Comments Regarding the Draft…

Comments Regarding the Draft Tire Regulation under the Resource Recovery and Circular Economy Act, 2016

Emterra Tire Recycling Ltd. is pleased to have the opportunity to submit the following comments and recommendations regarding the proposed Tire Regulation under the Resource Recovery and Circular Economy Act (RRCEA), 2016. While we applaud the Waste-Free Ontario framework and its goal to shift Ontario to a circular economy, we do see a number of elements in the proposed regulation that could result in unintended consequences that run counter to the goals of the program, or place an unreasonable burden on Producers and Service Providers. We outline our concerns below in an effort to assist the Ministry of Environment and Climate Change (MOECC) with the final regulation.

1)Management of Tires

Emterra has a serious concern about the potential impact of Section 9.1(i) which would permit Producers to count an unlimited number of reused tires towards meeting their collection quotas in any given year.

We believe that this policy would not only leave the door wide open to potential fraudulent activity, but even more importantly it runs counter to the principle of promoting a Circular Economy that strives to have waste products achieve the highest use. The draft regulation, as presented, may result in a significant number of these collected and salvaged tires exported to jurisdictions where end-of-life (EOL) tire management programs do not exist and tire recycling facilities are generally non-existent. We will discuss our concerns in further detail as it relates to the potential for fraudulent activities and environmental outcomes.

Potential for Fraud With regard to fraudulent activity, once a tire leaves Ontario?? it would be very difficult to maintain an effective chain of custody for EOL tires especially when ownership of the tires may change hands one or more times. For example, there is a very robust worldwide market for baled tires which are shipped to countries such as India and Vietnam. In these receiver countries these used tires are often shredded and used as tire derived fuel (TDF).

We can therefore see a situation develop in Ontario where a service provider contracts with a Producer Responsibility Organization (PRO) or Producer to provide recovery services for all, or some of the tires collected through a collection network. Rather than incurring the cost of processing these tires into crumb rubber which can be significant, the service provider instead “sells” and exports these tires to a used tire dealer based in the United States (US). This US dealer then bales the tires and ships them off to a buyer in a foreign country who shreds them and uses the shred for fuel.

Since the US-based used tire dealer, in this example, also markets useable EOL tires it would be impossible for any audit to determine which tires were resold and which were baled for example and resold for TDF in another country.

Therefore with a potentially significant cost advantage over a competitor who is legitimately processing used tires, an Ontario service provider could fraudulently claim that their tires are being sold for reuse when in fact they are not. Not only would this fraudulent activity potentially depress prices charged by service providers to remain competitive, but this type of fraud could also enrich service providers involved in it and would result in a less than desirable environmental outcome.

Environmental, Health and Safety Concerns Fraud aside, it is a matter of record that many tires exported from Ontario end up in jurisdictions that have extremely limited and in many instances no facilities of any kind to deal with EOL tire disposal. Used tires that are shipped to these states and countries after a short period of use end up in landfills, illegally dumped in fields and even being dumped in the ocean. A common air pollution problem appears to stem from the worn tires being dumped in a landfill where they are burned for want of a more environmentally sustainable way of dealing with them.

In an attempt to deal with the problem some Caribbean nations such as Guyana have outright banned the importation of used tires. Some issues cited in the Guyanese press for the ban include:

-Used tires create safety and environmental threats

-Lack of quality control on used tires imported into the country

-Some imported used tires are as much as 20 years old when they are offered for sale in Guyana

-Where new tires installed on a vehicle should last between five and seven years, used tires need to be replaced as frequently as four times per year which only magnifies the country’s tire disposal problem

The Jamaican press goes so far as to call used tires ‘dangerous’ and cites data that shows that as tires age “….the rubber components become harder and less elastic and the potential for corrosion and oxidation of the internal steel belts increase, even though there may be no external evidence of such deterioration.”

Prestigious organizations such as Consumer Reports and the U.S. Tire Manufacturers Association appear to support these opinions and have also issued warnings asserting that purchasing and installing used tires on vehicle can be a risky business if the tires are not in near perfect condition. The “bottom line” of a July 30, 2012 article in Consumers Reports News states that “Used tires can save money, but they are not worth the risk.” The U.S. Tire Manufacturers on the other hand in their Tire Information Service Bulletin note that used tires depending on their history “….may have damage that could eventually lead to tire failure.” Unfortunately based on the information contained in the reports from Guyana and Jamaica the used tires they are receiving do not meet these high standards.

As for what happens to the used tires that Ontario exports to the Caribbean and other impoverished nations when they are truly worn out we noted the following news stories:

 

-In a March 3, 2011 story in the Jamaican press a senior government official states that “There is still no plan in place to deal with the millions of old tyres piled meters high at dumps and landfills across the island.” It further notes that “….over time, the importation of used tires will increase the volume of hazardous waste in the island….” It concludes that in an attempt to deal with the issue the government the previous year had placed a ban on importing used tires as it grappled on how to deal with the disposal issue

-About 800,000 used tires are dumped in Trinidad and Tobago each year according to the Minister of Water Resources and Environment Ganga Singh in May, 2015. He said that given that “Improper disposal of tyres was a menace….contributing to flooding and providing a site for the breeding of mosquitos….” It was critical to find a short term solution for tire disposal

-Philipsburg, St. Maarten, March 3, 2017 it took fire trucks several hours to extinguish a tire fire at the sanitary landfill while black smoke affected a number of surrounding towns and rural areas. Minister of Health Emil Lee shared his concern and outrage of the public over the fire and smoke which was laden with toxic chemicals

-St. Maarten Government Minister Christophe Emmanuel estimates that there are about 60,000 tires in the island’s landfill. The article notes that the government is looking at buying a ‘crusher’ for tires to help eliminate the dump fire problem

-On October 10, 2017 the Director of Jamaica’s National Solid Waste Management Authority Audley Gordon “….says the uncontrolled burning of tyres……in and around the Riverton City landfill in St. Andrew must be stopped or regulated if the deteriorating air quality is to improve.”

While the Caribbean, Africa and Mexico are key export customers for used Ontario tires many also end up in the southern US. Unfortunately, it appears that the ability or desire to dispose of used tires in an environmentally sound manner is not evident in many US states.

A recent article in the Dallas Morning News notes how the Governor of Texas had recently vetoed a bill with the goal of preventing illegal dumping of used tires. The article goes on to note that tires are dumped illegally every day in Texas and that the state “…leads the nation in the number of unauthorized scrap tire piles dumped across the state.” According to the story the Texas Commission on Environmental Quality had identified around 16 million scrap tires in illegal dump sites in the state.

While we acknowledge that tire reuse can and must be a key part of the circular economy, we advocate that this activity should be tightly controlled and the sale and export of used tires outside Ontario should be prohibited. Not only does the used tire export business lend itself to fraudulent activity, but as a principle we don’t believe the province should be condoning, and in fact assisting the export of Ontario’s waste tires to countries that have little or no ability to deal with these products in an environmentally sound manner.

In our view, removing tires that have been collected under the current and future regulation for resale in Ontario is in-line with Circular Economy principles by extending the use of products for a long as possible, extracting the maximum value and imbedded energy that went into the tire production. However, once that tire no longer has value as a safe and reliable product, that value can continue to be regenerated and extended through the processing and recycling of that tire in Ontario so that the provincial economy benefits from the next stage of that material. Those benefits to the Ontario economy and Circular Economy principles are lost if this new regulation encourages or does not restrict the export of tires or tire shred to other jurisdictions.

To this end, we propose that Section 9(1)(i) be revised so that Producers:

-Are limited to counting no more than five (5) percent of the weight of tires collected in a given year as resale tires;

-May only count used tires that are sold directly to consumers within the Province of Ontario

-Service providers collecting tires on behalf of a Producer or a PRO may only sell, or otherwise transfer ownership of said tires directly to an Ontario retailer; and

-Resource Productivity & Recovery Authority (RPRA) would have the responsibility for monitoring the reuse of tires in Ontario by service providers, Producers and PROs.

Measures such as this will help ensure that reusable end-of-life tires remain within the Province of Ontario where they can be recovered and disposed of in an environmentally sound manner when they are completely worn out.

2)Reporting, Auditing and Record Keeping

As part of the record keeping and reporting requirements, the MOECC is proposing that Producers, PROs, Tire Haulers and Tire Processors in their annual reports to RPRA include both the number and weight of each type of tire that was collected during the year. While we understand the MOECC’s goal is to be as granular as possible when collecting program data, we respectfully submit that it is necessary to be pragmatic as well.

When collecting tires, haulers in Ontario normally pick up all tires that a collector has on hand. Outside of large OTRs, haulers do not usually just pick up one type of tire. The end result is that when the hauler’s truck or trailer arrives at a Processor it usually contains a mix of tire types. These tires are then unloaded at the processing facility en masse and shredded.

The regulation in its current form would require those unloading a truck or trailer at a Processor to manually sort the tires by tire type as they are unloaded and then to transport those tires to a scale for weighing. Current procedures require a Processor to confirm the number and types of incoming tires in addition to weighing and reporting the total weight of the load.

Our concern is that adding this additional step of sorting and weighing tires by type will make the unloading process less efficient and add significant costs to the operation. We also believe that this will present an opportunity for unscrupulous operators to gain a cost advantage over competitors by skipping this step and simply assigning weights by a formula as opposed to actually counting and weighing each type of tire. A similar situation occurs today where Processors do not count off-loaded tires as they are required to do under OTS procedures.

We therefore respectfully request that the MOECC modify the proposed regulation and require participants to report the total number of each tire type collected as well as the total aggregate weight of all tires delivered to a Processor as opposed to being required to weigh inbound tires by type.

3)Tire Collection Amounts

As currently proposed in the Regulation, Producers will be required to collect a minimum amount of tires each calendar year. This minimum amount will be calculated using a formula that takes the average weight of tires supplied into the Ontario market three, four and five years previously and multiplies that number by a factor of 0.85 to account for the tread wear difference between new and used tires.

The problem with this approach is that real world conditions in the used tire industry are not linear as represented by this formula. For example as a test, if one calculated the total minimum passenger and light truck (PLT) tire obligation for all Producers in 2016 using OTS data you would end up with a target of 82,952 tonnes. In actuality however, during 2016 haulers delivered 90,036 tonnes to Ontario processors, which represents an 8.5% difference. If Producers were only obligated to collect and process 82,952 tonnes of these tires that potentially could have resulted in 7,084 tonnes of PLT tires, or 708,400 tires remaining uncollected throughout the province.

A similar problem presents itself if we look at medium truck (MT) tires. The MT target for 2016 would have been 31,921 tonnes of tires. Actual collections for the year though were 34,155 tonnes according to OTS data. This is a difference of 2,234 tonnes, or 44,680 MT tires that potentially may not have been collected.

We don’t want a situation where Producers achieve their target by October, for illustration purposes, and then stop the collection and processing activities they have been doing earlier in the year.

We see that the draft regulation is proposing to allow that ‘producers’ would be able to carry over to the next year any excess tires collected in the current year, up to a maximum of 5% (by weight) of their collection requirement to meet the standard in the following year. This provision is intended to reward successful performance without promoting the storage of excess tires for future years. The draft regulation provides few details on how this allowance would practically work. Emterra Tire Recycling has concerns if this allowance creates real world issues where collectors and processors are not compensated for tires that will need to be collected and processed later in the year.

To deal with this significant issue we would suggest that the MOECC consider obligating Producers to collect and process up to ten percent more tonnes of tires than the fixed formula requires. Such an initiative would help ensure that there are no new tire storage piles created within the province of Ontario.

4)Tire Processing Requirements

As it is currently written Section 9.1 (iii) requires that at least eighty-five percent of the weight of tires processed by a tire processor be used in the manufacture of new products, packaging, or other things. Section 9.2(i) and (ii) further note that processed materials that are land disposed, incinerated, or used as fuel or a fuel supplement cannot be included as part of the eighty-five percent. Unfortunately at this time there are no generally acceptable/commercial diversion opportunities for the fibre in Ontario. This material is either disposed in landfill or used as an alternate fuel.

Given that the ratio of fibre to crumb rubber production can vary widely between plants depending on the number of PLT tires the plant regularly processes versus the number of MT tires, we suggest that a reasonable recovery requirement would be 80% as opposed to 85%, especially at the start of the program. PLT tires contain large amounts of fibre versus MT tires, which contain virtually none. Therefore, a plant processing large amounts of MT tires would have little or no fibre while others processing primarily PLT type tires would generate large amounts.

In addition to fibre, all crumb rubber manufacturing plants in Ontario generate four to five percent of in-process waste. This is caused when there is a break down on a line and partially processed product has to be removed from the equipment before the line can be repaired or restarted.

One final point is that due to variances in tire types processed, crumb rubber, steel and fibre sales / shipments and other variables we would suggest that the percentages of fibre, wastes, crumb and other products should be calculated over a period of several years as opposed to months for the sake of accuracy.

5)Tire Export Requirements

We respectfully suggest that the MOECC not allow tires that are exported to jurisdictions that allow incineration or landfilling to be included in the 85 per cent of the weight of tires collected in a year requirement for Producers. Therefore, tires would have to remain within Ontario to be counted towards a Producer’s targets.

In our opinion, it will be impossible for a Producer with even the most diligent audit team to determine in a foreign nation or even US state whether tires from Ontario were actually turned into crumb rubber, packaging or new things, for example, and sold for manufacturing, or just shredded and sold for TDF. Especially if the foreign operator already has a crumb stream and a TDF stream running through its plant, it will be impossible for an auditor to determine which tires went where. This will become especially difficult if the tires changed hands between the Ontario generator and the foreign processor.

Conclusion

Emterra Tire Recycling is supportive of the principles and direction of the draft regulation. We believe the comments above reflect our commitment to ensure that the first Regulation under the RRCEA achieves the desired objectives. If you have any clarifications or questions regarding our comments, please don’t hesitate to contact us

 

[Original Comment ID: 212205]