Tyrecycle CEO calls for domestic markets

Mar 30, 2023

A ban on the export of whole-baled tyres was crucial in changing the way Australia manages its waste. Jim Fairweather, Chief Executive Officer of Tyrecycle, says it's now time to shift attention to creating a domestic market to encourage industry investment.

He says social licence to consume tyre-derived products and regulator willingness to let that happen will determine the success of the waste export bans. At the moment, low use of tyre derived products is exposing the Australian market to risk factors such as exchange rates and global shipping costs.

"The only way to avoid that pressure is to have the products consumed domestically. It's important we work as an industry toward that outcome," Jim says. "It's crucial we generate domestic consumption, be that tyre-derived-fuel (TDF) or rubber crumb for use in asphalt, or tile adhesives or sporting fields."

Tyrecycle has produced TDF as an alternate fuel for domestic and international use in industrial applications such as cement kilns, electricity generation or industrial process heat. It is estimated that 150,000 tonnes of fuel generated by such a process avoids 174,000 tonnes of carbon emissions compared to brown coal.

Jim says interest in TDF has increased in the past six months, driven by customers keen to decarbonise their operations and the rising price of coal. But he says it's important as a recycling industry that any investment in TDF in Australia is based on long-term structured agreements rather than a short-term reaction to rising coal costs.

"There needs to be a partnership between the producer of the fuel and the consumer," he says. "Tyrecycle has long-term agreements for processing in the fuel space. They’re critical to making the right products."

Tyrecycle sells 120,000 tonnes annually of TDF to overseas markets. Jim describes the scenario of exporting to Asian operations that have a presence in Australia as "madness".

He says a local market would present opportunities for more high value, oil-based inputs for manufacturing, but it should be industry-driven. Government can play a part in helping the market develop, particularly in the approval process.

"Tyrecycle is working on one domestic opportunity at the moment and the regulator is saying it will take six to eight months for licence approval to take that material," Jim says. "There's a role government can play in helping smooth the road."

It's roads, Jim says, where the government can take a leading role. He says Australia is under-developed in its use of crumbed rubber asphalt compared with other countries. What movement there has been, has mainly been propelled by roads contractors.

"The rubber crumb domestic market needs to be grown for the success of the waste ban. Governments are the ones that buy roads. When it comes to crumbed rubber, the government has to drive policy and procurement."

Jim applauds the former Federal Government for implementing the waste export bans and introducing them so quickly. However, he says there are concerns that need to be addressed.

"We’ve still got unscrupulous operators sending whole-baled tyres off-shore under falsified codes," he says. "While most freight-forwarding companies are absolutely legitimate and operate to high standards, some in the market are trying to coach and train exporters on how to write shipping documents to get around the ban."

He says that before the bans were introduced there were fears and rumour mongering that they would create stockpiling. While there was stockpiling for a short time, Jim says it was because a government portal to apply for an export licence was opened too late. The process was arduous, and many recyclers were without a licence when the bans came into effect on 1 December 2021.

He says that generated a natural tension for the department between enforcement and perceived success of the ban. The industry would still like to see more enforcement at a federal customs export level.

"There are active regulators in New South Wales and Victoria," Jim says. "They know that there may be operators out there that haven't altered their business model. We’re really pleased to see that those operators are being dealt with swiftly by regulators.

"We absolutely have to make sure that we stop these operators eroding the value proposition of those companies and operations that have invested in infrastructure and plant equipment to make sure that we recycle right."

Even more pleasing, Jim says, is the establishment of several industry and government committees to look at how the ban is being managed and the challenges industry is facing.

He says the global market has added to those challenges. Securing ships and containers is difficult and what is available is expensive on certain routes.

"There is no spare capacity in the global shipping market. That's what's causing pricing angst and difficulties around moving our product off-shore," Jim says. "Which reinforces the fact that we need to make sure we’ve got domestic markets being developed."

He says the uptake of tyre-derived fuels or products is driven by customers seeking the carbon benefit of using tyre products over fossil fuels, and those looking for circularity and product reuse. Some are starting to consider both.

Collection customers who chose to manage their waste appropriately play an important role.

"Without those retailers we wouldn't have a valued-added tyre recycling industry," Jim says. "There are still some retailers that aren't prepared to pay a price for recycling and look the other way when it comes to disposing of their tyres.

"It's a real shame that some social drivers are not being enforced. Most retailers walk the talk but unfortunately others don't. We need to be braver as an industry in calling those people out."

For more information, visit: www.tyrecycle.com.au

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