On September 1, 2009 Canada’s largest and much anticipated Used Tires Stewardship Program was launched. The program was developed (and will be implemented and managed by) Ontario Tire Stewardship (OTS) – an Industry-Funded Organization convened by Waste Diversion Ontario in response to a Program Request Letter issued by Ontario’s Minister of the Environment John Gerretsen.
The program goals are:
• Divert 90 per cent of Ontario’s on-road, and 50 per cent of the off-road, tires to value-added recycling by the end of 2012;
• Eliminate illegal dumping of tires and clean up existing stockpiles;
• Develop Ontario scrap tire processing capacity to manage 100 per cent of the province’s scrap tires; and
• Build markets in Ontario to use the tire-derived products (TDPs) made from the scrap tires.
The launch of this program thrusts Ontario into the forefront of used tire stewardship with a program that commits to delivering short-, medium-, and long-term environmental and economic benefits.
“But wait,” the sharp-eyed tire user might say. “Hasn’t Ontario had a tire program for years? What about the tire tax I pay when I get rid of my old tires?”
In reality the management of scrap tires in Ontario has been a strictly free-market enterprise since the repeal of the Ontario Tire Tax by the Government in 1993. In that free-market system, the consumer paid the tire retailer/garage/municipal depot to take the scrap tires, the tire retailer/garage/municipal depot paid a hauler to take the tires away, and the tire hauler paid a processor/power plant/cement factory to take the tires. There was a built-in motivator to get rid of tires at the lowest possible cost, and this led to approximately 50 per cent on Ontario’s tires being shipped to the US to be used as fuel.
While this approach did drive high collection rates, and provided the majority of Ontarians access to locations that would take their old tires, policymakers sought a system that would see scrap tires preferentially diverted to recycling applications and away from use as a fuel (or landfill disposal). This was the impetus for the designation of used tires in a stewardship program.
According to Andrew Horsman, Executive Director of OTS, “This program is funded by a Tire Stewardship Fee (TSF) paid by the “steward” (brand-owners and first importers into Ontario) to OTS. The old financial model of scrap tire management is thrown out, and replaced by an incentive-based approach whereby the payment for the collection, transportation, and processing of scrap tires is contingent on proof that the tires have moved through the chain to the next approved point as determined by OTS.
“This eliminates any incentive to deliver tires for use as fuel, or to illegally dump them, as these are not OTS-approved end uses and the transporter delivering the tires will not be paid any incentive.”
Strategically the OTS approach can be broken down into three components, essentially short, medium, and long-term objectives, which could extend far beyond the timeline for the current approved plan:
1. Short term: Ensure Ontario’s scrap tires are only going to approved end-uses;
2. Medium term: Work with the existing Ontario scrap-tire management industry to manage 100 per cent of Ontario’s scrap tires within the province;
3. Long term: Build markets in Ontario to use the TDPs made from Ontario’s scrap tires.
While these objectives mirror the elements of the minister’s program request letter, they also reflect the business planning approach of OTS: only by creating sustainable infrastructure and demand for TDPs will the costs of, and need for, a full-blown stewardship program for used tires ever be eliminated. In a way, OTS and its stewards are working toward the end of the program. The ultimate vision is one of a stronger green economy that uses scrap tires as a raw material to be sourced as opposed to a waste to be managed.
Ensuring approved end-uses
The issue in Ontario with scrap tires was not fundamentally the problem of stockpiles or the difficulty in finding places for them to go; it was their end use. Approximately 50 per cent of the 10 million scrap tires generated each year were being used as fuel in cement kilns and power plants in the U.S. While some may debate the merits of this use, the end result was that this 50 per cent was not being “diverted” from disposal in terms of the ministry’s definition.
More importantly, the wide-spread use of this low-cost option meant that Ontario processors making TDPs did not have access to the supply of tires necessary to sustain and grow their businesses. While the existing industry provided an excellent base, it could only handle about 60 per cent of Ontario’s tires even if fully supplied.
OTS has moved quickly to rectify this.
The introduction of a tracking system has virtually eliminated illegal dumping, and has allowed OTS to develop a fuller picture of the current market dynamics. This information will be leveraged to improve the program as it moves forward.
The need to preserve the out-of-province processing option was recognized immediately, due to the current shortfall in Ontario-based processing capacity. OTS addressed this issue by issuing a Request for Proposals (RFP) for processing capacity outside of Ontario, and executed contracts with the respondents based on a number of factors, including their ability to demonstrate compliance with the diversion hierarchy required by OTS (i.e., no burning or landfill).
The results to date have been excellent, with OTS currently exceeding the diversion objectives of 90 per cent of on-road tires and 50 per cent of off-road (OTR) tires, based on current information regarding tires supplied into the market and reports from Ontario processors. Through 2010, OTS will be conducting compliance reviews to validate the reporting so far.
Although less than a year old, the Used Tires Stewardship Program has already achieved its short-term goal by introducing a province-wide tracking system for used tires, registering the collectors, haulers and processors operating in the province, designating approved end uses, and establishing an “Ontario-first” policy (whereby OTS commits to work with registered haulers to supply Ontario processors before sending them out of province).
Growing local capacity
While pre-program consultations with Ontario processors indicated a potential surplus of tires of between three and four million, the launch of the program has driven some predictable, but nevertheless welcome, activity. Three existing Ontario processors are investing in capacity and technology upgrades that are expected to add 20,000 to 30,000 tonnes of increased capacity. As well, a number of out-of-province processors are making investments in Ontario that are expected to add 50,000 to 65,000 tonnes of incremental annual capacity for on-road and off-road tire processing. OTS registered its first new Ontario tire processor in December 2009. Investment in tire processing capacity in Ontario over the next 12 to 18 months is expected to exceed $20 million.
This fast-paced growth in local scrap-tire processing should eliminate the need to send tires outside of the province within 12 months from program launch. This is not only true for the on-road passenger and medium truck tires, but also for the more difficult to manage larger OTR tires. OTS is working with specialists in management of OTR tires from across Canada and with stewardship programs in other Canadian provinces to identify best practices and key learnings. While their large size and different material composition can pose a significant challenge for processors, certain companies have specialized in handling this type of tire.
Despite having launched the program only eight months ago, OTS is already looking to
the future where the main challenge will be access to sustainable, high-value markets for the recycled product manufacturers.
To this end, OTS is working with the Ontario Center for Environmental Technology Advancement (OCETA) to conduct a market assessment.
According to Kevin Jones, President of OCETA, “With OTS, we plan to look at where the markets are in North America, how large they are, what the barriers are to growing this market, and how OTS can best direct resources and efforts to help Ontario’s industry perform successfully.” (Learn more about OCETA in the forthcoming CleanTech Canada supplement in the Summer edition of HazMat Management magazine.)
As well, OTS engage directly with end-users to understand their perception of tire-derived products and how OTS can help them become greater consumers of them. Key sectors include the provincial government, municipalities, commercial building operators, and residential developers (among others).
Aliapur, the French Tire Recycling Agency, has released a report highlighting how a great reduction in things such as GHG emissions and water use can be realized through the use of recycled rubber products. This kind of information could facilitate the adoption of recycled rubber products by organizations concerned with reducing their overall environmental footprint.
Horsman sums up: “OTS just plans to keep rolling along, transforming old tires into green products.”
James Sbrolla is the Entrepreneur in Residence at MaRS and OCETA and Chairman of Environmental Business Consultants. He can be reached at email@example.com
Emterra Tire Recycling
The tire collection division services a wide range of municipal and commercial customers in eastern, central and southwestern areas of Ontario in addition to the Niagara Region and GTA. In addition to the traditional methods of handling tires the company also offers a containerized service.
The Emterra Tire Recycling plant specializes in the processing of passenger car and light truck tires, although the collection arm of the business handles all types of tires. Inbound tires are sorted by type and condition, with those not suitable for reuse funneled into the recycling process line. Following a careful inspection for contaminants, non-reusable tires are shredded and ground, producing three marketable commodities: steel, crumb rubber and tire fibre. Used tires are sold both domestically and through export.
NRT operates a tire recycling plant, located at 99 Commissioners Street in the Port District of Toronto, which can accommodate receipt of passenger and medium truck used tires from any and all trucks. Using environmentally green processes, the plant has the capacity to process over three million used tires annually, equivalent to approximately 30,000 tonnes. NRT recycles 100 per cent of used tires through proprietary processes that have the capability to convert approximately 83 per cent of the weight of a used tire into reusable raw materials. The reclaimed rubber and tire cord components are used in NRT’s manufacturing process to produce a number of different products. NRT claims to be the only company in Ontario that recovers the rubber, fibre and steel components to the highest level.
NRT also operates a manufacturing plant located in Toronto that processes recycled tire crumb (from the tire recycling plant) into commercialized value-added materials ranging from basic rubber sheets and mats to molded parts (e.g., automotive). NRT uses recycled material to make molded engineered parts, rather than garden mulch or tire derived fuel, resulting in higher and greener waste diversion.
NRT can also offer province-wide used tire haulage through its National Tomlinson division. The division is a partnership with Tomlinson Systems, an Ancaster, Ontario-based logistics service provider with a large fleet of trucks and trailers. Through National Tomlinson, NRT can offer tire collection bins or trailers that can be spotted on collection premises free of charge. The company can also clean up used tire stockpiles as required.
A longer reach for EPR in Canada
Steadily and relentlessly, despite best attempts to manage it, Canada’s solid waste flows continue to grow — from 752 kg per capita disposed in 2000 to 835 kg in 2006, according to Statistics Canada.
In a presentation to the Canadian Waste Management Forum, hosted and produced by Insight Information (in Richmond Hill, Ontario in February), Director of the Waste Reduction and Management Division for Environment Canada Carolyne Blain described Extended Producer Responsibility (EPR) as part of the solution to the growing problem of waste. She offered the 2001 OECD definition of EPR: “An environmental policy in which a producer’s responsibility, physical and/or financial, for a product is extended to the post-consumer stage of a product’s life cycle.”
Starting with a paint program in British Columbia in 1994, Blain said, various provincial, regional and national programs have covered a wide range of products including packaging, tires electronics, batteries and other materials. Drivers include growing concern about hazardous and toxic substances and waste, and a disproportionate part of the waste management burden being placed on municipalities.
Many EPR initiatives are provincial in orientation, and vary widely by which materials are managed and to what degree of completeness.
However, through Environment Canada, the federal government is increasing its involvement, largely through the Canadian Environmental Protection Act (CEPA) of 1999. CEPA Section 93 can be used to require EPR for Schedule 1 toxic substances, or products that contain toxic substances.
Ozone Depleting Substances management at the end of life were identified as a goal of the Montreal Protocol, and the federal government is working towards regulations of these substances in both stationary and mobile air conditioning and refrigeration units. Participation in a stewardship program is expected to be required of all producers, importers and distributors; exact scope of the regulation is still under consideration and is expected for publication in the Canada Gazette in 2011.
Other national commitments to EPR come through the Canadian Council of Ministers of the Environment (CCME), which established a Task Group in 2005 to identify ways to harmonize, expand and improve EPR programs in Canada. Canada-wide principles were published in 2006. In October 2009, CCME approved a nation-wide Action Plan to set timelines for implementation, provide guidance for EPR development and implementation and strengthen the use of EPR as an environmental risk-management tool.
Key challenges for the CCME initiative, according to Carolyne Blain, are:
• Availability and effectiveness of collection and processing infrastructure;
• Fees and levies: visible or invisible/internalized; fixed or variable;
• Creation of level playing fields and avoiding free riders;
• Establishing performance requirements — setting recovery rates and targets;
• Establishing environmentally sound management standards for recycling and end of life management;
• Streamlining and harmonizing regulations and program implementation;
• Program governance and accountability;
• Moving beyond recycling: stimulating toxics reduction and environmental design, promoting waste minimization and encouraging reuse and refurbishment.
Written by Carl Friesen. Principal, Global Reach Communications. Contact Carl at firstname.lastname@example.org