PROOF THAT INTEGRATED TIRE RECYCLING DELIVERS THE HIGHEST RETURNS BOTH ENVIRONMENTALLY & FINANCIALLY 

Sustainable Development Goals

Organizations Involved:
Fountain Tire, FIRST, Tire Stewardship BC, Artech Shredders, Tire Remanufacturers, Tire Retreaders & Equipment Suppliers 
Services:
Design & Engineering, Due Diligence, Supply Chain Management, Carbon Management, Component Supply

The Challenge:

According to the Canadian Association of Tire Recycling Agencies ("CATRA"), "In 2018, a volume of 487,470 metric tonnes of scrap tires were recycled in Canada with 26,036 tonnes (5%) consumed as tire-derived fuel ("TDF") and the remainder recycled into various products or shredded for other purposes. Manufacturing and processing facilities are thriving in Canada because of the successful tire collection programs across the country. By contrast, in the U.S. around 272 million ELTs were generated in 2019 with 100 million of these tires (37%) consumed as TDF. Between 2015 and 2019, however, the number of ELTs used as TDF in the U.S. declined as the utilities, pulp, and paper mills moved more towards natural gas.

The major reasons for the obvious discrepancy in the percentage of ELTs used as fuel in the U.S. compared to Canada are the long-standing environmental concerns of Canada’s provincial governments and pressures for circular economy solutions for ELTs. In Manitoba and some other Canadian provinces where no TDF markets currently exist, the ELTs are mainly recycled in the province or a small amount exported to the U.S. or neighboring provinces to be used for TDF if provincial market conditions warrant.

By definition the circular economy does not include the destruction of finite resources yet why are scrap tires still being burned as fuel?

  • Is it because the current tire recycling systems do not fundamentally address the issue?
  • Is it because the current tire recycling systems have been producing the same kind of granulated rubber product for the past century and the marketplace is saturated with crumb rubber?
  • Is it because the current methods of tire disposal and infrastructure are old and outdated?
  • Is it because the tire manufacturers and supporting supply chain partners don't really care what happens to the end-of-life tires?
  • Is there a lack of transparency on how this disposal fee/tax is administered and who gets these subsidies
  • How are these subsides distributed and what company receives these subsidies?
  • Is there open disclosure on the financial performance data of these subsidies made available to the public?
  • Is there a reason why new technologies and solutions are prevented from access to a feedstock in the tire recycling marketplace?

In the case of scrap tire recycling in Canada, the "Stewardship System" is actually a subsidized tax system where the industry charges the consumers a disposal fee/tax when new tires are purchased and/or old tires are disposed of. This disposal fee/tax is actually a revenue driver for a select few with entrenched interests in both the tire retailers and the recycling industry. 

The Solution:

Klean's depth of experience combined with delivering hundreds of projects around the globe has always found that the best results are in solutions that replicate mother nature's intentions. The concept of waste becoming food for something else just like in a living ecosystem is finally starting to garner the attention it deserves as the circular economy and that mantra is now heard commonplace almost everywhere. The tire industry needs to radically change itself and it must now develop symbiosis between the products it makes and the waste it produces. The ultimate recycling solution is an integrated solution that includes:

  1. Tire remanufacturing / retreading
  2. Tire shredding
  3. Tire pyrolysis

Combining these proven technologies together tire recyclers can address the most cost-effective recycling value chains together. Typically, 75% of the resource costs go into the manufacturing of tire casings, the part that provides the structural integrity and durability for the tire and what holds the tire to the rim. With that in mind, reusing the tire casing should be the top priority as it is this part that has used the most resources and energy to produce. Keeping a tire as a tire for as long as possible is ultimately the best solution for the environment and for preventing excess CO2e emissions from the production of new tire casings. If a casing is not damaged it can be used many times, as many as 3 to 5 times its initial use, as the tread is easily reproduced onto a used casing. It's estimated that 25% of all scrap tires can be remade either through retreading or remanufacturing. 

The waste tires that are not suitable for the remanufacturing or retreading process should then be directed to the next process in the value chain and that is the recovery of the resources locked within the scrap tires. This requires a thermal process to extract the commodity value. Clearly, there is a demand for granulated rubber, however, saturated the market is, there are still viable low-value applications for tire shreds outside of burning waste tires as tire-derived fuel. Tire shredding is also a key step in preparing tires for a resource recovery solution such as tire pyrolysis. Tire shredding removes the tire steel and fiber components so that the pyrolysis process can easily recover high-value products from the rubber nuggets.

The pyrolysis process is a two-step process. The first process is the thermal breakdown of waste tires which takes place in an oxygen-free environment and the second step is the product upgrading which converts the pyrolysis products into a spec product for its end-use. The upgrading process produces a highly valuable recovered carbon (rCB) where approximately 60% of the value is attributed and recovered fuel oil (rFO) that has similar properties to VLSO 1% and accounts for approximately 40% of the value.  The rCB products from Klean's pyrolysis process go back into the rubber and tire manufacturing industry with some applications in plastic masterbatch production. The rFO products go back into industrial re-refining processes for use as a blendstock in road diesel applications and as a blending stock with carbon black oil for the production of new virgin-based carbon black. Because scrap tires have natural rubber included in the manufacturing of tires, when we thermally degrade waste tires using pyrolysis, we get a biobased content in our rFO making it 35-40% biomass-based, a highly desirable product that contains bio-oil. This integrated process also has the added benefits of offsetting significant carbon dioxide emissions. 

The economics of an integrated tire recycling solution speak for themselves as shown below based on 25% tire remanufacturing / retreading and 75% pyrolysis processing. A Klean Industries "Mobius" integrated tire recycling plant can generate over $100m in revenue per year from recycling 10m scrap tires annually.

Over 1.5 billion scrap tires are generated each year with billions in stockpiles!

A Break Down of Revenues for Processing 1,000,000 Scrap Tires

Proven Resource Reserves & Proven Profits

Tire Remanufacturing

20%

200,000 Tires

Per Tire

Revenue

Passenger Tire (PTE)

60%

120,000 Tires

$35.00

$4,200,000

Light Truck Tire (LTE) / Commercial

40%

80,000 Tires

$50.00

$4,000,000

Tire Pyrolysis

80%

800,000 Tires

$5.00

$4,000,000

The Mobius Business Model Total

$12,200,000

The Opportunity – “Closed Loop Solution”

Klean Industries successfully competes with all of its competitors for scrap tires, because the products produced by the Klean solution generate significantly higher revenue and profits than those produced by its competitors, enabling Klean Industries to charge less or even pay for feedstock. 

Canadian Tire Stewardship is an example of an “Out of Date” Legislation and Control Mechanism

  1. Current legislation and administrative control deny the existence or application of new proven recycling solutions;
  2. Administration of the recycling levy/tax has been delegated to an industry-based not-for-profit organization with clear conflicts of interest in maintaining the status quo;
  3. Existing sellers and handlers of tires products are not responsible for the environmental cost of disposal or reuse of tires and therefore have no economic incentive to ensure an effective environmental outcome.

Conclusions

  • Let's build on what we know makes sense using environmental, social, governance (ESG) and economic advantages;
  • Let's put an end to scrap tire-derived fuel and an end to the destruction of valuable resources.
  • Let's create real stewardship vs self-regulation & self-preservation;

Benefits Realized:

Klean's solutions can dispose of scrap tires at no cost to producers. The end result is the preservation of finite resources through the production of the following sustainable commodities (approximate volume):

  • Millions of waste tires can be remanufactured and retreaded per year (the highest form of recycling)
  • Meeting ESG requirements by incorporating highly valuable recovered carbon black for reuse in the manufacturing of new plastic and rubber products including tires
  • Production of a biogenic based oil from the scrap tires that is 35-40% renewable diesel from natural rubber biomass that can also be blended with carbon black oil (CBO) for the manufacturing of a new "green" virgin carbon black
  • Millions of tonnes of carbon emissions can be offset each year
  • Thousands of jobs are created in regions that require economic development
This project addresses the United Nations Sustainable Development Goals (SDGs) by considering the goals and associated targets illustrated by the WBCSD’s Tire Industry Project (TIP). TIP offers a framework for action that outlines impactful pathways for the tire sector to contribute to the ambitions of the SDGs. To learn more about how Klean's approach, solutions, and technologies contribute to advancing the SDGs please review the report called "Sustainability Driven: Accelerating Impact with the Tire Sector SDG Roadmap". See: https://www.wbcsd.org/Sector-Projects/Tire-Industry-Project/End-of-Life-Tires-ELTs