Market Barriers to Waste Tire Utilization

INTRODUCTION

The previous chapter has discussed the current status of utilization of tires. This chapter will discuss market barriers to their utilization.

There are substantial barriers to the utilization of waste tires. These barriers can be classified into two main types - economic and noneconomic.

Economic barriers refer to the high costs or limited revenues associated with various waste tire utilization methods which make them unprofitable. No tire processor will invest time or capital unless there is a sufficient rate of return to justify the efforts.

Noneconomic barriers refer to a number of constraints on utilization. These include technical concerns such as lack of technical information or concerns regarding the quality of products or processes. These barriers also include the reluctance of consumers, processors, and regulators to employ new approaches or technologies for aesthetic or other reasons. They also include constraints on utilization because of health, safety, environmental issues, laws, and regulations.

The strength and persistence of these barriers is evident from the continuing buildup of tire stockpiles and dumps over the last several years.

Table 13 summarizes the economic and non-economic barriers that were identified for each of the tire utilization options examined in this study. An economic factor that affects all the technologies, is the low tipping fees for all solid waste, including tires at landfills. Although landfills often charge more for tires than for other solid waste, disposal costs are generally much lower than the costs for alternate means of managing scrap tires such as recycling and incineration for energy recovery.

This chapter places special emphasis on the barriers affecting the two categories of waste tire utilization that have been identified as having the greatest potential for using a considerable portion of scrap tires generated: rubberized asphalt and combustion. Both of these uses have the potential for being used in many areas of the country and to consume large numbers of scrap tires if the economic and non-economic barriers can be removed.

Table 13 SUMMARY OF BARRIERS TO SOLVING SCRAP TIRE PROBLEM

Technology

SOURCE REDUCTION

Design for longer life tires

Reuse of used tires

Retreading

Economic Barriers

- Higher cost for tires

- Higher fuel consumption

Noneconomic Barriers

- Rougher riding tires

- More tire noise

- High cost of matching, - Safety concerns sorting, and distribution

- High cost of recapping

- Competition from new tire prices (passenger) (Most good truck carcasses are retreaded now)

- Consumer preference for new tires

- Consumer attitudes about safety and reliability

RECYCLING

Rubber additives for pavements

■ Initial costs are about double cost of alternate materials

■ Insufficient life-cycle cost data available

- Capital cost for equipment modification

- Long-term testing is incomplete

- Conflicting test results

- States are waiting on other states' results

- Lack of information transfer among states

- No national specifications for rubberized asphalt

- Patents can limit competition

Table 13 (continued)

Processed rubber products

Reclaim Mats Split tire products Railroad crossings

Playground gravel substitute

Bulking agent for composting

High capital requirement for reclaim plants Price competition from alternate railroad crossing materials

Up to 10 times more expensive than alternate materials (gravel, stone, wood chips)

High cost compared to the alternative (wood chips)

Reefs and breakwaters

- High construction cost

Playground equipment

High cost compared to other materials

Lack of market acceptance for products requiring structural integrity, particularly new tires

Does not use whole tire (disposal still required)

Split tire products limited to wire-free tires

Product not as familiar to buyers as traditional playground gravel

Concerns about lead and zinc from tires Lose dilution effect of heavy metals (zinc and cadmium) that is obtained with wood chips

Not appropriate for all shores (e.g., northwest coast is too rough)

Some schools and parks prefer wooden equipment for aesthetic reasons

Table 13 (continued) Erosion control

- High cost

Highway crash barriers

- High cost

COMBUSTION Power plants

Combustion at tire plants

Cement kilns

■ Low utility buy-back rate for electricity in many regions of U.S.

■ Capital and operating costs

■ High cost of air pollution control

■ Capital costs for handling and feeding

• Low cost of alternate fuels (particularly in areas where petroleum coke is available)

■ Expense and downtime in environmental permitting process

Highway departments prefer sand-filled crash barriers

More difficult to erect and dismantle than sand-filled

Siting problems

Concerns about the opacity of stack emissions

Delays in environmental permitting procedures

Table 13 (continued)

Pulp and paper mills - High cost of wirefree tdf

- Handling costs

- Low cost of alternate fuels

PYROLYSIS

- Capital and operating costs

- High cost for upgrading char by-products

- Wire in tdf can plug some hog-fuel feed systems and limit ash markets

- Particulate emissions higher than for hog-fuel alone

- Use of new fuel often requires reopening of environmental permits

- Upgrading char needs to be commercially demonstrated on a sustained basis

Source:

Franklin Associates, Ltd. and Dr. Robert L. Hershey

Both technologies are commonly used in Europe, but rubberized asphalt usage in most of the United States is still in the testing stage.

In analyzing the economics of tire utilization, it is helpful to consider each situation where cost data are available in terms of the profit per tire. Entrepreneurs will launch a tire processing facility only if the potential profit per tire is high enough. The profit per tire may be computed from the equation shown below:

where

P is the profit per tire

F is the tipping fee collected per tire

R is the revenue received per processed tire

C is the processing cost per tire for operating the facility

T is the transportation cost to bring in tires

D is the disposal cost for waste products

In the sections of this chapter where data are available, the various options for processing tires into fuel are analyzed in terms of this tire profit equation.

Clearly, to motivate entrepreneurs, there must be a positive profit per tire for any feasible utilization method. If the equation yields a negative value (a loss) then the private sector will not use such a utilization method, and the tires will stay where they are. Not only must there be a profit, but it must be high enough to give a good return on the invested capital to build a plant or buy equipment. A rough method of analyzing the return is to calculate the simple payback period using the equation shown below.

Payback Period = Capital Invested Annual Profit

The equation tells how many years it will take before the capital invested in the plant and equipment will be paid back. Generally, most investors will demand a payback period of three years or less before they will risk their money. In the electric power industry, which tends to have stable revenues, a payback period of seven years may be acceptable. Obviously, any venture which requires a high capital investment and yields a very low profit will have a long payback period, and the venture probably will not be financed.

In the sections which follow, the economic barriers for various waste tire utilization methods will be discussed. For those methods which seem economically feasible, the noneconomic barriers will also be examined.

RUBBER ASPHALT PAVING SYSTEMS

Rubber for pavement use is currently experiencing a rapid growth. The Asphalt Rubber Producers Group (ARPG) claimed a 67 percent growth in 1989 over 1988, and experienced further growth in 1990. Many states have tested asphalt-rubber for roads, with about a half dozen leading the way. The PlusRide™ rubber modified asphalt concrete is not being used routinely at this time. However, because of the positive results to date, several cities and counties are having streets and roads built of this material. The TAK system, a non-proprietary type of RUMAC, is also undergoing testing.

Economic Barriers

The economic barrier to the use of rubber in pavements is the high initial cost to the highway departments. It is difficult to obtain good data on the capital investment necessary to convert an asphalt operation to add rubber. But the consensus from the ARPG and several other sources is that the installation of rubber asphalt pavements will cost about 2 times as much as standard asphalt. Although the test results for asphalt pavements containing rubber are not yet complete, in many cases a factor of 2 or more in pavement lifetime is achieved. Therefore, if transportation departments evaluate costs over the life of the roads, the overall costs may be the same or less for rubber asphalt. The ARPG claims that rubberized asphalt roads cost less on a life-cycle basis.

The entities responsible for highways and roads are usually the state and local governments. It is difficult for them to justify doubling the highway repair investment especially if they are not quite convinced yet what the expected road life is. In addition, governmental officials may be trying to meet goals of a certain number of road miles paved per year. It may be more difficult for them to make decreased life-cycle cost their main goal.

Some state government officials have expressed concern that, because the two most proven forms of rubberized asphalt are patented, prices for this material may be higher than they would be if the material were not patented. It is estimated that the royalty adds 35 percent to the cost of asphalt-rubber and 27 percent to Plus Ride™ The patent for asphalt-rubber expires in 1991. After that time ARPG expects more companies to become involved. The TAK process is not patented, but also has not been tested as long as the patented types of rubberized asphalt.

Noneconomic Barriers

One of the major noneconomic barriers to the use of rubber for paving in the past has been the lack of long-term test results. Some of the roads installed 15 to 20 years ago are still not worn out. Test controls are required because well designed asphalt roads may also sometimes last that long. Many of the test results are now available and more states are looking toward A-R and RUMAC. However, not many states, if any, are completely satisfied with either A-R or RUMAC to the extent that they are using either on a routine basis to build their new roads.

Some testing in Wisconsin indicated that asphalt-rubber roads may actually crack before asphalt roads. This temporarily halted activities in that state. However, after reevaluating their results and results from other states, Wisconsin has just installed 30 miles of asphalt-rubber roadway and is planning 3 new projects in 1990.

There is a need to summarize the results of asphalt-rubber and RUMAC research and establish guidelines that would help states use this process. Texas has already passed procurement guidelines.

Another potential barrier, the ability to recycle pavements containing rubber, needs to be tested. Given the similarity of the substance to conventional asphalt, however, it should be a matter of how, not whether, it can best be recycled.

Another barrier is the lack of national specifications for pavements containing rubber. Some states appear to be waiting for specifications to be written. The American Society for Testing and Materials (ASTM) has developed a standard specification (ASTM D-04.45) for asphalt-rubber to be voted on by its members in 1990-91.

When asphalt-rubber (wet process) is applied to pavements, the tires come from the neighborhood of the nearest shredding/grinding facility. Because A-R is a patented material, there are only a limited number of shredding companies that supply rubber for this process. Some state government officials have indicated concern about whether waste tires from their own state can be used, as opposed to those tires near the present shredders, which might be located in another state.

COMBUSTION

Since tires have a Btu value comparable to the best coal, they would be expected to be an economically attractive fuel in some situations. Recent U.S. experience has shown economic feasibility for tire-to-energy power plants and for tdf used in cement kilns and pulp and paper mills. The economic barriers facing these types of tire combustion will be discussed below. Despite these economic barriers, the use of tdf has increased over the last year, and this trend is expected to continue.

Economic Barriers

The economic barriers for combustion of tires relate primarily to the limits of the revenue received for electricity or tdf by the tire processor. The two cases-power plant and tdf-are analyzed in the sections which follow.

a) Power Plants. The key economic factor for a tires-to-energy power plant is the buy-back rate granted by the utility. This rate reflects the avoided cost, the cost per kilowatt-hour that the utility would incur if they built a plant themselves to generate additional power. Generally, avoided costs are highest in California and the northeast and lowest in the northwest. For Oxford Energy's Modesto power plant the rate is 8.3 cents per kilowatt-hour.

In analyzing the economics of the Modesto power plant, the tire profit equation can be used. The buy-back rate of 8.3 cents per kilowatt-hour means that each tire consumed will generate revenue of $1.84 from the sale of electricity to the utility. For tires coming from the on-site tire pile, F = 0, since there is no tipping fee and T = 0, because there is no transportation cost. We estimate that C = $0.50, the processing cost per tire for operations, maintenance, labor, and materials. The estimate of the net disposal cost per tire of fly ash, gypsum from the scrubber, and bottom ash (taking into account the sales of byproducts) is D = $0.08. Substituting these values into the tire profit equation yields the following results:

Thus the annual gross profit from the Modesto operation is $1.26 x 4.5 million tires = $5.7 million per year.

Dividing the gross profit into the $38 million capital cost of the plant yields the payback period.

Payback Period = $38 million = 6.7 years $5.7 million

The payback period estimated above shows that the venture is acceptable, since investors in similar power plants generally want payback periods of 7 years or less. (The estimates in this chapter have been neither confirmed nor denied by Oxford Energy. A formal return-on-investment analysis would be necessary to be really accurate. This would include the financing structure of the venture, interest rates, depreciation, and tax considerations.)

From the tire profit equation shown above, it is apparent that the Modesto plant would be more profitable if it burned tires that brought in a tipping fee, rather than using tires from the Filbin tire pile. Newly brought tires also have a slight operational advantage since they are cleaner. Because of environmental, health, and safety concerns, however, it is important that the size of the pile be decreased. This situation has led to a compromise; Oxford Energy uses some tires from the pile and some tires from the surrounding area, for which a collection fee has been charged.

The economic feasibility of Oxford Energy's planned Sterling, Connecticut power plant can also be analyzed in a similar manner. This plant will have an initial buy-back rate of 6.7 cents per kilowatt-hour when it starts operation in 1991. The Sterling plant will cost roughly $100 million. It is estimated that the plant will consume approximately 9.5 million tires per year and will generate 26.5 MW of electricity. This means that the revenue per tire is $1.64 from the sale of electricity. Processing and disposal costs would appear to be similar to Modesto, so we would again estimate them to be C = $0.50 and D = $0.08. If the average tipping fee is $0.60 per tire and the average transportation cost is $0.05 per tire, the tire profit equation yields the following:

P = $0.60 + $1.64 - $0.50 - $0.05 - $0.08 = $1.61 per tire

Thus, processing 9.5 million tires per year would bring in a gross profit of $1.61 x 9.5 million = $15.3 million.

The payback period for the Exeter Energy Project at Sterling, Connecticut is

Payback Period = $100 million = 6.5 years $15.3 million

Once again there is a payback period less than seven years for a tires-to-energy project, the kind of payback expected by utility investors.

Note that the financial feasibility depends on having a sufficient utility buy-back rate. For instance, if the buy-back rate had been $0.04 instead of $0,064 per kilowatt-hour, then the revenue per tire would have been only $0.98. This would yield a profit of only $0.95 per tire. Under this lower buy-back rate the annual gross profit would be only $9 million, and the payback period would be over 11 years. With such a long payback period the plant would have difficulty attracting investors. Therefore, the utility buy-back rate is the critical economic barrier in determining whether a plant is financially feasible.

b) Tire-Derived Fuel. In analyzing the economic feasibility of a tire-derived fuel venture, the main economic barrier is the price of the competing fuel. For instance, the cement plants in Texas and Louisiana are often able to obtain petroleum coke locally, a waste product from the petroleum refining process. Petroleum coke is a cheaper fuel than tires; therefore, tdf cannot capture this local market. Similarly, tdf must often compete with coal as the fuel for cement plants. If tdf is only slightly cheaper, it is hard to justify any capital costs for new equipment that might be necessary to burn tdf. Obviously tdf becomes more attractive if energy prices rise.

The tire profit equation can be used to analyze the profit situation for an entrepreneur considering building a $1 million facility to shred 1 million tires per year and produce tdf. If he can sell the tdf for $20 per ton, then by the rule of thumb of 100 tires per ton R = $0.20. Assume that he operates in an area where tire disposal is difficult and he can collect a tipping fee of $0.70 per tire. For maintaining a steady flow of tires he may occasionally have to truck them in, with an average transportation cost of T = $0.05. For the projected shredding operation the processing cost is C = $0.40. If the entrepreneur is selling tdf to cement kilns, he can leave the wire in the tdf from the steel belts and beads and D = 0. Substituting these values in the tire profit equation yields:

With a profit per tire of $0.45, his gross annual profit is $0.45 x 1 million tires = $450,000. Then the payback period on the $1 million facility is

This payback period is fairly attractive for a commercial facility, since it is less than three years. However, it is dependent on a relatively high tipping fee and a continuing demand for tdf at $20 per ton. If either of these decreased significantly, the venture would not be financially feasible.

The tire profit equation can also be used to look at the economic feasibility of burning tdf from the point of view of a cement kiln operator. For the cement plant there is no incremental operating cost in labor for feeding the kiln with tdf instead of coal. There is no disposal cost since the steel wire in the tdf becomes iron oxide, which is incorporated into the cement product. If the tdf is trucked to his plant by the tdf processor, then four terms of the equation can be set equal to zero: F =0, C = 0, T = 0, and D = 0. Thus, for the cement kiln operator, the profit per tire he receives equals the revenue, which in this case is a fuel cost savings. If coal costs $50 per ton and he can get the same Btu value with $20 per ton tdf, then his savings is $30 per ton for using tdf. With the rule of thumb of 100 tires to the ton, R = $0.30.

The tire profit equation becomes P - 0 + $0.30 + 0 + 0 + 0 = $0.30

If the cement operator burns 65 tons of tdf per day, he will burn the equivalent of about 2.4 million tires per year. His annual fuel cost savings from burning tdf is $0.30 x 2.4 million = $700,000. If he has to make capital investments of $1.5 million to set up the feed system for tdf, then the payback period is

Since this is less than three years, this looks like a fairly attractive investment for the cement plant operator.

Note that if he could obtain coal for $35 per ton instead of $50 per ton, his profit per tire consumed would drop to only $0.15 per tire and his resulting payback period would be over 4 years. Then making the equipment investment to use tdf would not be economically attractive. This shows the importance of competing fuel prices in determining the economic feasibility of using tdf.

Burning tdf is often economically attractive for pulp and paper mills. Since their boilers are generally equipped to burn hog fuel, very little equipment modification is necessary to burn tdf. Often the competing fuel for the boiler is hog fuel, which is sometimes more expensive than tdf on a dollars per million Btu basis. For instance, at $30 per ton for wire-free tdf, the equivalent cost per tire consumed is about $0.30. The cost for the same fuel value of hog fuel can be as high as $0.45, when hog fuel is in short supply. If the costs of handling, transportation, and ash disposal are the same for tdf as for hog fuel, then for the pulp and paper boiler operator, the profit equals the fuel cost savings.

If the pulp and paper mill consumes 500,000 tires per year as tdf, then the annual fuel cost saving over hog fuel is $0.15 x 500,000 = $75,000.

If $150,000 in equipment changes are necessary to handle the tdf, the payback period is:

As shown above, a pulp and paper plant can often burn tdf economically. The annual cost savings can justify minor modifications to the equipment to handle tdf.

As discussed above, there are currently operating facilities where the combustion of tires and tdf has proven to be profitable. The economic feasibility of tires-to-energy plants depends on the buy-back rate for the electricity. For tdf consumed at cement kilns or pulp and paper mills, the economic feasibility depends on cost savings over competing fuels. Only a substantial annual cost savings justifies modifying a plant to handle tdf. The next section discusses the noneco-nomic barriers that must be considered once it has been determined that tire combustion is economically feasible.

Noneconomic Barriers

Noneconomic barriers to scrap tire combustion include problems in siting new facilities and environmental concerns. These two types of noneconomic barriers are related since objections to siting are usually due to perceived environmental problems. These noneconomic barriers are discussed below for power plants and tire derived fuel usage.

a) Power Plants. Tire-to-energy power plants are large facilities which cost from $30 million to $100 million. They cover a substantial land area and therefore create considerable public attention. Inevitably, for a potential facility of this size, there are some neighbors who believe the new plant will affect them adversely. This is the not-in-my-back-yard (NIMBY) syndrome, which is a barrier for siting many solid waste facilities.

In attempting to allay the neighbors' fears, Oxford Energy has designed their plant with more extensive pollution controls than the California regulations would dictate. They have a scrubber, a thermal de-NOx unit, and a baghouse for reducing SOx, NOx, and particulates. The high temperature reciprocating grate technology minimizes the formation of dioxins during combustion. A consultant's study of air pollution tests showed the plant to be operating within its permitted limits. The plant also has continuous emission monitoring (47).

The configuration chosen for the plant produces salable by-products, rather than waste products. The flyash from the plant is sold to a zinc smelter. The gypsum produced by the scrubber has been labeled by the state of California as appropriate for agricultural uses. It is sold as a soil conditioner. The steel slag from the plant is sold to a cement kiln for use in cement production.

Oxford Energy's strategy for protecting the tire pile from potential fire hazards includes providing continuous 24-hour surveillance with lighting at night. Guards in watch towers are equipped with infrared telescopes. The entire facility is surrounded by an 8-ft chain link fence. Fire hydrants are provided at strategic locations, connected to emergency water supplies.

In addition to all the investments in environmental control and safety equipment, Oxford Energy also spent considerable effort to inform the public about the plant. They led tours of the plant site and made presentations at public meetings. They also paid for trips to Germany by two Modesto community representatives to tour the Gummi Mayer tiré incinerator that had already been operating for over 14 years using the same technology. Oxford Energy's efforts were successful in convincing the plant's neighbors and the permits were granted.

However, the NIMBY syndrome cannot always be overcome by the methods described above. Oxford Energy was not successful in launching a plant in the State of New Hampshire. The air quality and waste management permits were granted by the State, but a long court battle with the neighbors followed. After another year and considerable expenditure, Oxford Energy concluded that they would not be allowed to build.

The main noneconomic barriers to a tires-to-energy plant are the time required for permitting a plant, and the concerns of neighbors regarding environmental, health, and safety issues.

b) Tire-Derived Fuel. The use of tdf in cement kilns and pulp and paper mills faces considerable noneconomic barriers. This typically occurs when a plant is first considering switching to tdf. At this point new permits are generally required. This generally requires test burns with air pollution measurements, leading to expenditures and additional time for testing. Many plant operators would rather not bother with the disruption and delay, which erodes the projected fuel cost savings. Thus the producer of tdf may have considerable difficulty convincing a plant manager to burn the fuel.

There is a similar situation with pulp and paper mills attempting to burn tdf. Generally, state and local officials have required test burns to ensure that emissions are within regulatory limits. Since tdf burned in pulp and paper mills tends to increase the particulate emissions somewhat, the permits sometimes restrict the percentage of tdf that may be burned.

Sometimes the stringent procedures required in permitting tdf burning can have the effect of controlling one pollutant while increasing another. They reduce any possibilities of increasing air pollution, but at the same time, they force the remaining tires (after source reduction and recycling have taken place) into the waste disposal stream.

PYROLYSIS

At this time, there has been very limited commercial operation of pyrolysis plants in the United States. The primary barriers are economic and technical. In particular, there has yet to be a commercial demonstration of a process to economically upgrade the carbon black to a high-quality profitable by-product. Until such sustained commercial operation occurs, any potential non-economic barriers constitute a moot point.

3. Options for Mitigating the Waste Tire Problem

INTRODUCTION

There is now a general public awareness throughout the U.S. that a waste tire problem exists. However, there is still controversy about the best solution to the problem and how we get there from here. This chapter provides options to address the problem. Several of them may need to be utilized to solve the tire problem.

Over 2 billion waste tires have accumulated in the United States. Some are in carefully controlled tire stockpiles. Many more are in uncontrolled tire dumps. Millions more are scattered at random in ravines, deserts, woods, and empty lots across the country. Each year 242 million more scrap tires are generated. Some of the waste tires are infested with mosquitoes capable of spreading diseases. Large tire piles often constitute a fire hazard. Most tire and solid waste professionals agree that a tire problem exists.

Six facets of the tire problem are listed below:

Tires are breeding grounds for mosquitoes. Besides the major nuisance of mosquito bites, mosquitoes can spread several serious diseases.

Uncontrolled tire dumps are a fire hazard. Fires in tire dumps have burned for months, creating acrid smoke and leaving behind a hazardous oily residue. A few tire fire locations have become Superfund sites.

Tires should be utilized at their highest value. This means reuse or retreading first, followed by reuse of the rubber to make rubber products or paving and then combustion and disposal. At present, the preferred uses do not accommodate all the tires, and disposal must be utilized to a large degree.

Scrap tires have to go somewhere. They tend to migrate to the least expensive use or disposal option, and as costs increase, illegal dumping increases.

Disposing of waste tires is becoming more expensive. Over the past 20 years the average tipping fees for disposing of tires have continually increased. This trend is likely to continue as landfill space becomes more scarce.

Tires take up landfill space. Whole tires are banned from many landfills or charged a higher tipping fee than other waste; even if they are carefully buried to prevent rising they are very bulky. Shredded tires take up less space, but it is space that could be saved if the tires were utilized as raw material for products or as fuel.

As listed above, the continuing accumulation of waste tires has led to six concerns of varying severity. Clearly, the mosquito and fire hazard problems are the most serious of the problems listed. Controlling them in the near term will necessitate providing adequate safeguards on presently existing stockpiles. Ultimately, decreasing the waste tire accumulations will involve appropriate uses of recycling, combustion, and landfilling. The current trends indicate that the quantity of tires utilized in products is likely to remain smaller than the quantity combusted or landfilled in the future.

An integrated solution is needed to the waste tire problem. Both government and industry need to work together to develop markets for scrap tires and to ensure proper disposal of those tires that are not recycled and are not incinerated for their energy value. In the next two sections of this chapter, options for mitigating the scrap tire problem are discussed.

In the first section, the regulatory approaches taken by states are described. Minnesota, in 1985, was the first state to regulate scrap tires (61). Four years later, only ten percent of the states had passed scrap tire regulations. By January 1991, 36 states had regulated scrap tires (12). This section describes the types of provisions included in the state scrap tire regulations, and presents advantages and disadvantages of these options, where relevant.

The second section presents other regulatory and non-regulatory options. Some of these have already been instituted at the Federal or State level, and others are in the form of proposals.

REGULATORY OPTIONS-BASED ON EXISTING STATE PROGRAMS

As reported in Chapter 1, 23 states have responded to the scrap tire problem by issuing laws that specifically address this problem. An additional 13 states have regulated tires under provisions of other laws, for instance solid waste laws. As of January 1991, an additional 7 more were in the process of drafting or proposing scrap tire laws or regulations (12).

As described below, state scrap tire laws may include (1) funding sources; (2) mandates to clean up tire dumps; (3) scrap tire management procedures including stockpile, processor, and hauler regulations; (4) market development incentives; and (5) regulations regarding landfilling of tires.

Funding Sources

Most of the states with scrap tire laws obtain funding through taxes or fees on vehicle registrations or on the tires themselves. The means of funding state scrap tire management programs are described below.

a) Taxes or Fees on Vehicle Titles or Registration. Five states have taxes or fees on vehicle titles. These range from $0.50 to $2.00. In addition the state of Minnesota has a $4.00 title transfer tax on motor vehicles. Advantages are that these fees are collected by the government, therefore do not add to the administrative burden experienced by tire dealers. A disadvantage is that they do not directly tax tires. In addition, in times of recession, revenue decreases. Another disadvantage is that this type of law can be difficult for some states to pass because of state constitutional issues.

b) Taxes or Fees on the Sales of New Tires or the Disposal of Old Tires. Twelve states have taxes on the sales of new tires, and two states have fees on the disposal of waste tires. Taxes on the sale of new tires range from 1-2%, and fees range from $0.50 to $1.00 per tire. Disposal fees on tires range from $0.25 to $1.00 per tire. Advantages of these types of taxes or fees are that they are assessed directly on tires. A disadvantage is that they are often collected by the tire dealer or tire disposer/processor, so there are administrative costs incurred by these intermediaries, before the money is collected by the state government. Some states arrange for tire dealers to retain a designated percentage of the taxes or fees, to defray their administrative costs.

c) Fees on the Permitting of Tire Processing or Disposal Facilities, and the Use of State Budget Appropriations. One state has chosen permit fees on tire storage sites as a means of creating a fund for managing scrap tires. Another state appropriates money for scrap tire management out of its general fund (12). Disadvantages are, however, that funds are dependent on the number of tire-related permits being granted in the state, or the yearly budgetary process. Taxes or fees on vehicles or tires may provide more stable means of funding.

Identify and Clean Up Tire Dumps

Most of the state laws set aside a certain portion of the funds for cleaning up major abandoned tire dumps. As a first step, some states develop an inventory of the tire dumps in the state. They may then rank them in priority order for clean-up. Criteria such as the size of the dumps, and proximity to highly populated areas or to critical natural resources may be used in determining which dumps are cleaned up first. Other actions commonly taken are putting fire protection measures in place, such as installing fire lanes. As the dumps are cleaned up, the tires may be recycled, utilized for energy recovery, or disposed of in a landfill.

Figures from the state of Minnesota show that tire dumps in that state have cost an average of $81,250 per site to clean up, or 65 cents per tire. The most expensive dump cost $300,000 to clean up, and the least expensive one cost $3,000. From 1988 to August 1990, the state of Minnesota spent 17 million dollars on cleanup programs to remove and process waste tires (63). These expenditures have resulted in an estimated 64% of tire dumps (26 sites) either undergoing clean-up or having completed clean-up. (62). It is clear from these figures that the clean-up of tire dumps is expensive. It is, however, less expensive than the costs of fighting tire fires and associated environmental reparations, which Minnesota estimates could cost more than $2 per tire (63).

Methods for Managing Current Tire Disposal

Most states have developed regulations to manage tire stockpiles and processing operations. A number of states have also addressed tire haulers in their regulations (12). These regulations are described below.

a) Stockpile Regulations. Twenty-four states have regulated tire stockpiles (12). Generally, state, or in a few cases local, regulations limit the size of stockpiles; limit the length of tire storage; require fire lanes; require the stockpiles to be fenced in; and may also require permits for stockpiles over a given size. In addition, some States such as Minnesota require owners of stockpiles to establish financial responsibility. They must prove they have the funds to completely remove and dispose of the tires, should the need arise.

b) Processor Regulations. Seventeen states have some type of regulations on processors (12). States may require processors to obtain permits or merely to register. Generally, these regulations limit stockpile size, and establish tire management practices. Processors may also be required to keep records on the source of tires they receive and the final end-user. Some States have less stringent rules for smaller tire piles. For instance, the State of Minnesota regulates tire processors storing 500 or fewer waste tires at a given time, using a permit-by-rule arrangement. Mobile equipment operators need only notify the State of when and where they will be operating their equipment (64).

Advantages of these regulations are better control of processing operations, and disadvantages are the administrative costs to government and industry of these programs.

c) Hauler Regulations. Eleven States have passed regulations on tire haulers (12). These may include provisions such as a state-supplied identification number, and a requirement that only haulers with these ID numbers may take tires. Some states require that tire dealers, processors, and haulers all keep records of their shipments of scrap tires. Generally these records include a contact person, the name and address of the company receiving the tires, and the quantity of tires. This aids in both preventing illegal activity, and aids investigations once any laws have been disobeyed. Again, the balance is between the administative effort and cost by government and industry to maintain permitting and recordkeeping programs, weighed against the benefits they provide in encouraging and enforcing good tire management.

Market Development Incentives

At least twelve states have developed laws incorporating market development incentives for scrap tires. These fall into three categories: (1) rebates to tire recyclers and users of tires for fuel, (2) grants and loans to encourage businesses to recycle tires or use them for fuel, and (3) funds for testing innovative uses of scrap tires. Below, information is provided on the states that have instituted such programs, how the programs work, results, and advantages and disadvantages.

a) Rebates for Tire Recycling and Energy Uses. Oregon, in 1987, was the first state to establish a rebate program. Implementation began the following year (62). Wisconsin and Oklahoma have since passed similar legislation (12). Some of the money collected by the states for their scrap tire management programs is returned to entrepreneurs who are recycling tires or using them for energy recovery. At a minimum, reimbursement is made available at the rate of 1 cent per pound of tire used. This is equivalent to $20 per ton. Below, information on the administration of these programs, their results, and their advantages and disadvantages, is provided.

In all three programs, a portion of the money collected by the state is redistributed to users of tires. In Oregon and Wisconsin the state performs this role, and in Utah the funds are distributed through the local Boards of Health.

Each state has somewhat different rules on who is eligible for reimbursement. The Oregon program provides rebates to end-users of tires, specifically recyclers and those utilizing tires as fuel. Certain uses of tires, such as retreading, and the use of rubber buffings from re-treads are not eligible for funding. Artificial reefs made from tires are eligible in protected coastal areas such as estuaries and bays, but not in the ocean. Some uses such as paving projects using crumb rubber from tires, are reimbursed at higher rates. This is because the state would like to encourage recycling, and because the rebate must be higher to offset the difference in cost to make the product using rubber compared to the competing conventional product.

The Wisconsin program provides rebates to end-users of scrap tire materials but not to processors. Processors may, however, benefit indirectly if the end-users can now afford to pay them more for the processed tire material. Like the Oregon program, rebates can be provided to out-of-state end-users that are using Wisconsin tires.

The Utah program provides rebates to end-users of tires, to tire processors, and to certain Utah haulers who are taking tires out of state for recycling or for energy recovery. Utah's legislation includes a sunset clause that ends the rebate program after five years (66).

An advantage of these rebate programs is that state governments can use them to directly encourage forms of tire recycling and disposal that they believe are most beneficial in helping to manage tires entering the waste stream and in cleaning up tire piles. Representatives from both Oregon and Wisconsin state governments report that the rebate systems have been very successful in encouraging additional companies to start using scrap tires, especially for use as fuel. They believe the rebates have made a strong contribution to the success of their scrap tire management programs (65, 66). It is too early for evaluations of Utah's program because the legislation was passed in 1990.

Some argue that a disadvantage of these programs is that many of the companies receiving the rebates would be using the tires regardless of any rebates. In addition, in states in which processors are not eligible for rebates, some processors have asserted that they should be allowed to receive rebates. The Wisconsin system, in which out-of-state end-users can receive rebates for Wisconsin tires, have caused some difficulties for nearby states. Some of the processors in nearby states prefer to utilize Wisconsin tires rather than tires from their own state.

Another disadvantage is that at the outset, these programs can be controversial. After such legislation has passed, it takes some time to build up funds for rebates, meanwhile entrepreneurs may be stockpiling tires so that they can take advantage of the rebates once they start flowing. In addition, consumers may criticize a system in which recyclers and waste-to-energy companies are receiving rebates, while the consumers are paying $1 to $3 to accept their scrap tires (66). Experience with Oregon's and Wisconsin's programs, however, show that these may be short-term disadvantages.

b) Grants and Loans by State Governments. At least twelve states have programs in which grants or loans are available to tire entrepreneurs and to others who would like to perform research or investigations into uses for tires, or who would like to start or expand businesses that utilize scrap tires. These programs may be specifically for scrap tires, or may be part of larger recycling or solid waste management programs. As of May 1990, Minnesota, Illinois, New York, and Michigan had both grant and loan programs. In addition, Pennsylvania and New Jersey have a loan program, and Wisconsin has a grant program (67).

Provisions of these programs vary widely from state to state. Michigan's program can provide loans for market development research in recycling, as well as for product marketing of recycled materials. New Jersey also has financing available to recyclers. Higher loan limits are available for recycled plastic and tires than for other recycled materials (67).

Several states provide grants for feasibility studies to investigate recycling processes and methods, or for feasibility studies regarding new businesses. Grants range from 50 percent to 100 percent of the cost of these projects or studies (66).

As with any grant or loan program, advantages are that the government is helping businesses or other entities develop better ways to utilize tires and increase the number of tires that are recycled or utilized for their energy value. Disadvantages occur when grants or loans are provided to enterprises that could have succeeded without the extra help, or to enterprises that falter when the extra help is no longer available. The cost of administering grant and loan programs is also a disadvantage.

c) Funds for Testing Innovative Uses of Scrap Tires. Several states have set aside funds for research and development of innovative uses for scrap tires. A number of states, including Minnesota, Florida, New York, and Oregon, have been testing rubberized asphalt. Several states have been evaluating air emissions from the incineration of tire-derived fuel in facilities such as cement kilns, pulp and paper plants, and power plants for electricity generation.

Regulations Regarding the Landfilling of Tires

Many states have passed laws regulating the landfilling of tires. Some states require that tires be split (Florida requires at least eight pieces) and other states require that tires be shredded before landfilling. The State of Ohio is considering tire monofills and monocells for shredded tires. As a practical matter, whole tires often are charged high fees at landfills, because operators find them difficult to handle. Therefore, even in states where landfilling of whole tires is allowed, the practice has been decreasing.

Advantages of regulations on landfilling tires are that they can make tire material easier to handle at landfills. These regulations also may discourage landfilling. This could spur the state and industry to develop and improve means of using waste tires, such as retreading, recycling, and tires-to-energy alternatives. However, if these alternate means do not become available soon enough, this may result in illegal dumping, or an increase in the export of tires to other states. It is, therefore, important not to restrict tire management options prematurely before there is adequate source reduction and utilization capacity.

OTHER REGULATORY AND NON-REGULATORY OPTIONS

Following are additional regulatory and non-regulatory options which have been suggested to help mitigate the scrap tire problem. Some of these have been implemented and others are merely ideas under consideration by some tire or solid waste management experts from government or industry. The following topics are discussed below: (1) procurement strategies; (2) research; (3) grants and loans; (4) additional coordination among states; (5) education and promotion; (6) waste exchanges; (7) tradeable credits; and (8) tax incentives.

Procurement Strategies

The Resource, Conservation, and Recovery Act of 1976 (RCRA) mandated that EPA prepare guidelines for the purchase of retreaded tires for federal agencies and for agencies using Federal funds to procure supplies. The final rule was issued November 17, 1988 and became effective November 17, 1989. Since then the U.S. General Services Administration (GSA) has developed specifications for retreaded tires and has developed protocols for testing tires. Of 365 contract awards for supplying tires to the Federal government, 70 went to retread tire manufacturers.

On February 20,1986, EPA proposed procurement guidelines for scrap rubber usage in asphalt; however, they were not made final because many state highway departments believed that not enough research had been completed at that point to justify promotion of this technology nationally through procurement guidelines.

Procurement guidelines for materials such as rubberized asphalt, products made from reprocessed rubber, and rubber railroad crossings are all potential means of helping to encourage these uses of scrap tires.

Research

Both the Federal government and states have sponsored research. Funding levels for Federal research on the waste tire problem have fluctuated widely over the past two decades. The Department of Energy (DOE) has also researched recycling of tires, incineration and pyrolysis. Pyrolysis in particular, received significant research funding in the 1970's, but the economics as yet have not been favorable for this technology to be commercially established in the United States.

Both the Federal Highway Administration, and in the 1970s, the EPA, have funded research on the use of rubber in pavements. Many states' highway departments have also funded research. A five-year research project, the Strategic Highway Research Program, is addressing the use of additives such as rubber from tires, in asphalt. This is a joint effort by the National Research Council, the Federal Highway Administration, and the American Association of State Highway and Transportation Officials.

Areas which appear ripe for further research include: (1) research on the use of crumb rubber in plastic and rubber products, (2) research on environmental emissions from tire incineration, and (3) research on rubberized asphalt.

Presently DOE is funding Air Products & Chemical Company for the development of a fluorine surface treatment of tire rubber (crumb rubber) to modify its adhesion properties. This modified rubber could be used in making polymers such as polyurethane and epoxies. The tire rubber might also be used in certain plastics such as polystyrene and PVC, and in rubber products (68).

EPA is currently collecting existing environmental emissions data from facilities incinerating tires for energy purposes. This information can be compared to data on emissions from these same facilities when using conventional fuels such as coal and hog fuel. Several states and industrial facilities have been conducting test burns of tire-derived fuel, to gather this environmental data.

Research on the use of crumb rubber in asphalt paving needs to be intensified and brought to a conclusion. Research on newer forms of rubber and asphalt mixtures, some without patent protection (thus available at lower cost), needs to be continued. Research on how asphalt-rubber and rubber modified asphalt concrete can best be recycled should be performed.

Additional Coordination Among States and Localities

States and communities can work together to address tire problems. They can pool resources so that studies of the use of rubber in pavements, and studies of other uses of rubber from tires, could be performed on a larger scale leading to more useful results.

Tires tend to migrate to the least expensive use or disposal option. Neighboring jurisdictions can- work together in planning their policies so that there are consistent economic incentives to send the tires to a location where they can be utilized, such as to a tire product facility, a tire-to-energy power plant, or a tdf production facility. This can help ensure the success of the facility. For instance, if one town has a tires-to-energy power plant, it may be counterproductive for a nearby city to set up a municipally subsidized landfill with a shredder that will accept tires at a lower tipping fee. In this case, most of the tires would gravitate toward the lower tipping fee and be landfilled, rather than go to the power plant to be utilized.

Education and Promotion

Education and promotion is an important component of any program to alleviate the problems of waste tires. Audiences that may need to be informed about one facet or another of the scrap tire problem include individual citizens, environmental groups, tire dealers, corporations, those who are or would like to be involved in businesses related to scrap tires, potential users of scrap tire material, and representatives of local, state and Federal government.

It is particularly difficult to control the dumping of tires in sparsely populated areas, and special efforts may be needed to recognize the problems before they get out of hand. Waste tire dumps may be started on abandoned land and may accumulate thousands of tires before authorities become aware and are able to take action. Informed citizens and local police may be particularly helpful in spotting nascent illegal tire dumps.

Citizens can be educated regarding source reduction alternatives such as caring properly for tires and using retread tires. Both governments and companies operating fleets of vehicles can be encouraged similarly. Federal procurement guidelines for retreaded tires, described above, address this issue.

Tire dealers need ready access to information on reputable or licensed haulers, recyclers, or disposers of waste tires. They also need information on companies that sell used tires and that retread tires. Information on the location of large tire piles is helpful to entrepreneurs seeking to process these tires for eventual recycling or energy recovery.

Suppliers of scrap tire-derived products often need to educate themselves on the requirements of potential users of their products. For example, facilities that can use tire-derived fuel may need this fuel supplied with uniform, consistent quality. Producers and users of tdf need to work together to classify this material based on factors such as size of chips and quality of the cut. (i.e., Are there wires protruding from the rubber chips or is it clean-cut?) This information will help potential users be assured of quality supplies that will not damage equipment. This information in turn, aids in developing and expanding markets for tire-derived material.

Information on all potential uses of tires for recycled products and for fuel should be widely distributed. Dissemination of available data regarding environmental controls and emissions is also helpful in ensuring that industrial users of scrap tires implement environmentally sound practices.

Education and promotion may take several forms. Newsletters, fact sheets, hotlines and conferences on scrap tires can provide the most current formation on such topics as regulatory developments or new processes for utilizing tires. Computerized data bases, and clearinghouses, whether operated by government or by trade groups, are also helpful. These means of communicating are particularly important for scrap tires, as this field, like much of recycling, is changing quickly. Reports and studies can provide either broad overviews or more in-depth coverage of specific tire-related topics.

Waste Exchanges

Another means to aid recycling of tires and the utilization of tires as fuel is to expand the use of existing solid waste exchanges to include tires. Classified advertisements in magazines and newsletters can help those who have sources of tires to find users of tires. Appendix C provides a partial list of newsletters and magazines that may contain advertisements helpful to entrepreneurs dealing with scrap tires.

Tradeable Credits

Congress has been considering numerous pieces of legislation that pertain to the management of municipal solid waste. Some of these focus particularly on scrap tires. One innovative approach under discussion is a credit system. Manufacturers would only be allowed to produce a new tire if a given number of tires were recycled, processed, and /or burned for energy recovery.

Credits would be allocated as follows. One quarter credit could be granted for shredding one tire, or for burning a shredded tire. One-half credit could be granted for burning a whole tire. Three-fourths credit could be granted for reusing or recycling a shredded tire. Finally, one credit could be granted for reusing or recycling one whole tire (69). The Federal government would work with state governments to administer this program.

Tax Incentives

Tax incentives were utilized as part of the financing package to build the Modesto tires-to-energy power plant. Tax-free municipal bonds were issued to borrow money from investors to build the plant. Utilizing tax-free municipal bonds allowed borrowing the money at a lower interest rate.

Entrepreneurs are clearly responsive to tax incentives in building a major waste tire processing facility such as this one. If a state or local government deemed it especially desirable to site such a facility they could enact legislation to award appropriate tax breaks.

The utility buy-back rates paid to tires-to-energy facilities have an effect similar to tax incentives. The difference is that the money ultimately comes from the utility customers rather than the tax payers. No state has yet attempted to use state funding to subsidize tires-to-energy plants.

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