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Wheeling and dealing: states approach scrap tire management and end market development in a number of ways.

Many states have established fees and programs to manage scrap tire generation and to abate stockpiles within their borders. While the fees are generally levied on the sale of new tires, the percentage of the fee that is allocated to scrap tire management programs can vary. Additionally, states use their collected funds in different ways, with some choosing to subsidize end markets, others choosing to provide grants and still others focusing on offering technical assistance.

In recent years, scrap tire management has been less of an issue for state governments, largely because state legislators believe illegal tire piles and the threats they pose are a thing of the past. In some cases, this has led to the diversion of funds derived from the sale of new tires to other areas that are deemed more pressing.

NOT WHAT IT USED TO BE. "The scrap tire problem is not what it used to be," Michael Blumenthal, senior technical director of the Rubber Manufacturers Association, Washington, says. "Legislators believe the problem has been solved," he says, because abatement efforts have been largely successful. However, Blumenthal finds this to be a short-term view. "You need constant management and enforcement or your'e going to have the same problems, eventually."

While he says no state has discounted the fees it charges on new tire sales, he says some states are increasing their fees and diverting a portion into other waste management areas or into their general funds. Blumenthal finds this "troubling."

By way of example, he cites Alaska, which he says put a $2.50 fee on new tire sales, all of which goes into the state's general fund.

In states where the fees on new tires are still going, at least in part, toward scrap tire management, Blumenthal says successful programs need to cover three key areas: abatement, market development and enforcement.

NEED FOR FUNDING. Fees on new tire sales can help to fund a state's regulatory program and should be retained even if markets are well established in the area, Blumenthal says. "Even when a market has been created and can consume all the tires, we are now saying a fee is still necessary," though he suggests that states that have successfully abated former stockpiles might consider reducing their fees on new tires.

Blumenthal cautions that end markets for scrap tires can shift, adding that manufacturers of high-end products made from crumb rubber are going offshore. "Markets can go away over night. The loss is sudden and profound."

Therefore, the best long-term approach, Blumenthal says, is not to concentrate on a single market for the scrap tires generated in a state, but to cultivate a variety of markets. "You need ongoing market development projects."

States take a variety of approaches when it comes to scrap tire management and market development programs. Below, Recycling Today highlights three states that have effectively managed their scrap tire programs in slightly different ways: Virginia, South Carolina and Florida.

SUBSIDIZING MARKETS. Virginia has been charging a 50-cent fee on each new tire sold in the state since 1989. The fee was increased to $1 in 2003 in response to a tire fire in the state and will go back down to 50 cents in July 2006.

During the program's 15 years, $40 million has been collected, with only $1 million having been diverted from scrap tire management programs, Allan Lassiter, manager of waste tire and recycling programs for the Virginia Department of Environmental Quality (DEQ), says.

The Virginia Department of Taxation collects the fee, which it deposits into a trust fund that the DEQ controls. Payments of $22.50 per ton are made to end users of the scrap tires on a monthly or quarterly basis using a manifest system. Lassiter performs yearly audits of the scrap tire consumers, reviewing manifests to be certain everything adds up.

The Rubber Manufacturers Association has criticized the Virginia program because it subsidizes end markets. Lassiter readily admits that this is the case, but he says grants are also a type of subsidy.

Lassiter says his department has no intention of stopping its reimbursement program. "Industry counts on it. It will be there as long as the market needs it. It would be phased out over a period of years if we have to get rid of it," he says, adding that this will give consumers of the material time to adjust to the new market dynamics.

He suggests that states considering this approach view it as a long-term system. "You really should stick with it for at least 10 years to give the market some thing to count on." he says.

According to Lassiter's figures, Virginia beneficially uses 100 percent of the scrap tires it generates yearly, with 74 percent of the tires going to civil engineering applications. He also says Virginia has efficient processing capacity for scrap tires generated within the state.

Virginia also demands financial assurance of $1 per tire to protect against abandoned sites. Lassiter says this helps to provide the state with the financial means for cleaning up a site should the owner walk away.

Florida's scrap tire management program also uses financial assurances to protect against delinquent operators, but the state shies away from market subsidies, preferring to offer technical assistance to possible end users.

TECHNICAL ASSISTANCE. Florida's scrap tire management program began in 1988 with the passage of the Florida Solid Waste Management Act. A $1 fee is collected on the sale of new tires and new automobiles. Jan Clark, an environmental manager with the Florida Department of Environmental Protection (DEP) and manager of the department's waste tire subsection, says the fee is collected within the structure of the sales tax collection program by the Department of Revenue. Twenty cents on each dollar goes to the state's waste tire trust fund, while 80 cents goes to other waste management activities, she says.

According to "Waste Tires in Florida: State of the State," dated June 15, 2005, 16.4 million, or 84 percent, of the 19.5 million scrap tires generated in Florida were beneficially used.

In 2004, Florida used an estimated 4.35 million scrap tires in crumb rubber applications, which is nearly 22 percent of the state's total generation. Crumb rubber applications in the state include asphalt modification, playground/sports surfacing, soil modification/cover and molded products.

The majority of tires generated in Florida are used to generate energy, with nearly 5.2 million passenger tire equivalents (PTEs) being used within the state for industrial tire- derived fuel (TDF) applications in 2004 and another 3.3 million PTEs going out of state for TDF applications. In-state waste-to-energy use absorbed 760,000 tires, according to "Waste Tires in Florida."

The state uses these funds to finance program personnel, abatement activity, grants to local governments and to support tire collection programs.

"In the past couple of years, we have begun to reach out to develop markets," she says. "We have very diverse uses of tires in Florida, probably more diverse than any other state I can think of."

As part of its market development strategy, the Florida DEP began identifying market sectors in need of additional attention, including crumb rubber use in molded products and TDF use in paper mills and in power plants. Clark's staff is working with a power plant and a recycled paper mill in Jacksonville, Fla., that would like to use TDF in their fuel mixes. However, she says that they have had less success with molded products because of Florida's lack of manufacturing.

Clark says she thinks Florida's scrap tire management program has been successful because it allows markets to develop on their own. "We take a really conservative approach to market development." She says the DEP focuses on providing technical assistance to interested parties, such as information about TDF fuel mixes, potential emission issues and ash issues in the case of TDF markets. "We're putting potential markets together with companies that can provide them with feed systems for test burns," she adds.

South Carolina is also actively looking into higher end-use applications for scrap tires in the state.

FUNDING RESEARCH. "I consider our program to be a success in that we have been able to abate the existing stockpiles, encourage local collection systems and promote higher end uses for scrap tires through our funding of the Clemson University Asphalt Rubber Technology Service (ARTS)," Jana White of the South Carolina Department of Health and Environmental Control Office of Solid Waste Reduction and Recycling Grants, Planning and Trust Fund Administration, says. ARTS conducts a number of demonstration projects for various scrap tire applications, including the use of rubber-modified hot mix asphalt, pour-in-place recycled-rubber surfacing and crumb rubber turf grass topdressing applications.

South Carolina charges $2 per tire, White says. "The fee is split, with 50 cents going to the state, $1.06 going to the retailer (provided they recycle the old tires), and 44 cents going to the county for their waste management tire activities." If the retailers do not recycle the old tires, they can send them for free to the county drop-off for recycling, but their payments will be reduced by $1 per tire, which then goes to the county.

South Carolina manages roughly 5 million tires per year and collects from $1.8 to $2 million each year in tire fees. "We did have two years in which the unexpected balance of the tire funds were moved to the general fund for other uses," White says.

Most of the state's tires go to processors in North Carolina, South Carolina and Georgia. "There seems to be ample markets for South Carolina tires, including two large processors in North Carolina that make septic chips, TDF and civil engineering products. We have one end user of whole tires for TDF," White says, adding that most processors are making TDF or septic chips. "We expect to have another large whole tire TDF user come on board soon in the state."

Despite these markets, White says the fee is needed. "I believe the advanced recycling fee on tires has been a successful program and should remain in place for the foreseeable future."

The author is managing editor of Recycling Today and can be contacted at
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Title Annotation:COMMODITY FOCUS
Author:Toto, Deanne
Publication:Recycling Today
Geographic Code:1U5VA
Date:Oct 1, 2005
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