(From the May 14, 2012, issue of Rubber & Plastics News)
HILTON HEAD, S.C.—Though not the only solution to local or national scrap tire problems, Extended Producer Responsibility has worked well in Canada and Europe, according to a speaker at the 28th annual Clemson University Tire Industry Conference.
“EPR is not something to be feared,” said Glenn Maidment, president of the Rubber Association of Canada, at the Clemson meeting, held at Hilton Head Island, April 18-20. “The collective 'tire industry' can and does achieve high diversion rates with all manner of free market, tax-based or EPR systems.”
EPR, Maidment said, is a strategy to promote the integration of environmental costs associated with goods throughout their life cycles into the market prices of those goods.
“If manufacturers reflect the environmental costs into their products, then they will be encouraged to re-design their products to minimize the environmental costs,” he said. “This is called 'Design for Environment,' and it goes way beyond tires. Every product will have an EPR aspect—detergent packages are a good example.”
Different approaches, models
Every country has had a watershed moment in scrap tire management, and for Canada that moment was in February 1990, in Hagersville, Ontario, when a 14 million-tire stockpile burned for 17 days.
The tire fire made news worldwide, and it was a wake-up call to all Canadian provinces to create scrap tire management programs, Maidment said.
Canadian provinces have tried every available end-of-tire-life system in the ensuing 20-plus years, according to the RAC president.
All have their advantages, but in the end the path led inexorably to EPR, he said.
Several provinces tried the free-market approach, which mirrors the approach in many U.S. states, Maidment said.
In the free-market approach, the consumer pays the tire retailer a modest fee to dispose of waste tires. The retailer pays a hauler to remove the tires, and the hauler pays a tipping fee to a processor who turns the tires into a marketable product.
The benefits of the free-market approach are its low costs to consumers and market efficiency, Maidment said.
But its disadvantages are that it encourages illegal dumping and stockpiles, and discourages longer-term solutions with greater societal benefits.
“In the free market, tires will go to low-cost solutions,” he said. “California processors are having difficulty getting scrap tires because the tires are being shipped to China.”
Maidment said there is absolutely no reason in the U.S. or Canada to stockpile tires. “There are sufficient markets in both countries for scrap tires.”
The next step beyond the free-market approach is a tax-based system, which governments have approached in two ways, Maidment said.
The first method, used in many U.S. states, involves consumers paying a modest fee—$1 to $2 on the purchase of each new tire—to fund scrap tire abatement. The retailer remits this to the state government for that purpose, Maidment said.
In the second method, more common in Canadian provinces, the consumer pays the tire retailer an “Eco Fee,” which is remitted to the government department responsible for managing the province's end-of-tire-life program, he said.
The first method offers modest fees to consumers and provides money to clean up stockpiles, but governments often divert the collected funds from scrap tires to other purposes, Maidment said. The second option offers high compliance and diversion rates, but is more costly to administer and more prone to government complaints.
“We are seeing more and more governments saying, 'This is the tire industry's role. You produced it, you sold it, and you should take responsibility,' ” Maidment said.
The two remaining models are the agency model and EPR, according to Maidment.
In the agency model, the “Eco Fee” goes to a third-party agent—in Canada, a “non-Crown corporation,” such as Waste Diversion Ontario—which has the responsibility to manage ETL tires.
In EPR, the government issues a regulation requiring the tire industry to accept the responsibility for end-of-tire-life tires, Maidment said.
The industry then creates a not-for-profit organization to carry out that mandate, with tire industry professionals serving on the board of directors. Ontario Tire Stewardship is an excellent example of the EPR model, he said.
Canada and Europe
At this point, Canadian provinces utilize either the tax-based agency model or EPR approaches to scrap tires, though some provinces will switch soon to EPR from tax-based systems, according to Maidment.
In Europe, meanwhile, Germany and the United Kingdom still use free-market approaches to scrap tire management, he said. But most other countries have moved to EPR, with France the leading example.
The Canadian and European EPR models have significant differences, Maidment said. For example, the European EPR systems are national in scope, not provincial, and the tire industry actually owns the not-for-profit industries.
However, the systems have many common program elements, he said.
Both rely on eco fees collected on the sale of new tires; both require retailers to send those fees to the EPR Board, which uses all the money to pay haulers and processors; both have a significant public education and recycled products promotion function; both fund research and development, and stockpile abatement; and both track scrap tire collection from retailer to hauler to processor.
EPR systems tend to have very high diversion rates, Maidment said. For example, the Ontario Used Tire Program boasts an annual diversion rate of 96 percent.