MARCH/APRIL 2007
In just 15 years, the U.S. tire recycling industry has gone from a billion-tire backlog to the development of innovative recycling and reuse markets. The tire recovery rate has now grown beyond that of most other commodities, and it shows no sign of slowing.
BY KENT KISER
"Useless waste relegated to unsightly stockpiles.”
That was the state of scrap tires in 1990, according to the Rubber Manufacturers Association. In Scrap Tire Markets in the United States: 2005, the association looks at the amazing progress of U.S. scrap tire recycling in the 15 years since it began tracking the market. In that short time, scrap tires have been transformed from a bane to a boon, with the recycling and reuse markets growing more than 900 percent.
To fully appreciate the evolution of the tire recycling industry, you have to look back at how it started. In 1990, scrap tires were a serious problem in the United States. More than a billion discarded tires sat in stockpiles, and the country was generating 223 million additional scrap tires annually—one for every man, woman, and child in the nation. Of those, only about 25 million—or 11 percent—were recovered or reused.
Fast forward to 2005, the most recent year of RMA statistics. Only 188 million scrap tires remained in stockpiles—81 percent less than in 1990. Scrap tire generation increased 34 percent, to 299 million, but an astonishing 259 million of those tires, or 87 percent, were reused or recycled—an
increase of 958 percent from 1990.
That rate puts scrap tires in the upper echelon of recyclable commodities. The scrap tire recovery rate is now better, in fact, than aluminum cans (52 percent), steel cans (63 percent), paper (51.5 percent), and both glass and PET plastic containers (25 percent and 23 percent, respectively). Only lead-acid batteries and some steel scrap products—such as cars—have higher recycling rates than scrap tires, and those markets have existed much longer.
In 15 years, scrap tires have risen from the bottom of the recycling hierarchy to the top of the heap. And according to RMA’s report, the scrap tire market still hasn’t reached its full potential.
Birth of a Market
Scrap tire recycling didn’t just grow on its own, of course. It took strong markets to bring about this sea change.
Decades ago, a limited number of scrap tires were reused as punched and stamped products, dock bumpers, swings, and in assorted farm applications. The 1970s brought the first use of tire-derived fuel, which became the predominant market for scrap tires through the early 1990s. In RMA’s first scrap tire market report, in 1990, TDF constituted nearly 100 percent of scrap tire reuse.
The 1990s brought a renaissance in scrap tire markets, giving the industry much-needed diversification and allowing it to mature. Today, TDF continues to dominate the market, with a 60-percent share of all reuse and recovery. But other, varied markets that have emerged in the past 15 years make scrap tires much more than just an industrial fuel. The RMA’s report looks at the past, present, and future of the major U.S. markets for scrap tires.
Fueling an Industry
In 2005, TDF applications consumed about 155 million scrap tires. Cement kilns, pulp and paper mills, and industrial and utility boilers use them as a fuel that’s a “cleaner and more economical alternative to coal,” RMA says.
The number of tires consumed as TDF has increased 533 percent since 1990, when 25 million tires went into this application. The two years from 2003 to 2005 saw a dramatic 20-percent increase in the market, thanks to greater demand for alternative fuels due to higher energy prices, continued improvement in the quality and consistency of TDF, and more reliable delivery of a consistent TDF product, RMA explains.
Overall, 117 U.S. facilities had permits to consume TDF in 2005, including 47 cement facilities, 24 pulp and paper mill boilers, 17 electric utility boilers, 16 industrial boilers, one dedicated tire-to-energy facility, and six resource recovery facilities, RMA notes. Cement kilns are the stars in this niche, consuming 58 million scrap tires in 2005, or 37 percent of the total TDF market. Pulp and paper mill boilers are the second-largest TDF consumers, using 39 million tires (25 percent of the TDF market), followed by utility boilers, 27 million tires (17 percent); industrial boilers, 21 million tires (14 percent); and the single tire-to-energy facility, which used 10 million tires (about 6 percent), according to RMA figures.
One notable change in the TDF niche is that some consumers now prefer smaller-sized rubber chips measuring 2 inches square or less, down from 2 by 3 inches. One advantage of smaller chips is that they contain less steel than larger chips, which makes the material easier for the consumer to handle and reduces the amount of residual ash needing disposal, RMA notes.
Looking ahead, the RMA predicts the TDF market could face “significant challenges” if certain legal threats go against it. One case is questioning whether scrap tires burned as TDF for energy recovery should remain regulated under Section 112 of the Clean Air Act or whether they are solid wastes being incinerated, which would subject them to tighter regulation under Section 129 of the act.
Another challenge relates to TDF used in biomass combustion facilities. Under Section 45 of the IRS Code, such facilities can claim tax credit for electricity produced from qualified energy resources. Since TDF is apparently a nonqualified energy resource, biomass combustion facilities that consume it could be prohibited from claiming the tax credit or could only receive a tax credit for the percentage of the thermal content derived from biomass, RMA says.
Other detracting factors in this market include the possibility that U.S. cement kilns—the largest users of TDF—could reach their maximum capacity for consuming TDF in several years, which would “clearly have an impact on the marketplace,” RMA says.
On the plus side, several large-scale users of TDF have made considerable upgrades to their TDF systems, which suggests an ongoing commitment to this alternative fuel regardless of changes in energy costs. Though each consuming sector has its own prospects and limitations, the overall outlook for the TDF market is “optimistic,” RMA says, projecting a 10 percent to 20 percent increase over current usage levels in the next two years.
Becoming Civil-ized
Civil engineering applications are the second-largest market for scrap tires in the United States, consuming 49 million—or 19 percent—of all tires recycled in 2005, RMA reports. In this market, “tire-derived aggregate” is used as a lightweight fill, a drainage layer in landfills, and an aggregate for septic tank leach fields. Notably, 75 percent of civil engineering markets for scrap rubber are concentrated in eight states—Iowa, Maine, Minnesota, North Carolina, Ohio, South Carolina, Texas,
and Virginia.
After years of strong growth, this market declined in the 2003 to 2005 period for the first time, slipping 13 percent—from 56 million tires to 49 million tires, and from 24 percent to
19 percent of the scrap tire recovery market.
Why the decline in this historically strong and growing market? One reason is that the TDF market drained a “significant amount” of scrap tire supplies from the civil engineering market, RMA says. When tire processors can make more money selling TDF than TDA, more material goes into that market. Also, TDA has been hurt by reports that it has caused clogging in some landfill leachate liners. The material also lacks wide acceptance in many states, due to either difficult permitting conditions or regulatory definitions that make it hard—if not impossible—to use TDA, RMA explains.
Despite this market’s setback in recent years, the fact remains that TDA provides engineering and cost benefits when compared with other aggregate materials. Though RMA does not see a “dramatic resurgence” of TDA usage in the next two years, it nonetheless projects growth ranging from 10 percent to 20 percent, equivalent to the consumption of 5 million to 10 million additional tires, which could bring the TDA market back to its 2003 level.
Grinding Out Success
The road for ground rubber has been rough. Its prospects started out bright enough in 1991, when the federal government passed the Intermodal Surface Transportation Efficiency Act. One provision of that law mandated the use of ground tire rubber in a certain percentage of federally funded highway projects. The 1993 repeal of this unpopular mandate had an “immediate, permanent, and devastating” impact on ground rubber producers, RMA says, driving many out of business.
Fortunately, the ground rubber market has since bounced back. In 2005, ground rubber applications were the third largest market for U.S. scrap rubber, consuming about 38 million tires, or 14 percent of the total scrap tires recovered or recycled, RMA reports. This market showed the greatest growth of the major scrap tire niches in the 2003 to 2005 period, rising 33 percent.
A variety of applications use ground rubber, including new rubber products, rubber-modified asphalt, and playground and other sports surfacing. Of these, sports surfacing gave ground rubber the greatest boost from 2003 to 2005, growing 67 percent, RMA notes. Other strong markets
included horticultural applications, such as rubber mulch, and cover for equestrian arenas.
In this niche, the market growth of playground surfacing, running tracks, soil amendments, and some bound rubber products reflects a shift in market share toward larger-sized ground rubber—so-called “coarse” material measuring 4 mesh or larger. Smaller-sized ground rubber—measuring 10 mesh or less—saw some of its markets, especially asphalt rubber, decline since 2003.
The short-term outlook for the sports surfacing and horticultural markets is “very good,” RMA says. The use of ground rubber as a cushioning and drainage material in artificial turf is and will continue to be its major market niche. In fact, RMA projects that the turf market could double in the 2006 to 2007 period and maintain that level through 2008.
After sports surfacing, the market for molded and extruded rubber products—such as mats, blocks, and sheets of rubber—has the greatest potential to expand, RMA predicts. To reach its potential, however, this sector must improve its methods for mixing recycled rubber and plastic polymers. Also, manufacturers of molded and extruded products face stiff foreign competition, which could cause these outlets to “disappear from the ground rubber market,” RMA says.
As for rubber-modified asphalt, there is increasing interest in its benefits, but its overall outlook is “not particularly positive,” RMA concludes. The market is dependent on approvals from state highway departments, which are gained through a bureaucratic and political process that can take forever—or never happen. Some factors could help its cause, including product tests by some Canadian provinces, the Quiet Roads initiative of the Federal Highway Administration, and the newfound ability to blend rubber-modified asphalt at the manufacturing terminal rather than on the job site.
Despite strong growth in specific sectors, the ground rubber market faces “modest” growth prospects in the next two years, RMA says. The “cycle [of] demand and sustainability” in these markets suggests that the current strong demand for the product in sports surfacing and horticulture is “unlikely to be sustained” for more than three years. As a result, RMA advises ground rubber producers to seek and develop “the next target market.”
The Best of the Rest
In addition to the three major markets—TDF, civil engineering, and ground rubber—U.S. scrap tires are consumed in several smaller applications, the largest being punched/stamped products. In 2005, about 6 million tires were cut, punched, or stamped in the United States, reflecting a slight decline since 2003, according to RMA’s report. This market uses only midsized bias-ply tires or fabric-bodied radial tires from trucks, which has become a limitation as more of these tires incorporate steel belts and body plies. Larger bias-ply tires could fill some of this shrinking material supply, which could put these formerly discarded tires to beneficial use, according to RMA.
Electric-arc furnaces are another small but expanding market for whole scrap tires. Furnaces that produce high-carbon steel products use tires as a source of carbon, steel, and energy. In 2005, EAFs consumed 1.3 million tires, up about 160 percent from the 500,000 tires this market used in 2003, RMA reports. Currently, about four U.S. EAFs use scrap tires, with up to eight additional EAFs reportedly interested in the material.
Several factors could limit growth in this niche, however, including the limited availability of tires due to demand in other, more lucrative markets. Also, EAFs have traditionally received a tipping fee to accept scrap tires, but those fees have either disappeared or gone down, RMA says. Further, some steelmakers are concerned that consuming scrap tires could affect the quality of their end products. “The economics of negatively impacting the quality of steel products far outweighs any benefit from using scrap tires for any purpose,” the RMA report states. Despite those concerns, this market could reach about 3 million scrap tires in the 2006 to 2007 period, with each EAF consuming 200,000 to 500,000 scrap tires a year. In general, however, this is “likely to be a minor end-use market,” the group says.
Agricultural uses and exports are the final two outlets tracked by the RMA for U.S. scrap tires. In the agricultural niche, scrap tires are used on low-speed farm equipment, as weights to hold down covers on haystacks and other items, as livestock feeding stations, as barriers to protect fence posts from damage by farm animals, and as erosion control devices, among other things. This niche consumed 3 million scrap tires in 2005, the same as in 2003, RMA notes.
The export market involves the shipment of “sound used tires,” RMA says. The association reports U.S. exports of almost 7 million tires in 2005, but it notes there’s a “significant likelihood” that that figure does not capture the full extent of the export market, which is expected to continue.
Eliminating Stockpiles
In 1990, more than a billion scrap tires lay in stockpiles—many of them illegal—around the United States, posing serious fire threats and providing shelter and breeding grounds for mosquitoes and vermin. Working down those mountains of discarded tires seemed like an impossible task. But 15 years of hard work by processors, states, and other stakeholders has resulted in remarkable progress.
As of 2005, U.S. stockpiles totaled 188 million tires—81 percent less than the 1990 count and 32 percent less than the 2003 stockpile total of 275 million tires, RMA reports. The group attributes this success to “a significant amount of abatement activity” in states and the prevention of new stockpiles. “The combination of increased market demand, improved collection practices, better law enforcement, and a greater public awareness of the dangers associated with unlawful dumping have resulted in a significant improvement in this important arena,” RMA says.
Though the United States is winning the stockpile abatement battle, the war is far from over. A few states still have substantial stockpiles they must address. At the end of 2005, seven states accounted for 84 percent of the 188 million remaining stockpiled tires: Colorado (40 million), New York (37 million), Texas (about 25 million), Connecticut (20 million), Alabama (18 million), Michigan (almost 11 million), and Pennsylvania (nearly 8 million), RMA says. These states, as well as New Jersey, need “aggressive” abatement programs if this country is to continue winnowing its tire stockpiles, RMA says. Unfortunately, several of these states don’t dedicate some of their scrap tire program funds to stockpile abatement—and others don’t have funded scrap tire programs at all.
Another challenge is that the remaining stockpiled tires are, in many cases, located in smaller clusters and less
accessible areas. It will take more time, effort, and money to abate these piles, RMA notes.
Given the above considerations, the rate of stockpile reduction will slow in the coming years, and “it is highly probable that more than half of the currently reported stockpiled scrap tires will remain unabated for the foreseeable future,” the association says.
Rolling Onward
The scrap tire recycling industry has ample reason to celebrate its phenomenal success since 1990, but it must not become complacent, or it risks losing some of its hard-won progress, RMA says. “The scrap tire industry and regulatory agencies collectively must maintain focus on this important issue,” the group states.
As is the case with all recyclables, “the market is king” for scrap tires, meaning that recyclers need to solidify and expand existing outlets even as they develop new ones. “Only with healthy, stable, and sustainable markets will the scrap tire management industry continue to thrive,” RMA says.
Though U.S. scrap tires still face challenges, the long-term future of this market is promising. RMA maintains that scrap tire stockpiles “can and should be completely eliminated in this country.” It envisions a day when every newly generated scrap tire is put to productive reuse or recycling. The industry’s momentum toward that goal is encouraging, but its achievement is far from a given. The industry’s long-term success, RMA concludes, “will be a function of continued market infrastructure advances and vigilant state oversight, leadership, and enforcement.”
Kent Kiser is publisher and editor-in-chief of Scrap .
Publisher’s Note: For a complete copy of RMA’s 86-page Scrap Tire Markets in the United States: 2005, visit www.rma.org and click on “Scrap Tires.”
In just 15 years, the U.S. tire recycling industry has gone from a billion-tire backlog to the development of innovative recycling and reuse markets. The tire recovery rate has now grown beyond that of most other commodities, and it shows no sign of slowing.