Following my recent reports on bungled used-oil and electronics waste stewardship programs I must, regretfully, inform readers of Ontario’s flawed scrap tire proposal.
In response to a request from Ontario’s Environment Minister Leona Dombrowsky, tire industry reps established Ontario Tire Stewardship (OTS) to devise a stewardship plan for scrap tires. OTS recently submitted its plan to the Waste Diversion Organization (WDO) and the minister, calling for motorists to pay a four-dollar fee when they buy a tire, the money going to incentives for recycling, re-using or burning of old tires.
As background, Ontario repealed its hated $5 tire disposal tax (that simply flowed into general revenues) in the mid-1990s. Today, most retailers charge a small disposal fee of $3 to $5 per tire, but the process is not regulated and (the OTS says) there is no certainty as to where tires are disposed.
The OTS plan aims to keep out of garbage dumps the estimated 13.6 million tires that Ontarians discard annually, and clean up the 5 to 6 million old tires stockpiled around the province.
So, what’s the problem?
First, the OTS plan may encourage more burning of tires in cement kilns and industrial boilers that may or may not have adequate pollution controls. This is contrary to the Waste Diversion Act and makes environmentalists angry.
Second, retailers (not brand owner or first importer) act as stewards. In the past, retailers (also used-tire generators) could choose whether to charge consumers a tire disposal fee, “eat” the costs of scrap-tire management themselves (in order to offer lower prices to consumers) or get tire manufacturers to eat part of the scrap-tire management costs (by quoting lower wholesale prices for tires). In the OTS plan, all tire retailers will incorporate the fee into the retail price. This reduces price competition and is not, of course, true extended producer responsibility — a fact which has outraged EPR proponents.
But for me, the worst indictment of the OTS plan comes from the Ontario Tire Collectors Association (OTCA) in a letter it wrote on September 14, 2004 to Minister Dombrowsky. (See Posted Documents at www.solidwastemag.com). Once again a central-planning model is proposed that will squelch a thriving and surprisingly efficient free market for a waste commodity.
According to the OTCA, since the famous Hagersville tire fire of the 1990s the private sector has effectively handled in excess of 95 per cent of scrap tires. Out of 13.6 million annual tire generation only, only one million (7.4 per cent) are being stockpiled or landfilled, and 800,000 sent to “non-verifiable” diversion.
It comes as a surprise that most stockpiles are being cleaned up without taxpayers’ money. Because of ministry enforcement, landowners are cleaning up the messes whether they made them or not. In the past two years, three significant stockpiles have been remediated: Brampton (350,000 to 500,000 tires), Villa Nova (75,000 to 95,000 tires), and Uxbridge (20,000 to 25,000 tires).
Despite this decent performance, OTCA concedes that a targeted solution is needed for the tires slipping through. The root problem with the OTS plan, the OTCA says, is its use of fixed pricing. All tire generators are not situated 30 minutes from processing facilities and they don’t always have the types of scrap tires that those facilities can process. Processors do not accept both passenger and truck tires, and few will accept dirty tires.
The OTCA says that straight economics will cause tires to stop being collected in many areas of the province under the OTS plan. Profit margins in the collection industry are low and the business is highly seasonal. Current collection fees reflect a complex matrix based on generator location, tire type, salvage rate, etc. And the collection market is highly competitive with many companies actively chasing business and negotiating prices.
That the OTS plan treats all tire generators the same sounds noble, but in reality collectors will avoid generators that don’t have a decent salvage rate. “It simply will not be worth it to pick up tires at a loss,” the OTCA says. And this scenario only covers generators in Southern Ontario who are within an hour of a processor who will accept the tires.
Currently, the approximate cost for collection and recycling of tires in Ontario is $1.60 per passenger or light truck tire, with a 94 to 97 per cent diversion rate. Instead, the OTS plan would increase those costs to $4 per tire with a diversion rate of only 85 per cent! And eight to 16 per cent of scrap tire generators will get a free ride, whereas currently the overwhelming majority (99.99 per cent) pay to have their tires collected.
The problems with scrap-tire management in Ontario are neither in collection nor processing capacity, but instead in illegal dumping, lack of enforcement with appropriate penalties, Off-The-Road tires, and domestic markets for the recycled rubber.
A targeted plan should address those issues, and not impose a “one size fits all” solution. The OTS plan, one might say, is in need of a retread.