Tire recycling enables to recover precious materials from end-of-life tires in an environment friendly manner to a) tackle the issue of enormous waste tire accumulation and b) make profit from reselling material to manufacturer of ruber goods or manufacture value-added products on your own.
You will get efficient and thoughtful service from Optima.
Scrap tires can be recycled into rubber of different sizes, ranging from rubber chips to crumb rubber and fine rubber powder. The products are of high demand in different industries. However, to establish a successful tire recycling business, one needs to account for different factors, such as minimum production capacity, value adding technologies, long-term contracts, seasonality, etc.
For detailed information, material prices and financial primers, contact out team of experts! We will help you understand all factors you need to take into consideration before launching a tire recycling business.
Pyrolysis is an age old concept. Tire Pyrolysis, however, represents a nascent market that is experiencing a boom in recent years. Its promise of significant contributions to a circular economy has globally spawned a lot of investment leading to major technological developments and new markets.
As in any maturing market, these developments represent both great opportunities and significant challenges. There are many successes but also many unsubstantiated claims, misunderstood specifications, operational pitfalls and inconsistent acceptance of the products that tire pyrolysis generates. At Weibold we are constantly monitoring the collective experiences gained and are on the look-out for the benchmarks that will define the best practices in the maturing markets.
Below, we list and describe the basic tire recycling and pyrolysis products, as well as some applications in consumer goods manufacturing.
Standard rubber processing technologies yield three types of recovered materials:
While tire rubber is the most precious out of all recovered materials in tire recycling, both textile and steel wire are referred to as by-products and do not yield significant profits. Below, we elaborate on each type of materials.
There are two main factors influencing prices and applications of recycled rubber: size and purity (from steel and fiber). Below is the list of recycled tire rubber sorted by size.
Tire chips are produced from rough tire shreds using the same primary shredder complemented by screening and recirculation equipment. Tire chips of this size can be sold as tire-derived fuel (TDF) or used to produce crumb rubber and fine rubber free of metal and fiber.
Tire chips free of steel are also referred to as rubber mulch. The material can be used mainly in landscaping and playgrounds instead of conventional mulch. Thorough magnetic separation of steel allows to increase value of the product.
Crumb rubber is a fiber-free and steel-free granulate that can be used in molded products like playground mats, rubber tiles, traffic safety equipment, rubberized asphalt, synthetic turf, rubberized flooring, sound insulation panels, porous drainage systems, etc.
Fine rubber powder is a high-quality and high-priced material 99.9% free of metal and 99.9% free of fiber. Fine rubber powder is used in sealings, liquid and spray coatings, membranes, insulation systems, thermoplastic elastomer blends, automotive appliances, rubber-modified asphalt and in many other fields of civil engineering.
As a rule, up to 20 percent of a tire consists of high-quality steel wire, which is a valuable high-demand commodity. An advanced magnetic separation system allows collecting and reselling steel wire from tires to smelters, where it is further processed.
While tire derived steel is usually sold at low prices and rarely used in manufacturing, researchers claim that a huge volume of the material can be successfully reused in concrete. Interestingly, not only steel wire can be used to improve properties of concrete, but synthetic fibers, too.
Usually, tires contain up to 15% of fiber and nylon which can be used as a supplement to tire-derived fuel in cement kilns, suppement to fiber-reinforced concrete, fiberglass, pressed carpets, absorbent cleanup material, etc. Currently, the market for tire-derived fiber is under active development.
Despite the fact that the material doesn't have a wide use today, researchers claim that the textile polymer fibers used as reinforcement material in passenger tires is also of high quality and strength and can be used to control prevent of concrete curing at the early stages, when the material is still plastic. Textile fibers have also been shown by some research teams to help prevent explosive concrete spalling during fires, and applications are being developed for tunnels and buildings.
Four main output products from tire pyrolysis are:
The last two types of output are referred to as by-products. Whereas steel is relatively easy to sell, albeit at reduced prices, synthetic gas isn't a sellable nor usable product due to its inconsistent quality.
However, fuel oil and recovered carbon black are products with great commercial potential. More about the products below.
In tire pyrolysis, oil makes up approximately 35-45% weight of output depending on type of the thermal treatment. Tire-derived pyrolysis oil with a wide distillation cut consists of three fractions with the middle distillate fraction prevailing, and it cannot be considered as an alternative blending component for commercial motor fuel, fuel oil or heating oil before a purification and additional treatment.
The main applications of tire pyrolysis oil are: maritime fuel, fuel for vehicular engines, fuel for stationary engines (power generators) and furnace fuel used by heating companies.
Scope of applications of pyrolysis oil depends on local and national regulations. In countries with strict environmental regulation tire-derived pyrolysis oil may require distillation & chemical treatment and/or additional refining process, which in turn will upgrade its quality and application properties.
Utilization of the tire-derived pyrolysis oil as fuel oil component for power plants is one of the most common applications of the product. It usually does not require a final boiling point (FBP) modification and chemical treatment, but thorough filtering, which makes production process significantly cheaper as opposed to using it as motor fuel or marine distillate pool component for diesel motor vehicles, vessels and stationary diesel engines.
The main challenge to sell the heavy fuel oil in different countries is sulfur content. National regulations vary from country to country, but European regulations are particularly strict to sulfur content in fuels.
To successfully sell tire-derived pyrolysis oil (diesel-like fractions) to power plants or maritime transportation companies as an alternative fuel oil component, custom formulation and quality enhancements are needed.
Weibold's team will gladly help you find out which technical and chemical parameters you need to account for to build a successful tire pyrolysis business and supply power plants, maritime transportation companies and stationary diesel aggregates with your oil.
Recovered carbon black (rCB) accounts for approximately 30% to 45% of tire-derived pyrolysis output. rCB is used both in energy recovery applications and as a replacement for virgin CB in manufacturing applications such as paints, industrial and automotive parts and rubber goods.
Tire-derived rCB may appear an economically attractive and valuable product with a potential to compose a significant portion of plant’s revenues. To make it marketable, post-pyrolysis treatment steps may be required. The degree of purity and amount of treatment required by the end product will have a major impact on the value of rCB, and thereby on the plant’s overall profit margins.
Below, we will describe different production methods and the most common equipment types for tire recycling and pyrolysis.
To meet the different requirements of potential applications for the rubber recovered from scrap tires, processing and recycling systems must be able to produce goods with clearly defined characteristics, which are suitable for use in a wide range of applications.
In this context, shredding, grinding and milling technologies are crucially important as they are the core of the recycling process. High quality equipment broadens scope of application of the recycled material.
The choice of technology affects the quality of the rubber granulate and powders:
Size, shape, surface and purity are quality aspects that cause material acceptance among customers. Output quantity and cost are aspects that influence the customers’ willingness to purchase the material, hence they are the long term success of a tire recycling company.
Basically, there are two available technologies to transform used tires into rubber granulates and powders which can show a successful history in the industry:
Ambient grinding comprises all sorts of mechanical shredding operations, which are carried out at room temperature. Knife shredding operations are predominant, whereby the input material is reduced during several stages to smaller and smaller sizes. Sieving technology is used to classify the various sizes according to the required applications. Lately roller mills became a preferred choice for tire recyclers to produce rubber powders.
The input material is cooled down to approx. minus 90 degrees Celsius by means of liquid nitrogen until the rubber reaches a “glassy” state. “Glassy” is not really a technical term but shall only express the fact that the frozen rubber can easily be broken apart by means of e.g. hammer mills or desintegrators with very high impact energy.
Currently an estimated one percent of rubber granulates and powders are produced by means of cryogenic technology. Despite the few installations there are some good reasons for using cryogenic processes for certain applications.
Although we are not aware of any industrialized setup we need to mention a third way of recycling tires.
The process applies UHP (Ultra-High Pressure) waterjetting to pulverize the rubber with rotojetters in a single operation without any mechanical grinding or the use of chemicals. This process is designed for large and very large tires which cannot be recycled in a conventional way, such as normal OTR (off-the-road) tyres or even the open-mining tyres of dia 4m.
There are many technological concepts for tire pyrolysis on the market or in development today. Some are still in the experimental stages. The core of any pyrolysis plant is a reactor that decomposes rubber chips without the use of oxygen. The choice of technology and its supplier should be made in the context of the planned plant throughput capacity and the specifications of the output products.
Depending on local supply, market, and regulatory conditions, additional investments in pre-processing and post-processing steps may be required to arrive at a viable solution for the plant. Regulatory requirements force controlled plant emissions, Requirements for quality and consistent feedstock with controllable origin are dictated by the target specifications and quality for the product output. rCB product requirements may mandate additional post-pyrolysis treatment of the carbon char. Also, depending on the chosen target customers, the oils may have to be desulfurized and cleaned in order to make them more attractive and achieve higher profit margins.
Contact us with your pyrolysis challenges and let us help you make the right choices for concepts, technology, feedstock and markets!
If you are just about to launch your first tire recycling business or upgrade an existing plant, you must be looking for reliable machinery with high performance. To help you make the right choice, we describe below important equipment parameters you would need to consider before launching your new plant.
If you would like to have an efficient equipment that would match needs of your business, you need to compare equipment capabilities to your estimated supply and processing time. If equipment slows down your production time, costs of your operation grow and thus cut down your profit. The only reasonable excuses for slower production is better output quality and higher safety. Make sure your tire recycling line operates at high capacities so you have enough spare time for unplanned equipment maintenance.
In tire recycling, there are a number of equipment modules and some of them are designed for separation or purification of material. Scrap tires contain not only rubber, but also by-products like steel wire and textile. These are, on the one hand, valuable products, but on the other hand, their inclusion into rubber granulate or rubber powder can significantly decrease quality and price of your material. Make sure you find equipment that will maximize your potential earnings with the best possible final product.
Energy efficiency is one of the cornerstones in tire recycling business. Choosing inefficient equipment could detriment your business, as it could significantly increase your costs. Eventually, higher electricity bills may affect your bottom line. Still, importance of this parameter depends on your country of operation and local electricity prices.
Another important factor is staff needed to operate your tire recycling equipment. Similar to what we considered in electricity, labor-intensive business model could prove good if you operate in countries with low income and low minimum wages. For instance, some recycling balers, require labor to hand-tie the bales, and others have automated tying. If your labor costs are high, consider upgrading your plant with automatic equipment.
To make sure that equipment will reliably last for many years, inquire its recommended operating time from the manufacturers. Simple arithmetic calculations will help you plan your expenses way ahead and this will give you a chance to prepare financially for timely replacement of the old equipment. To make sure that operation time declared by the manufacturer is correct, find tire recycling companies who already use the same equipment and compare theory with facts.
It is important to know in advance when your equipment would need major maintenance and replacement kits. Firstly, you would need to plan interims for downtime in your production schedule. Secondly, you must be financially prepared to maintenance expenditures. Compare maintenance costs of the equipment of different manufacturers and then resort to tire recycling companies who already operate this equipment. Once again, compare numbers declared by the manufacturer with facts from operators. To be always prepared to unintended consequences, make sure spare parts can be swiftly delivered to your facility in case you have an emergency.
Safety is utterly important with heavy equipment, and it’s even more so when you are processing materials that can be hazardous. Know exactly what safety features the equipment has so you can compare different models and equipment from different manufacturers. Bear in mind numerous potential hazards from ignition of rubber powder during production to staff members falling into shredders. By any means, you must prevent accidents at your plant and equipment manufacturers are the ones who can help you do that.
Remember that you are not just buying equipment, you are creating a relationship with the company that makes it. Don’t settle for a company that does not provide the customer service you deserve. Find reviews, testimonials, and other information from people who have bought from the company so you know exactly what you’re getting into and how happy you can expect to be with the level of service. You can also look for awards and ratings by marketing research and customer service agencies.
As a rule, warranty for tire recycling equipment covers only the first year of operation, because operating time of the equipment largely depends on recycling practices of the processor. Nevertheless, you should make sure you receive reimbursement and proper technical support if things go wrong. In this capital-intensive business, your precaution won’t be redundant.
Almost always, searching for tire recycling equipment is a hard and time-consuming process which requires a lot of your attention and constant comparing of data declared by the manufacturer with real figures from tire recyclers. For individuals who are newcomers to tire recycling business, it can be very hard to gather this information and make an adequate decision. To save time and money, you should resort to experts who can give you an adequate advice.
Weibold helps both new and well-established tire recycling companies clearly define all pros and cons of equipment. Our technical comparison studies have already supported a number or companies worldwide and saved tens of thousands dollars to recyclers in the form of lower expenditures and higher performance.
To order a technical comparison study, send us an inquiry to and we will help you build successful tire recycling business.
Recycling tires into materials such as steel-free crumb rubber and fine rubber powder used to be a profitable venture; however, due to market saturation in developed economies, tire recycling companies might want to shift their focus from raw materials to potentially higher-priced consumer goods made from recycled rubber or even virgin rubber which can be replaced by tire-derived materials. The first and so far one of the most viable choices of tire recyclers would be investing in presses and molds to produce molded goods from crumb rubber or rubber powder. Another options include more complex technologies, e.g. blending recycled rubber powder with polyethylene or polypropylene to produce thermoplastic elastomers (TPE).
As a rule, manufacture and sales of consumer goods yield higher margins than production and distribution of raw materials, and yet markets abound with opportunities in the field of molded and other value-added products from recycled rubber. The most common examples of molded goods are playground mats, flooring tiles for gyms, rubber curbs, traffic safety products, insulation panels, equine mats, carpets for cattle etc. However, one needs to keep innovating and inventing new products. Due to high supply and relatively low prices of recycled rubber in most of OECD countries given rapidly advancing technology, every year the number of molded products from recycled rubber expands.
This article lists some of the products from recycled tire rubber which could significantly increase profit margins of tire recycling businesses.
Chassis from recycled tire rubber | Photo: courtesy of Gumiimpex
In Europe, the technology has been on the market for quite some time and many companies manufacturing and assembling waste bins, municipal and industrial trash containers started using chassis from recycled tire rubber. As a rule, such chassis not only contribute to cleaner environment, but also help companies cut production costs – market price of such goods is notably lower. Croatian company Gumiimpex can serve a good instance of such a manufacture.
Yet, developing regions such as, for instance, North Africa or Middle East, lack such manufacturers and import rubber wheels for waste bins from key manufacturers in Europe and Asia. Many countries around the world find themselves in similar situation – vast market opportunities on domestic and regional markets remain unexplored.
ADS Advance| Photo: courtesy of Rosehill Security
Recent news in tire recycling industry features a British company Rosehill Security that will start providing its molded security products from recycled tires, including hostile vehicle mitigation (HVM) barriers, Ballistic Blocks and Rapid and Impakt Defenders to the US market. According to the company, it recently signed a deal with ARX Perimeters which gives the company a new window of opportunity.
The production of Rapid and Impakt Defenders relies on recycled tire rubber, and uses polyurethane to getting extra strength. The product can be used in almost all types of surfaces, ranging from roads to stadiums. It is also possible to apply them in combination with mobile perimeter and high-security fence systems – this would secure boosted protection.
Rubberized metro tracks in Spain | Photo: SIGNUS
In Spain, Acciona Infrastructure Group – a company earlier teamed up with researchers, Spanish waste tire management authority SIGNUS and tire recycling industry players studied how recycled tires could benefit municipal railway systems. The company explained that its team was searching for methods to reduce noise from trains on railroads, adding further that they were also thinking how to benefit the environment.
Currently, a 16-kilometres subway route which uses recycled tire rubber stretches between four points in Spanish Granada – Albolote, Maracena, Granada and Armilla; 13 of them are on the surface and 3 km stretch underground. According to the company, the Acciona’s innovation does not require huge investments to carry out proper maintenance and molded rubber pads for railroad tracks can be easily installed. In addition, the technology helps transform scrap tires into valuable products greatly reducing the end-of-life tire problem. According to the company, to produce one meter of tracks approximately seven scrap tires are needed.
Giovanni Maria De Lisi, founder of Green Rail | Photo: courtesy of Green Rail
Several years ago, a joint agreement had been signed between Spanish technology company Indra and an Italy-based young company at an experimaental stage – Greenrail, which has been involved in manufacturing of environment-friendly covers for railroad ties from recycled tires and plastic. The partners tried to develop merchandise from recycled tires and construct new production lines, which would cater to the rail industry. Apart from utilizing scrap tire rubber, the collaboration between Greenrail and Indra was supposed to make railway maintenance process more energy-efficient and cost-effective, as well as safer. Indra was responsible to supplying embedded electronic systems for the covers.
The joint venture between companies could have been a powerful tool to transform the industry, however – according to an up-to-date information received by our team – the project has been put on halt due to inefficient managament.
Successful tire recycling business requires high returns on investment, and apart from lowering operational costs one needs to keep innovating and looking for new revenue streams. To explore opportunities in innovative rubber products, including molded rubber goods, contact Weibold and consider our specialized market researches. Weibold’s 20-year-long expertise includes not only the economic side of running tire recycling and pyrolysis businesses, but also production technologies. Write us at to learn more about our work!
This article sheds light on complexities and constraints of planning and operating a tire pyrolysis business and shows how Weibold can help companies build economically sustainable tire pyrolysis plants.
Pyrolysis is an age old concept, whereas pyrolysis from end-of-life tires (ELTs) is a nascent field in an immature market. Today, in the ever present push towards a circular economy, this technology receives ever more attention in the tire recycling community – investments in tire pyrolysis businesses increase, technology keeps advancing and ever more operators appear on the market worldwide.
Despite these positive trends, we can observe that there are many claims but as yet only sporadic evidence of production successes. Conceptualizing and designing an economically viable pyrolysis plant still remains a complex task – this is a field with many choices and many variables where no single best solution exists. In addition, there are many pitfalls, such as misunderstood requirements, faulty technology, lack of industry standards or inadequate controls.
There are also regulatory factors affecting the economics of ELT pyrolysis. Among them are: waste tire management policy, plant emission limits, life cycle analysis requirements, diesel mixture standards for various markets (bio, non-bio, marine, etc.), incineration materials constraints (rCB), parts materials constraints (rCB), etc.
These constraints represent significant challenges to planners and operators. But – as in any developing market – these challenges also represent promising opportunities. To see constraints, effects and opportunities arising from these factors, please consider the table below.
One particular constraint for tire pyrolysis businesses involves regulatory requirements for low sulfur content in diesel and other fuels targeted by pyrolysis operators. This particular constraint holds many operations back from securing volume off-take contracts at reasonable margins.
The size of the capital expenditures also comes into play – tire pyrolysis equipment prices range from EUR 60.000 to 25 million. And in order to build a successful operation, further investments may be needed. The need for controlling quality and consistency of waste tire feedstock, fuel oil requirements and CB buyer product specifications most often mandate additional pre- and post-pyrolysis treatment steps.
Our financial tools allow us to precisely model and fine tune a given operation for a given location, feedstock supply situation and off-taker market by determining the operation’s sensitivity to a multitude of parameters, such as supply make-up, labor and power costs, throughput parameters, efficiencies, investment sizes, as well as output material specifications and achievable price ranges for TDFs and rCB.
Having researched and modeled greatly varying operations, we can demonstrate that, since oils invariably make up 40% to 50% of produced materials, pyrolysis plants usually only become viable when both the oil and CB products are successfully marketed and monetized.
Based on these experiences we can also make the following general observations:
For new tire pyrolysis projects, we at Weibold have therefore devised a prudent approach to planning a new operation, which includes:
For existing tire pyrolysis operations we recommend carefully researching and finding potential customers within reach of the operation, developing a relationship with them, and analyzing their needs. Only once the product requirements are understood in the context of the off-taker’s products does it make sense to evaluate and select technology suppliers and invest in post-pyrolysis product refining equipment.
A summary of these findings with an example of calculations for various process configurations can be found in the presentation that Weibold gave at the Recovered Carbon Black Conference in Berlin, May . The presentation can be sent upon request.
There also exist opportunities for operators of existing plants (specifically batch processing plants) to significantly improve plant throughput, performance and output quality without the need for post-processing refinement equipment. Information for this upgrade program can be sent upon request.
To mitigate the planning risks, meet the challenges and explore the opportunities in any phase of your tire pyrolysis project, contact Weibold and consider our specialized services. Our feasibility studies, market research modules, as well as technology evaluation and financial modeling services can help you avoid pitfalls, protect your investment, solve technical problems and improve your profit margins. Write us at to learn more about our work!
Used and end-of-life tires can be managed in different ways depending on a variety of economic factors and legislative issues in a country. In Europe, for example, there are three different models of managing used and waste tires. The majority of the EU’s countries implemented producer responsibility system, whereas some of EU members have a free market system of scrap tire management and some – government responsibility system financed through tax. Below, we cite the European Tire and Rubber Manufacturers Association (ETRMA), which provides definitions and describes tire recycling regulations governing scrap tires in Europe.
Under the liberal system, the legislation sets the objectives to be met but does not designate responsible bodies. In this way, all the operators in the recovery chain contract under free market conditions and act in compliance with the legislation.
This may be backed up by voluntary cooperation between companies to ensure best practices. Liberal market systems operate in Austria, Switzerland, Germany and the UK. United Kingdom has a managed free market, i.e. scrap tire collectors and tire recycling companies report directly to national authorities.
Throughout the European Union, the government responsibility system funded via taxes is used only in Denmark and Croatia. Under the taxation mechanims, each country is responsible for the scrap tire management. The system is funded via taxes levied on tire manufacturers.
As a rule, tire manufacturers want to ensure that their end-of-life products – scrap tires – are dealt with in an environment-friendly manner. According to the government responsibility system, tire manufacturer is only responsible for ensuring that his products have a suitable recycling and recovery route.
With this regard, the European Tyre and Rubber Manufacturers Association (ETRMA) writes:
“The challenge is to collect and recover all tyres and prevent them from going to illegal landfill, or to manage their export to ensure that their destination is acceptable to European requirements i.e. that they are being treated in equivalent environmental conditions as in Europe and fulfil the legal prescriptions of the EU Waste Shipment Directive.”
Contact us to discuss your requirements of Tire Recycling Machines Suppliers. Our experienced sales team can help you identify the options that best suit your needs.
ETRMA adds that in Europe, various management plans have a mission to ensure that the required environmental standards are met and all parties do their best to ensure compliance with the regulations. However, when not taken care of by scrap tire management companies, “tires leaving EU borders may not be fully traceable as to their final destination.” ETRMA perceives this as a weakness that needs to be addressed by stronger tire recycling regulations around the world.
Producer responsibility means that the tire manufacturer is fully or partially liable for a product which reaches a post-consumer stage of its life cycle. Namely, under this system, the tire manufacturer is liable of ensuring that the tires which reach end-of-life stage are disposed of responsibly and in an environment-friendly way.
In this system, the producer is responsible for the waste that the consumer generates. The law defines the legal framework and assigns the responsibility to the producers, i.e. tire manufacturers and importers, to organize and carry out scrap tire management.
Description of extended producer responsibility system. Infographics: ETRMA
According to ETRMA, the extended producer responsibility is “followed through in various ways from a single scrap tire management company carrying out tire collection and treatment in a country (such as in Portugal, the Netherlands or Sweden), through multiple ELT management companies (such as in Italy, France or Spain) or through individual producer responsibility (Hungary).”
The law entitles these companies to collect and handle scrap tires in amounts equivalent to the volumes of tires “sold individually or collectively by affiliated companies during the same year or the year before.”
Funding of tire collection and tire recycling is carried out through environmental contribution charged upfront by scrap tire companies companies from the affiliated tire manufacturers and tire importers. The fee is initially collected by tire manufacturers and distributors and passed on to scrap tire management companies.
In most the EU countries, tire manufacturers prefer extended responsibility system.
To order our consulting services and studies about scrap tire regulations, send us an inquiry to and we will help you build successful tire recycling business.
Weibold produces custom-made studies in the field of tire recycling and pyrolysis to help you launch and effectively run business. Get in touch with us to learn more about our services.
The Things to Consider When Planning on Starting a Scrap Tire Business
In certain geographic areas, there are not sufficient markets or processing capacity to handle all the scrap tires generated. In these situations, an entrepreneur may consider the possibility of entering into the scrap tire business. Depending upon the situation, the business opportunities could exist for the entrepreneur to collect, transport and/or process tires. While opportunities may exist, it must also be noted that this is not a business without risk, especially for those entrepreneurs who are not properly prepared for the challenges that will be encountered.
When starting a scrap tire company there is a series of business decisions that must be given extensive research. These decisions will be based on a series of factors, all of which must be fully explored before each decision can be made. Often, later decisions will be a function of decisions made early in the planning process.
The information provided in this document was developed as a tool, designed for a “newcomer” to environmental related businesses. This tool is not designed for established businesses in the environmental arena; but rather a tool for beginning a small to medium size scrap tire business. This tool can also assist local governments in evaluating concepts for scrap tire businesses. The “considerations” contained herein provide general guidance to the entrepreneur in the decision making process. The specifics of any given situation may vary; in all cases sound business practices should be applied. The information provided also includes some industry “rules of thumb”; general business practices that have been proven to be useful, but not scientifically proven. Once again, these “rules” are provided for guidance purposes.
As a starting point, it must be recognized that the scrap tire business is just that: a business. While providing a service for scrap tires may be good for the environment and/or may be gratifying for other reasons, it must still be considered as a business.
QUICK U.S. SCRAP TIRE FACTS
Number of scrap tires generated annually (): 289 million
Scrap tires as a percentage of total solid waste generated: (): 1.8%
Number of scrap tires in stockpiles (): 240 million
Number of scrap tires going to a end use market (): 246 million
Number of scrap tire processing facilities (): 498
Number of scrap tires used as tire-derived fuel (): 125 million
Number of facilities using tire-derived fuel (): 85
As with any business venture initial research will be required. The level of effort in conducting research will depend on current knowledge regarding environmental related businesses. First start with developing an understanding of the local scrap tire market. Let’s begin the process with a quick discussion of research items needed to begin the initial considerations.
Research
How much do you know about current scrap tire recycling/ processing in your region? Who (what business/company) handles tire recycling in the local community? Do you propose to handle all aspects of the scrap tire business to include collection, transportation and processing of scrap tires? How will the scrap tires be obtained? It is very likely that an existing business is currently responsible for processing scrap tires. Will the proposed business compete against established businesses? How much do you know about the “competition”? For example:
“Raw” Material
Obviously a scrap tire business will require scrap tires as feedstock. Where will the scrap tires come from? How much raw material (how many tires) is needed to be efficient? How many tires are needed to be profitable? How large of an area will have to be served to obtain the needed number of tires? Will the proposed business process all types of tires (passenger, truck, tractor, industrial)? If not, how will the flow of tires be segregated? What will happen to the tires that are not processed? Is there any other type of “competition” in the target market area? In other words, can tires be landfilled locally? What are the regulations/markets like in bordering states (countries)?
Tire Composition
Here is a quick summary of the major classes of materials used in the tire manufacturing process by the percentage of the total weight of the finished tire that each material class represents in a passenger tire: natural rubber 14 percent, synthetic rubber 27 percent, carbon black 28 percent, steel 15 percent, miscellaneous (fabric, fillers, accelerators, antiozonants) 17 percent: In a truck tire the breakdown is: natural rubber 27%, synthetic rubber 14%, carbon black 28 percent, steel 15 percent, miscellaneous (fabric, fillers, accelerators, antiozonants) 16 percent.
Market Analysis
Tire Derived Fuel
Scrap tires (whole and shredded) have been used as a fuel source by industries in many countries around the world including the U.S. This fuel is commonly referred to as tire derived fuel (TDF). Are any of the following industries located near the potential target market area?
Asphalt Rubber
Scrap tires can be processed into ground rubber to modify asphalt thereby creating rubberized asphalt and rubber asphalt concrete. What pavement types are currently utilized in the local target market area? What are the anticipated future pavement trends (asphalt vs. concrete)? Are there opportunities in the unpaved road market? There may be opportunities for introducing alternative pavements to the local/regional transportation agencies.
Civil Engineering Applications
There are numerous civil engineering applications for scrap tires. Depending on the application, scrap tires could be shredded, chipped, cut or modified for specific uses. Scrap tires can be used as drainage media and/or daily waste covers replacing gravel or used in lieu of soil.
Homework!!
Be sure to consult local regulations regarding materials accepted in landfill operations. Conduct the required research or homework regarding landfill applications utilizing scrap tires in order to develop an understanding of how a landfill works and related operational concepts such as: daily cover, leachate collection systems, gas venting backfill, closure material and operational liners. In addition, you may want to consider researching other civil engineering applications such as septic field drainage medium, road embankment fill (light weight backfill) and tire bales (i.e. agricultural uses and slope restoration).
Once the initial research of the local scrap tire market is complete the next step is to look at physical considerations related to the proposed location for a scrap tire business. A key consideration will be the exact location of the facility. Will it be located within proximity to the source(s) of scrap tires or closer to the end-users (market)?
Transportation
Transportation is a key element in establishing a scrap tire business. Developing transportation options is key to planning a business strategy. Some transportation options to consider will include:
Land Use Planning
Land use planning issues are also critical. For example, the following issues will need to be examined:
Some of the issues identified above are a combination of land use and local/state health, safety and environmental codes. The point is that land use considerations are critical in planning any business strategy.
QUICK U.S. SCRAP TIRE FACTS
Percentage of scrap tires that are from passenger cars: 84
Percentage of scrap tires that are from light and heavy trucks: 15
Percentage of heavy equipment, aircraft and off-road tires: 1
Range of weight of truck tires: 40 pounds to 10,000 pounds
Equipment
The type of tire processing “system” or equipment that you will need to obtain (purchase/lease) will be a function of the scrap tire product you will be marketing. Will you purchase the necessary processing equipment in phases or purchase the entire processing system all at once. How often will the equipment require servicing? Will the proposed business utilize used or new equipment? If used equipment, will it meet your needs? What will be the replacement costs or repair costs associated with the used equipment? A determination will need to be made on the reliability of the processing system. Who will design the system? Do they have experience with scrap tire processing?
Quality Control
In order to ensure the reliability and delivery of a quality product to the end user market, the processed material will require careful monitoring to maintain quality control. For example, if the client requests “two-inch wire-free tire shreds” and receives mixed size tire shreds that are not completely wire-free, this becomes a quality control issue and could jeopardize the business arrangement for delivery of a specific product.
Supply
It is critical to estimate the available supply of feedstock (scrap tires). How many tires are generated within a 150-mile radius of the proposed facility? If there are no existing scrap tire businesses in the local community consider using a maximum capture rate of 80 percent for planning purposes. Is there a constant availability of tires in the target market area or is the availability of tires seasonal? If so, how will this impact the processing/production schedule?
Processing Cost Factors
Other Processing Factors
Processing efficiency will come only with time and experience. For planning purposes, one cannot assume that an operation will be operating at 100 percent capacity in the first six months, or even in the first year. Projections, costs and income should be adjusted accordingly. Specific processing costs are discussed in Section 7.
Why a 150-mile radius limit?
A rule of thumb for the maximum distance for a tire collection route is 150 miles. Why a 150-mile radius limit? One of the largest single costs in the scrap tire industry is the cost of transporting tires. An industry rule of thumb for trucking costs is $1 per mile. This cost will be incurred whether there are 100 or tires loaded on a truck. Also keep in mind that this cost is applied to the entire trip. If one were to travel 150 miles and collect tires at $0.75 per tire the revenue stream would be:
150 miles x 2 (1 roundtrip) = 300 x $1 per mile = $ 300 transportation costs (-)
tires x $0.75 per tire collection fee = $ 900 collection revenue (+)
If those tires are processed upon return to the facility and an industry average cost of $0.50 per tire for handling/processing is applied, this would result in a “break-even” situation for the tires collected/processed ( tires x $.50 per tire processing cost = $600 processing cost [-]). If the travel distance increases to 200 miles, then the cash flow would be negative for that load of tires. In this scenario, the revenue becomes positive when the scrap tire-derived product is sold into the marketplace.
In order to be profitable in this aspect of the scrap tire business, either of the cost factors (transportation or processing) must be lowered or the revenue (tip fee) must be increased. Consequently, the 150-mile radius becomes the break-even point for planning purposes.
Steel Tire Wire
There are approximately 2.5 pounds of steel belt and bead wire in a passenger car tire. This material is made from high carbon steel with a nominal tensile strength of 2,750 MN/m2. The typical composition for steel belts and bead wire includes: carbon, manganese, silicon, phosphorus, sulfur and traces of copper, chromium and nickel. Wire coating is typically a mix of copper and zinc or a mix of brass and tin.
A scrap tire business will come under the purview of environmental regulation and, depending on the market area, could include a series of regulations from local, state and/or federal agencies. How many permits will be required? In some cases a formal permit will be required in other cases only a registration may be necessary, for example, in Texas a scrap tire recycling facility requires a permit while a scrap tire transporter only requires a registration. Depending on the market, permits and/or registrations may be required for the following:
The permit application must include a clear description of how the scrap tires will be collected and recycled. In general, a permit will not be issued unless the applicant can provide sufficient documentation that demonstrates that at least 75 percent of the tires collected or received can be processed through the proposed scrap tire operation. A permit for a processing facility may require a plan certified by an engineer. There are other permit-related issues to consider such as the length of time to get permits as well as the possibility of obtaining several permits simultaneously (multi-tracking).
Bonding/Financial Assurance Requirements
Many states require registered scrap tire facilities to post financial assurance if the facility plans to transport, process and/or store scrap tires. The California Integrated Waste Management Board for example requires a $10,000 surety bond as part of the state registration to engage in transportation of waste tires. The Texas Commission on Environmental Quality requires, as part of state registration for a scrap tire facility, the preparation of a closure cost estimate, certified by a professional engineer, detailing the cost of hiring a third party to close the facility. This certified closure cost estimate includes transportation and disposal costs of scrap tires based on the maximum site capacity of the registered facility’s site layout plan. In addition, the estimate includes a minimum of $3,000 for site clean up costs. The reason for the financial assurance is to provide the state regulatory agencies the financial resources for tire disposal and related clean up of tires at a scrap tire facility in the event the scrap tire company goes out of business.
Events that trigger “red flags” (warning signs) to regulators:
Tire Fire Findings
At a recent Tire Derived Fuel workshop, EPA Region 6 presented a list of similarities in tire fire investigations:
Tire Fires
Tire fires are difficult to extinguish and can burn for days and even months. A tire fire is classified as a hazardous materials incident. Public health and environmental issues related to tire fires include air pollution, soil and water contamination, and heavy metal releases. It is important to coordinate with local, state and federal agencies in developing a fire plan. Recommended tire fire response tactics include:
Now that the initial research and market analysis is complete, it is time to consider issues related to business planning. Here are some business planning issues for consideration:
Employees
A key component to the success or failure of a business is your approach to your team of employees, including training, employee retention and experience. Who will serve as the key (most critical) employees? Will there be an on-site maintenance crew? Finally, background (criminal) investigations will be critical as you develop the team of employees.
Suggested Business Approach:
You may want to consider starting out by providing basic services, then adding on additional services. You may also want to consider developing simpler, easier markets in the initial stages of your company. Tire derived fuel (TDF) and civil engineering applications are typically easier to get up and running than ground rubber operations. Rule of thumb for start up cost is $2 of capital expense for each tire to be processed; i.e., for a facility that can process 2 million scrap tires a year expect to spend $4 million. Furthermore, the equipment used for handling/shredding tires into TDF and civil engineering application material will be the same equipment that can prepare the tire to be processed into ground rubber.
What are the most viable markets in the local geographic area? Which markets can be developed quickly? (Typically, it is tire-derived fuel and civil engineering). Does the local/state/federal government have a grant program for market development? A critical element in examining potential markets is determining the obstacles to these markets? Below is a quick view of possible obstacles (by market) for consideration.
Obstacles to Tire Derived Fuel
Fuel Types/Supply
What other supplemental fuels are currently used in the target market? What type of fuels is the target industry currently using? If pulverized coal is the dominant fuel then TDF may not be a good fit. How many tires are available in the local market area? For example in the case of TDF, the target client may require one to three million scrap tires per year. Will the proposed business be capable of providing this amount of tires to the target client?
Acceptance of TDF
Who will be the sole responsible party for convincing management (end user) to begin using TDF? If so, how much is the target client paying for their main fuel supply? TDF will always have to be lower. Is the facility being paid to take any materials for fuel? If so, TDF typically cannot compete. Will the target client have to make substantial modifications to their existing operations to incorporate TDF? If so, who will pay for this modification (industry, government subsidy)? The acceptance of TDF can be a function of the feeding/monitoring system required. Most facilities do not have capital expenses calculated into their budget. Waiting for this expense to be budgeted can take two years. How long will it take for you and the target industry to obtain permits?
Opposition to TDF
Will opposition come from public concerns or competition? Is the facility in a nonattainment area for any regulated air pollutants? If so, what are the main emission criteria considerations? Compare those to the benefits of TDF, which has been found to lower nitrogen oxides.
Obstacles to Rubber Modified Asphalt
Is there a mix of roadway pavements in target market area (construction material, road surface material/style)? Have you determined the receptivity of the local department of transportation, public works departments and contractors for utilizing alternative pavements? The history of alternative pavements in the target market, the region and state will be a critical issue. The time lag between the initial contact with a potential user and sale of a pavement product could be as long as three to four years.
What about the supply of quality ground rubber? Can you provide this material? What other types of modifiers are the local roadway contractors using? What about the cost competitiveness of ground rubber versus other modifiers? Remember, quality and consistency of the ground rubber will be of paramount importance.
Obstacles to Civil Engineering Applications
Check with local regulations to determine the classification of a processed tire. Is it considered a solid waste or a beneficial use commodity? Do the present rules make it conducive for a smooth entry into the market? Have you determined the receptivity of the local departments of solid waste, water quality and health to the proposed civil engineering applications? What about state agencies? Have these applications been tested in the local target market area? If used previously, what were the results?
Standard Practice for the Use of Scrap Tires in Civil Engineering Applications:
This American Society for Testing and Materials (ASTM) publication provides guidance for testing the physical properties and data for assessment of the leachate generation potential of processed or whole scrap tires in lieu of conventional civil engineering materials, such as stone, gravel, soil, sand or other fill materials. In addition, typical construction practices are outlined. This ASTM document (D--98) is available from the Rubber Manufacturers Association please see https://www.ustires.org/
Listed below are several cost factors unique to the scrap tire industry.
Tire Handling/Collection Costs
On average, it costs $0.05 every time a tire is handled. The $0.05 is an industry standard and may vary, but can be used as a guideline. The factors that make up this cost include, but are not limited to: labor, energy (fuel for the equipment) and time. Table 1 shows estimates for cost factors related to “collection” costs that include handling (labor), transportation, disposal, processing and profit. Please note that these costs vary greatly; nonetheless the numbers provided herein are conservative and could be helpful in developing projected costs.
Utilizing the costs in Table 1 provides a guide in estimating costs for scrap tire collection and thus a general rule for these costs is $1.00 per tire. Keep in mind that the scrap tires must still be processed. Another rule of thumb in the tire industry is converting tires to tons. The tire industry recognizes a scrap tire unit with an average weight of 20 pounds. Thus 100 tires multiplied by 20 pounds are equivalent to 1 ton of tires.
Processing Cost
Processing costs are typically calculated on a per-tire basis. A general rule of thumb is the greater number of tires processed on a time-unit basis (hourly), the lower the unit cost. Another general rule of thumb is that the lower per-unit costs are obtained when processing two million tires a year. Table 2 includes general costs associated with processing the scrap tire to create selected scrap tire “products.”
Tire Processing Equipment, Tools and Nomenclature
Initial Reduction Technology: shredders and hammer mills
Secondary Reduction Technology: shredders, hammer mills, granulators, cracker mills
Ground Rubber Reduction Systems: cryogenics, granulators, cracker mills
Fiber Separation Systems: shaker tables; pneumatic systems
https://cmshredders.com/tire-equipment/
Tire Shred Characteristics
Specific gravity of tires: 1.02–1.27
Water absorption rate of tire shreds: 2–4 percent
Density/loosely dumped shreds: 21–31 lbs/cubic foot
Density of compacted shreds: 38– 43 lbs/cubic foot
Hydraulic Conductivity: 0.6–24 cm/s
Budget
Traditional costs will also need to be included in the proposed budget. Consider the following itemized cost factors in development of a budget.
Previous and failed attempts of entering the scrap tire business by other companies can make the proposed business endeavor more difficult. Be aware of the history of the scrap tire industry. This information can be used to develop the proposed business strategy and assist in formulating broad based support. Here are a few considerations:
Public Concerns
Local residents will have concerns about any industrial business locating in the
community. Some key concerns include:
Mosquito Control
Mosquitoes can breed in a wide range of habitats; everything from cemetery urns to beer bottles to wheelbarrows to tree holes. Hardy mosquitoes can withstand freezing temperatures and prefer stockpiled tires as a favorite breeding habitat. Mosquitoes tend to concentrate in the upper portions and in the outer fringes of tire piles, since this is typically where the most recent rainwater has collected. Mosquitoes do not typically like bright, sunny environments and will typically hover at ground level, seeking shaded areas. The most effective way to control mosquitoes is to find and eliminate their breeding sites. Defense strategies against mosquito infestation include:
The source of funds to finance start up costs will dictate the level of pre-planning necessary to begin the scrap tire business. Regardless of the funding source, development of a business plan is recommended.
“Guaranteed” funds
Whether the source of funds is from personal wealth, a “loan” from family/friends or even private investors (angels), it is recommended that you develop a sound business plan to serve as a guide.
Bank loans/small business loans
The process for obtaining a formal bank loan will require the development of a detailed business plan. The business plan should demonstrate the business viability/feasibility and ensure that the project is “bankable.” However, the difference from traditional businesses and a scrap tire business is significant, the clients from the supply and the demand side are unique. Keep in mind that there is a finite number of tires and a smaller number end users.
Economic development/commercial development programs
This type of funding could include tax abatements, industrial development bonds, economic development grants and environmental start up grants to assist in funding a portion of the financing needs for the proposed business. This type of funding program will also require the development of a sound business plan.
What You – The Buyer – Needs to Know!
This is what you need to know about the business you want to buy. Don’t be shy. Ask questions about such things as:
Preparation of a Business Plan:
The basic purpose of a business plan is to demonstrate to potential investors and regulatory agencies the fundamental idea, approach and management scenario that will be incorporated into a business strategy.
Many of the factors to consider in the planning process should be included in the business plan. Suggested items to discuss in the business plan:
Suggested items to leave out of the business plan:
Investors and regulatory agencies will check your statements, allegations, and assumptions. If you overstate any portion of the situation or describe an overly optimistic business situation you risk losing credibility.
A Business Plan
Developing a business plan will force you to think through some important issues that you may not otherwise consider. Your plan will become a valuable tool as you set out to raise money for your business, and it will provide milestones to gauge your success.
According to the U.S. Small Business Administration a business plan precisely defines your business, identifies your goals, and serves as your firm’s resume. Basic components include:
The business plan helps you allocate resources properly, handle unforeseen complications, and make good business decisions. Because it provides specific and organized information about your company and how you will repay borrowed money, a good business plan is a crucial part of any loan application. The business plan additionally informs sales personnel, suppliers, and others about your operations and goals. The importance of a comprehensive, thoughtful business plan cannot be overemphasized.
Other Market Opportunities
Punched/stamped rubber products: Examples: door mats, bucket protectors, wheel shocks, lobster boxes, floor mating. Machines are available to cut tires into strips which can then be fastened together to make the above referenced products. These machines cost about $15,000 – $18,000 each. The systems are relatively labor intensive. This application lends itself to an area of abundant, relatively low-cost labor.
De-beading tires: The removal of a tire’s sidewall portion can generate tire “rings” that can be used as an anchoring device for traffic cones or traffic barrels. Truck tire sidewalls are appropriately sized for traffic barrels while passenger car and light truck sidewalls can be appropriately sized for traffic cones. Typically passenger and light truck tire sidewalls are doubled up, which gives the amount of weight that can adequately hold the cone in place. Tire de-beading is typically a slow and labor-intensive process.
Other Market Considerations
While state regulatory officials may consider scrap tires an environmental issue, no one is likely to pay a premium for products that are derived from scrap tires. In fact, there is an unfortunate disbelief that anything that contains a recycled content is inferior to a product made from all virgin materials. There are approximately 100 new products that contain recycled tire rubber. The fastest growing new markets include playground covers, soil amendments and floor mats.
While premiums are unlikely, the vendor of scrap tire derived material must be aware of their costs and sell their products at a fair-market value. This is often easier said than done, for there are many new entrants into the scrap tire industry that have taken a marketing strategy of market penetration (sales) at a reduced price from the (current) market price. The result of under-pricing scrap tire material can be devastating for all involved: the new entrant finds that selling below fair market value results in a negative cash flow that often results in the demise of that company (within 6 months, perhaps). While the new entrant may be out of business, all other companies will feel the long-term impacts of under-pricing in the business. At present, the demand for scrap tire products is inelastic: this means that the demand for these materials will not generally go up when the price is reduced, and the demand will likely decrease if prices are forced upward.
Best ways to reduce the generation rate of scrap tires:
Purchase longer-tread life tires (60,000 – 80,000 mile tires)
Rotate and balance tires every 4,000 miles
Check for/inflate tires to recommended air pressure levels (biweekly)
Make sure front end of the vehicle is aligned properly
Make sure the suspension system functions properly (shocks/struts)
Be aware of driving techniques (avoid quick starts and hard breaking)
Where can I learn more about scrap tires?
https://www.ustires.org/
www.scraptirenews.com
https://archive.epa.gov/epawaste/conserve/materials/tires/web/html/basic.html
www.calrecycle.ca.gov/Tires/
www.rubberpavements.org (for information on asphalt rubber)
www.mosquito.org
This document was prepared by:
K Street, NW • Washington, DC • (202) 682- • fax (202) 682- • www.ustires.org
For more Small Cable Granulatorinformation, please contact us. We will provide professional answers.