Tyre recycling costs may rise

Reductions in global prices for oil and coal, as well as the closure of used tyre fuel plants in Malaysia have resulted in a collapse in offshore demand for Australia’s used tyres, which, the Australian Tyre Recyclers Association (ATRA) is claiming, will pose an environmental threat in Australia and force recycling costs up.     “In the current market, there is a huge risk of closure of tyre recycling businesses, which could see an increase in stockpiles of used tyres at retail operations and an increase in illegal dumping by rogue operators,” said Rob Kelman, Executive Officerof the ATRA. “A large portion of Australia’s used tyres are shredded and utilised as alternative fuels for energy and cement production throughout Asia and beyond.   “As the offshore price for this alternative fuel is pegged to that for coal and oil, the Australian tyre recovery and recycling industry is now in a state of financial crisis. There is now a very real risk of recycling businesses collapsing and retailers being left with unmanageable stockpiles.”   The recent devastating fires in Moyston, Victoria showed just how destructive tyre stockpiles can be with a pile of 30,000 tyres catching fire near the Grampians.   The EPA in Victoria is currently investigating whether the tyres were illegally dumped or stockpiled and is working to contain fire remnants which have the potential to contaminate local waterways.   “Unfortunately, it’s the tip of the iceberg,” said Kelman. “It’s estimated there are tens of millions of tyres unaccounted for in Australia, which are either stockpiled or illegally dumped and that will only get worse if a solution to the current crisis facing recyclers can’t be found.”   “Tyre stockpiles are a fire hazard waiting to happen and our members are critical to addressing that environmental risk. The sheer reality is Australia can’t afford to see those companies who are providing environmentally sustainable solutions close their doors.   “The industry is desperately looking for solutions. While some tyres can be crumbed locally, the shear volume of tyres available now is swamping our members recycling facilities causing many to approach the limits of their storage capacity.”.   The export trade in used tyres ensures recyclers aren’t forced to stockpile tyres above those required for recycling here in Australia. ATRA say it is a low margin industry and the current price impact, a reduction of $50 per tonne since November, makes the industry unsustainable.   “Legitimate tyre recyclers will generally charge a retailer around $2 per passenger tyre for the collection, shredding and export of this waste product, which is in-turn passed onto consumers,” said Kelman.   “In the short term, these costs are going to have to rise to help offset the fact that tyre recycling businesses are no longer receiving any revenue for this waste material and are in fact paying for tyre shred to be exported.”