In 2003, of the 290 million scrap tires generated in the United States, 80% went to an end-use market. The largest single market for scrap tires was tire-derived fuel (TDF). Accordingly, a total of 129 million tires — from the 232 million tires that went to a market — were used as TDF. Of the 129 million tires that went to TDF, 53 million were consumed by the cement industry, making it the largest end user industry for scrap tires.

A series of factors contributed to such levels of tire consumption. First, since TDF has been used successfully in the cement industry since 1975, kiln management accepts this material unreservedly. Second, tires have consistent and predictable properties, so TDF performance in the kiln is well understood. Third, managers who have used TDF in one kiln will typically introduce TDF at other kilns as well.

In addition to providing consistency of performance, using TDF in cement kilns reduces the amount of coal that would otherwise be required. In fact, tires contain 1.25 times the energy content of coal (15,000 BTU/lb vs. 12,500 BTU/lb for coal), so the savings on energy costs can be significant. Since most kilns use whole tires, and passenger-car and light-truck tires contain some two and one-half pounds of high-grade steel, kilns deriving more than 10% of their fuel from tires also recognize a cost savings on their source of iron ore. These savings can be augmented when the kiln receives a fee (referred to as a tipping fee) for the whole tires it accepts.

The use of TDF, however, should not be considered simply for its financial implications. As compared to coal, TDF contains less nitrogen leading to a demonstrated lowering of nitrogen oxides (NOx). Simple chemistry accounts for this result: as tires contain significantly less nitrogen than coal, the higher the level at which tires are substituted for coal, the greater the reduction of NOx. But, there is typically a limit on the use of TDF. Since tires also contain zinc, substitution rates of tires have not exceeded 25% of the total fuel supply, because zinc slows the setting time for concrete. The amount of TDF any kiln can use will be a function of the level of zinc in its raw material, which varies from location to location.

TDF characteristics

Tires are predominantly composed of carbon, hydrogen and oxygen (88%), which accounts for their rapid combustion and relatively high heating value. Additionally, tires tend to have a lower percentage of sulfur than some coals. Sulfur in tires ranges from 1.24% to 1.5% by weight; sulfur in coal can range from 0.5% to 4.5%, depending on the source. Calcium carbonate, the largest single ingredient in cement, is one of the most effective natural sulfur gas scrubbers. The presence of calcium carbonate helps control sulfur emissions from a cement kiln. Emissions data from a variety of kilns has clearly demonstrated a consistent reduction in sulfur and other emissions with the use of TDF.

Since all tire components are combustible, combined into the clinker or captured by an air-pollution-control system, there is no ash disposal. Finally, the components of the scrap tire, once chemically combined with the clinker, are not capable of leaching out. In short, cement kilns use 100% of the scrap tire in an environmentally sound manner.

Market considerations

The scrap tire industry in general and the TDF marketplace in particular face challenges from several opponents of local or national scope. Using tires as a source of energy is not well received by such parties for two basic reasons: (1) concern about potential emissions; and (2) the loss of a resource, based on the theory that use as a fuel diverts tires from higher value-added markets. Over the last two years, opposition — always part of the permitting process — has become especially active with the result that five permitted facilities are not using TDF and another four plants are embroiled in fiercely contested permitting processes.

The tire and cement industries continue to provide information on air-emissions issues related to the use of TDF. In reality, the addition of TDF typically has had a neutral to positive impact on air emissions. While TDF opponents might be active during the permitting process, once a kiln starts up with TDF, opposition generally abates, since their worst fears have not been realized.

Institutional barriers also inhibit the use of TDF. Government policies that delay or discourage the use of TDF may be federal, state or local. Such obstacles take several forms, ranging from lengthy and difficult permitting processes to excessive regulatory governance to policies that simply keep potential end-users from ever submitting an application for a trial use.

From 2001 to 2003, TDF consumption in the cement industry (53 million tires) remained constant, despite the addition of four TDF-burning kilns in 2003. It would appear, then, that some kilns used less TDF than in previous years. A reduced rate of consumption could be due to limitations in the supply of tires, increases in levels of production, or construction. Also, one kiln did not use TDF in 2003 due to post-construction issues. Nevertheless, the outlook for 2004 - 2005 appears to be positive.

In 2003, the Rubber Manufacturers Association (RMA) conducted a comprehensive market study, which suggests that the use of TDF in the U.S. cement industry should increase over the next two years. Four key reasons are cited for this development: First, four kilns that started to use TDF in late 2003 should steadily increase the number of tires they consume. Second, six additional kilns are in various stages of preparing to use TDF in the next 12 months; and, an additional four to six kilns are likely to pursue TDF use in the next two years. Third, the continued emphasis on NOx emission reductions is expected to have a positive impact on the use of TDF. EPA recently published a final rule to implement the second phase of a program to reduce nitrogen oxides from power plants and other large industrial facilities in the eastern United States. Issued under the NOx SIP call, the rule became effective June 21, requiring a further reduction of about 100,000 tons of nitrogen oxides per year by 2007. A fourth reason is economics — TDF provides significant cost savings in kiln operation.

TABLE I: SCRAP TIRE CONSUMPTION (in millions)

	TDF	Civil Engineering	Ground Rubber
1998	114	20	15
2001	115	40	33
2003	129	56	28

Given current conditions in the cement industry, TDF consumption is expected to increase by 5 to 10 million scrap tires within the next year. Additional demand of 6 to 10 million scrap tires within three years is likely. By 2005, it is conceivable that 50 facilities — comprising a total of 70 kilns — will be using TDF. While this would be considered positive growth, it must also be recognized that such levels may be approaching the upper limit of total potential demand in this market sector.

While the use of tires for cement-kiln fuel has been increasing, other markets for tires have expanded as well. In the fuel market, TDF use, spurred by cost savings, has increased dramatically in pulp and paper mill boilers and industrial boilers.

In 2003, a new application for scrap tires was introduced: charge material in electric-arc furnaces (EAF). While only three EAFs are now using tires, another 10 to 15 EAFs across the nation are actively pursuing that option or are candidates for tire consumption.

Another growing market is the use of tires in civil engineering applications, where tires (usually shredded) replace at least a portion of conventional construction materials such as sand, rock, stone, and clean fill. Tire use in landfill construction and road building has increased dramatically over the last 10 years, going from five million tires a year in 1992 to 56 million tires in 2003. Projections suggest that civil engineering applications could consume some 70 to 80 million tires annually within five years.

TABLE 2: TDF CONSUMPTION BY INDUSTRY

	Cement Kilns	Pulp & Paper Mill Boilers	Industrial & Utility Boilers
1998	31 plants 38 mil.	19 mills 20 mil.	32 sites 56 mil.
2001	39 plants 53 mil.	14 mills 19 mil.	27 sites 45 mil.
2003	43 plants 53 mil.	17 mills 25 mil.	30 sites 50 mil.

Uneven landscape

While scrap-tire markets continue to expand, not all regions of the country have benefited from this growth. In fact, the majority of expansion has occurred in the Mid-Atlantic region to the Southeast and into the Gulf Coast area. The North Central region also has a strong market base. A view of the geographic distribution of scrap-tire markets reveals a significant trend: east of the Mississippi River, demand for scrap tires is approaching the number of tires generated. Indeed, in the Southeast, market demand exceeds the supply of scrap tires. Consequently, considerable trans-state/regional shipment of tires occurs to satisfy local requirements.

With the exception of Illinois, Iowa, California, Texas and Oregon, markets for scrap tires west of the Mississippi River are generally few and far between. That half of the country is characterized overall by relatively lower population density and greater distances between population centers. Given the high costs of transportation, the number of tires available in any given area, and the availability of landfill, there is little wonder that markets have not developed to the same extent as those east of the Mississippi.

TABLE 3: U.S. CEMENT KILNS UTILIZING SCRAP TIRES AS FUEL (2003)

Company	Plant	Location	Whole Tires?	Kiln Type	No. Of Kilns
Ash Grove	Durkee	OR	WT	PHPC	1
Ash Grove	Foreman	AR	WT	LSW	3
Ash Grove	Incom	ID	WT	LSW	2
Ash Grove	Midlothian	TX	WT	LSW	3
Ash Grove	Seattle	WA	WT	PHOC	1
California Portland	Colton	CA	WT	LSD	2
Capital Aggregates	San Antonio	TX	WT	LSW	1
Capitol Chemical	Martinsburg	WV	WT	LSW	2
Cemex	Balcones	TX	WT	PHPC	1
Cemex	Brooksville	FL	WT	SPH	1
Cemex	Clinchfield	GA	WT	SPH	1
Cemex	Knoxville	TN	WT	PHPC	1
Cemex	Odessa	TX	WT	SPH	2
Essroc	Bessemer	PA	WT	LSW	2
Essroc	Brooksville	FL	WT	PHPC	1
Essroc	Fredrick	MD	WT	LSW	2
Fla. Rock Industries	Newberry	FL	WT	PHPC	1
Holcim	Ada	OK	WT	LSW	2
Holcim	Clarksville	MO	PT	LSW	1
Holcim	Dundee	MI	WT	PHPC	1
Holcim	Devils Slide	UT	PT	PHPC	1
Holcim	Mason City	IA	PT	LSW	2
Holcim	Midlothian	TX	PT	PHPC	2
Holcim	Portland*	CO	PT	LSD	2
Holcim	Theodore	AL	PT	PHPC	1
Lafarge	Atlanta*	GA			1
Lafarge	Seattle	WA	PT	LSW	1
Lafarge	Harleyville	SC	WT	PHPC	1
Lafarge	Joppa*	IL	WT	PHPC	1
Lafarge	Tulsa	OK	WT	LSD	2
Lafarge	Whitehall	PA	WT	SPH	2
Lehigh	Allentown	PA	WT	LSD	2
Lehigh	Redding	CA	WT	PHPC	1
Lehigh	Leeds	AL	WT	SPH	1
Lehigh	Union Bridge	MD	WT	LSD	4
Lone Star	Cape Girardeau	MO	PT	PHPC	1
Lone Star	Oglesby	IL	WT	LSD	2
Mitsubushi	Ontario	CA	WT	PHPC	1
National	Lebec*	CA	WT	LSD	1
Monarch	Humboldt	KS	WT	PHPC	2
St. Lawrence	Hagerstown*	MD	WT	LSW	1
Texas Industries	Hunter	TX	PT	SPH	1
Texas Lehigh	Buda	TX	WT	PHPC	1
Totals:	43				64
WT whole tires PT processed tires PHPC Preheater/precalciner LSW Long straight wet LSD Long straight dry SPH Short Preheater
* did not use TDF for the entire year in 2003

Stockpile issues

Since 2001, the number of tires in U.S. stockpiles has decreased by some 40 million. Of the some 275 million tires stockpiled today, a vast majority — approximately 90% — is concentrated in 11 states: Texas, New York, Ohio, Michigan, Alabama, Colorado, Connecticut, Pennsylvania, Massachusetts, Washington and New Jersey. Four of these states (OH, NY AL and MI) have abatement funds, although for Michigan and New York, the level of abatement funding is unknown as their budgets had not passed at the time of this writing.

In sum, TDF will remain the single largest market for scrap tires. Continued market expansion is anticipated in the cement industry, as well as in the pulp and paper industry. This continued increase will be a function of cost considerations and environmental benefits, including NOx reduction. Especially in those states committed to reducing stockpiles, cement kilns can be expected to receive some of their supply from abatement projects.

As markets for scrap tires mature, the supply of tires should equal demand. In parts of the country experiencing equilibrium, the supply of whole tires to cement kilns may be impacted, since kilns still receive a tipping fee for tires consumed. In regions where an imbalance between supply and demand exists, tip fees are expected to remain steady. On the other hand, regions of equilibrium are likely to see reduced tip fees, or supplies could be impacted. Contractual arrangements can ease potential uncertainty related to supply and tip fees.

Michael Blumenthal was the executive director of the STMC and now serves as senior technical director for the Rubber Manufacturers Association. He can be contacted at Michael@rma.org. Copies of the complete 2003 market study are available on the RMA web site (www.rma.org) and can be downloaded at no charge.