An overview of the Scrap Tire industry. Presented at the Clemson Tire Conference, April 17, 2015

1. The Scrap Tire Situation After
30 Years: Where Is The
Industry Today?
MICHAEL BLUMENTHAL
MARSHAY, INC.
CLEMSON TIRE CONFERENCE APRIL 17, 2015

2. Very Early on…
1957: USDA/Forestry Service issues booklet on erosion control showing whole
tires placed as an anchor on sloped terrain
1966: Arizona DOT engineer uses tire rubber (buffings) to modify asphalt as a
means to reduce thermal cracking
1979: Waste Recovery is the first company to collect, process and sell tire-
derived fuel
There are no state or Federal regulations on scrap tires
Excepted management practices is to landfill or stockpile scrap tires
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

3. 1985 – 1990: the beginning
Minnesota enacts first scrap tire legislation & regulation: Scrap tire industry is created (1985)
Oregon & Wisconsin enact legislation and regulations (1986)
The first 3 scrap tire companies: Waste Recovery (1979), Oxford Energy (1985) & Emanuel Tire
By 1990 48 states have legislation & regulations on scrap tires
TDF was the only market
1 kiln, 1 dedicated tire to energy facility & 2 pulp & paper mills were using TDF
Tire fires make headlines
Scrap tires considered largest/most significant solid waste problem in the country
Congress is looking to create a scrap tire program & have manufacturers pay for it
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

4. 1990 – 1995: the formative years
Congress enacts ISTEA, an unfunded mandate for rubber modified asphalt (1991)
The promise of states using rubber modified asphalt causes rapid expansion of ground rubber
production capacity
Oxford opens a second dedicated tire to energy facility (1991)
Tire pile abatement is major focus of states programs
Tire derived aggregate is introduced into the marketplace (1992)
Whole tires are used as feedstock for ground rubber (1992)
Whole tires to cement kilns still most prevalent end use, but 2 inch TDF gains markets
Wide array of companies/technology competing for attention & funding
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

5. 1990 – 1995: formative years
ISTEA mandate is repealed (1993)
State agencies are actively working on market development & abatement programs and are
enforcing newly created regulations
Industry & state agencies actively work together
EPA is actively working on scrap tires issues: air quality report, listing of state programs
RMA creates Scrap Tire Management Council
Information on scrap tire issues becomes widely available
TDF remains dominant market
Other markets beginning to gain momentum
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

6. 1996 – 2000: a transitional period
Anticipated demand for ground rubber is never realized: ground rubber production goes through
a market correction: 80% of production capacity is lost (1996)
TDA suffers setback due to 2 fires in deep fill applications: FHWA places a moratorium on TDA
ASTM standards for TDA are created: moratorium is lifted (1996)
Industry on the brink of financial disaster due to economics of whole tires to kilns
Focus shifted to ground rubber markets
State agencies and EPA remain active
Markets show more diversification: TDF still largest market but has smaller market share
Several state tire programs end the fee portion & cease scrap tire related programs
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

7. 2001 – 2006: good market conditions
Percentage of tires going to end use markets reaches 90%
New, higher-value end use markets begin expansion phase
State agency/industry cooperative programs continues
Most of the major stockpiles have been abated
Many state programs morph into “status quo” programs
State scrap tire regulators with experience begin to retire or are transferred to new jobs
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

8. 2007 – 2011: hard times
“Great Recession” occurs
New tire sales plummet: scrap tire generation decreases
40% loss in TDF market
33% loss in ground rubber market
Demand for used tires increases significantly
State agency staff & budgets are decreased; state programs are reduced, if not eliminated
Government/industry programs decrease due to budgetary limitation
Tire baling for export to Asia consumes 15% of scrap tires
Concerns raised about ground rubber’s impact on environmental/human health
Effort begins to create ASTM standards for rubber playground, rubber mulch & infill
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

9. 2012 - Present
Asian market for bales closes: baling of tires reduced by 95% (2012)
TDF markets return but there is permanent loss of older cement kilns
Ground rubber markets come back, but still less than peak in 2007
Majority of state agencies lose experienced staff
Many states declare scrap tire problem solved and end or severely reduce efforts
EPA ends all cooperative programs and support for scrap tire activities (US/Mexico border)
Environmental concerns about ground rubber become more intense
Overall end use markets are around 90% of generation
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

10. 1985 2015
2-3 billion tires in stockpiles 75 million tires in stockpiles
Tire fires Tire derived fuel
A tire crisis Yesterday’s news
Mandates Market demand
Congressional action on scrap tires Congressional action on tire recall
EPA involvement EPA no comment
Whole tires in cement kilns 1.5 inch minus TDF
Artificial reefs Artificial turf
Processing equipment not designed for tires 3rd generation processing systems
Rough shreds Ultra fine grind ground rubber
States developing scrap tire programs States downsizing scrap tire programs
States wanting scrap tire legislation States wanting EPR
5 TDF end users 85 TDF end users
Surface modification Playground surface cover
11% of all scrap tires going to markets 91% of all tires going to end use markets
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

11. 1985 2015
Tires in the gulch Tire mulch
Reclaim Reuse & Recycling
Dearth of information Information overload
The potential of tire pyrolysis The potential of tire pyrolysis
Baker Rubber Liberty Tire
Tire buffings Ground rubber
Deep shredded tire fills Engineered tire derived aggregate
60% of scrap tires being landfilled 10% of tires being landfilled
500 scrap tire processors 50 scrap tire processors
Mama/Papa companies Mega-companies
Profit derived from collection/end use Profit from selling used tires
Tires in fields & streams Tire infill
Environmental concerns about TDF Environmental concerns about ground rubber
TDF was 100% of the market TDF is 50% of the market
Large tire dumps Small tire dumps
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

12. Today’s Issues & Concerns: Markets
Markets are a mixed bag
◦ South/Southeast demand greater than supply
◦ West Coast is doing reasonably well: landfilling still a factor
◦ New England desperately need new markets
◦ Midwest/Upper North Central losing TDF markets; no other markets coming in
◦ Several ground rubber markets are beginning to plateau
◦ Rubber modified asphalt has yet to achieve anticipated level of use
◦ TDF market looks like it is becoming to stagnate
◦ Vast majority of state agencies no longer involved in market development programs
◦ Environmental concerns will not go away
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

13. Issues & Concerns: Used Tires
Greater focus today on collection/sale of used tires
Sale of used tire, in many cases, main source of income/profit for tire collection/processing
companies
Demand for used tires is also prime reason for new surge of tire dumping: stealing from retailer
or FBN companies cherry-picking and dumping the rest
States do not have resources to pick up tires, pushed responsibility to counties, which are have
even fewer resources
Percentage of tires dumped is relatively small (3-5%): but remains concern for municipalities
This is a now a rationale by states when asking for EPR
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

14. Issues & Concerns: Scrap Tire Industry
Scrap tire processors and product manufacturers forming their own trade association
This segment of the industry contends their needs/concerns not being addressed by RMA, ISRI
or the STC
Fewer, but larger companies is the norm
Most companies still regionally based
Collection/processing infrastructure very well developed
Marketplace has selected winners & losers
Tire pyrolysis beginning to show signs that it could be economically viable
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

15. Issues & Concerns: State Agencies
Majority of state agencies no longer consider scrap tires an issue of concern
Most states content they have no stockpiles of tires
Many agencies have lost experienced staffers and have little/no budget for scrap tire programs
Lack of enforcement, especially on haulers a factor in dumping and creation of new stockpiles
Many states ill-prepared for any scrap tire problem
CT & VT have EPR legislation introduced: 50/50 chance 1 will get enacted
This would create challenge for the manufacturers
If this occurs, other states will consider EPR
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

16. Differences in…
1985-1990 2015
Level of State Involvement Actively creating market
development, abatement &
enforcement programs
Most states have ended these
program, reduced staff & budget
Level of Federal Involvement EPA creating information:
Congress looking to make
manufacturers financially
responsible or create markets
No activity from either EPA or
Congress
Level of Industry Involvement All industry groups actively
involved
Industry groups taking passive
approach
Infrastructure Poorly developed Highly developed
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

17. Differences in…
1985-1990 2015
Markets 11% of tires to end use markets.
100% TDF but few & far between
Overall, 90+%, diversified as well
but some regions are lacking
sufficient demand
Tire Fires Commonplace in stockpiles and
making headlines
Mostly at tire processor’s facilities
Stockpiled Tires Estimated at 2 -3 billion Less than 100 million
Challenges to the Industry Establishment of markets,
concerns about TDF emissions
Stagnating markets, inability to
involve states, environmental
concerns about ground rubber
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

18. Conclusions
The achievements of the tire/scrap tire industry in taking scrap tires from the most significant
solid waste problem in the USA to where we are today is a major success story
Having scrap tires considered as a problem resolved is a double-edged sword: The industry is no
longer being “banged” on by states or the Feds but when/where there are still unresolved issues
(or recurring problems) there is little/no interest by the states to act
The combination of lost state agency involvement, plateauing markets, few new markets and
continued environmental concerns on rubber products, if not addressed, could create the
perfect storm for next scrap tire crisis
Given the gains made in 30 years, the industry has much to lose if scrap tires are again
considered a problem waste
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.

19. Contact Information
Michael Blumenthal
Marshay, Inc.
◦ A Scrap Tire Consulting Company
marshayinc@gmail.com
845-642-3130
www.scraptireexpert.com
CLEMSON TIRE CONFERENCE 2015, MARSHAY, INC.