Scrap tire recycling, after surviving for years on state grants and tipping fees, is finally becoming a profitable business.
``2006 was the best year for the tire recycling industry,'' said David Forrester, founder and CEO of TIRES Inc., a major whole tire and crumb rubber supplier based in North Carolina. He was one of the speakers at the recent 23rd Annual Clemson Tire Industry Conference at Hilton Head.
As late as 2005, the most profitable operations in the tire recycling industry were tire monofills because their tipping fees were a more guaranteed source of income against costs than any other tire recycling business could boast, according to Mr. Forrester.
Thanks to rapidly increasing demand for tire-derived fuel (TDF) caused by escalating prices for oil and coal, profits for virtually every recycling area are soaring, he said. Successful TDF processors now clear anywhere from $6 to $56 per ton of material they handle, Mr. Forrester added, while crumb rubber-fueled by the growth of engineered, fine-mesh rubber powders and other higher-value applications-can yield $20 to $80 a ton.
TDF and crumb rubber will continue their strong growth, he said, though 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.''
Rubber mulch also is a strong market that is putting major competitive pressure on TDF because mulch has more than twice the market value of TDF, according to Mr. Forrester. Lower-value civil engineering applications, however, are fading as TDF and mulch draw away much of the rubber chip market, he said.
``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 Stores Inc. and other worldwide chains, he added, though suppliers have to meet their standards.
The biggest surprise, however, is in pyrolysis, the process that breaks down scrap tires chemically under relatively low heat into their component oil, carbon black and steel.
Many entrepreneurs have tried to make pyrolysis commercial, and all have failed, Mr. Forrester noted. In the last year, however, he has visited two pilot pyrolysis operations that 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 asked. ``Once it does, it's easy for everyone to jump on board.''
Scrap tire utilization has grown enormously, to 87 percent of all scrap tires generated in the U.S in 2005 from 11 percent in 1990, according to the most recent figures from the Rubber Manufacturers Association (RMA).
Nevertheless, trying to work with the states to develop sound scrap tire management laws is an ongoing challenge, according to Tracey 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,'' Ms. Norberg said.
The most difficult states to deal with are those in the Far West, such as Alaska and Wyoming, which have relatively small amounts of scrap tires and long distances between centers of population. These circumstances mitigate against the creation of a viable tire recycling industry, she 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 new tires from a dedicated scrap tire management fund to the general fund, Ms. Norberg noted.
``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 Ms. 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.''