Tire recycling finally finds its place in the sun

Miles Moore
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    Scrap tire recycling, after surviving for years on state grants and tipping fees, finally is becoming a profitable business, according to speakers at a tire conference.

    ``2006 was the best year for the tire recycling industry,'' said David Forrester, founder and CEO of TIRES Inc., a whole tire and crumb rubber supplier based in North Carolina. He spoke at the 23rd Annual Clemson Tire Industry Conference at Hilton Head March 14-16.

    As late as 2005, the most profitable operations in tire recycling were tire monofills because their tipping fees were a more guaranteed source of income against costs than any other tire recycling business could boast, Forrester said.

    But in 2006, thanks to rapidly increasing demand for tire-derived fuel caused by escalating prices for oil and coal, profits for virtually every recycling area soared, he said. Successful TDF processors now clear anywhere from $6 to $56 per ton of material they handle, Forrester said, while producers of crumb rubber-fueled by the growth of engineered, fine-mesh rubber powders and other higher-value applications-make $20 to $80 a ton.

    TDF and crumb rubber will continue their strong growth, according to Forrester, although an ongoing lawsuit could hamper the TDF market. ``Environmental groups are trying to get TDF classified as waste-to-energy incineration, which would make permitting and paperwork much more difficult,'' he said.

    Rubber mulch also is a strong market and putting major competitive pressure on TDF because mulch has more than twice the market value of TDF, Forrester said. Lower-value civil engineering applications, however, are fading as TDF and mulch draw away much of the rubber chip market.

    ``Five years ago, I said people wouldn't pay 15 times more for rubber mulch than for bark,'' he said. ``Well, they are, and it's still selling.''

    Rubber mulch is now being sold at Wal-Mart and other worldwide chains, he said, although suppliers have to meet their standards.

    The biggest surprise, however, is in pyrolysis, the process under which scrap tires are broken down under relatively low heat into their component oil, carbon black and steel.

    Many entrepreneurs have tried to make pyrolysis commercial, and all failed, Forrester said. In the last year, however, he visited two pilot pyrolysis operations he believes could become viable companies within the next several years.

    ``The question is, can the (pyrolysis) process make a product that's salable?'' he said. ``Once it does, it's easy for everyone to jump on board.''

    Used tires finding afterlife

    Scrap tire utilization has grown enormously, from 11 percent of all scrap tires generated in the U.S. in 1990 to 87 percent in 2005, according to the most recent figures from the Rubber Manufacturers Association.

    Nevertheless, trying to work with the states to develop sound scrap tire management laws is an ongoing challenge, according to Tracey J. Norberg, vice president for environment and resource recovery and deputy general counsel at the RMA.

    ``We continue to work with states that don't have appropriate scrap tire programs to promote end-use,'' she said.

    The most difficult states to deal with are those in the far west, such as Alaska and Wyoming, with relatively small amounts of scrap tires and long distances between centers of population. These circumstances militate against the creation of a viable tire recycling industry, Norberg said.

    Many states do have effective scrap tire programs-the RMA singled out South Carolina, Maine, North Carolina, Florida and Mississippi as the best in the nation in 2005, and Texas, Alabama, Ohio, Michigan, Massachusetts and New Jersey as the most improved. But too many divert the fees they place on the sale of the new tires from a dedicated scrap tire management fund to the general fund, Norberg said.

    ``If you're going to tax our product, put the money toward tires,'' she said.

    State legislators and agencies also can be resistant to industry advice on environmental affairs, according to Norberg. ``It's an interesting position to tell state officials, `You're not doing the appropriate thing environmentally,''' she said. ``We're supposed to be the big, bad polluter, and state officials don't expect us to come to them.''

    Scrap tires in foreign lands

    As the U.S. finds uses for more and more of its scrap tires, some U.S. entrepreneurs are turning to developing nations as a source of material, according to Anne S. Evans, president and CEO of EER Ltd., an international waste tire management company specializing in U.S. military and government contracts.

    ``I remember when the U.S. was an emerging recycling market, where people weren't sure what to do with tires,'' Evans said. ``Now the challenge is the rest of the world.''

    The world generates about 1.5 billion waste tires annually, 40 percent of them in emerging markets such as China, India, South America, Southeast Asia, South Africa and Eastern Europe, according to Evans.

    Traditionally, scrap tires in emerging countries were recycled in all sorts of ways, particularly for heat, cooking and to make sandals, Evans said. But as the tire markets in those countries become increasingly radial, those simple, old-fashioned recycling methods are dying out.

    ``In India, all new vehicles have radial tires, so now there are piles of radial tires there,'' she said. ``In China, there are huge numbers of truck tires looking for recycling.''

    Before would-be international recyclers leap into the breach, however, it would pay them to know something about the countries they're entering, said Evans.

    For example, the European Union bans the landfilling of tires, and this is creating problems in Eastern European countries that want to join the EU but need to get rid of their millions of landfilled tires first. ``Poland was once a landfill dumping ground for Germany,'' Evans said.

    Brazil has a law stating that tire makers are responsible for scrap tire recycling, and neighboring nations such as Argentina are considering similar standards, according to Evans. And in countries such as South Africa, where coal is plentiful and cheap, tire-derived fuel just isn't economic, she said.

    In developing countries, tire recycling just isn't the most pressing need, she said-food, water and health care come first. ``It costs about $1.5 million to set up a new tire recycling facility in India, which is also what it costs to build a 141-bed hospital there.''

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