EPA-600/5-75-019
December 1975
Socioeconomic Environmental Studies
IMIC EVALUATION OF
TECHNICAL SYSTEMS FOR
SCRAP TIRE RECYCLING
Municipal Environmental Research Laboratory
Office of Research and Development
U.S. Environmental Protection Agency
Cincinnati, Ohio 45268
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RESEARCH REPORTING SERIES
Research reports of the Office of Research and Development,
U.S. Environmental Protection Agency, have been grouped into
five series. These five broad categories were established to
facilitate further development and application of environmental
technology. Elimination of traditional grouping was consciously
planned to foster technology transfer and a maximum interface in
related fields. The five series are:
1. Environmental Health Effects Research
2. Environmental Protection Technology
3. Ecological Research
4. Environmental Monitoring
5. Socioeconomic Environmental Studies
This report has been assigned to the SOCIOECONOMIC ENVIRONMENTAL
STUDIES series. This series describes research on the socioeconomic
impact of environmental problems. This covers recycling and other
recovery operations with emphasis on monetary incentives. The non-
scientific realms of legal systems, cultural values, and business
systems are also involved. Because of their interdisciplinary scope,
system evaluations and environmental management reports are included
in this series.
This document is available to the public through the National
Technical Information Service, Springfield, Virginia 22161.
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EPA-600/5-75-019
December 1975
AN ECONOMIC EVALUATION OF TECHNICAL SYSTEMS FOR
SCRAP TIRE RECYCLING
by
Haynes C. Goddard
Solid and Hazardous Waste Research Division
Municipal Environmental Research Laboratory
Cincinnati, Ohio 45268
MUNICIPAL ENVIRONMENTAL RESEARCH LABORATORY
OFFICE OF RESEARCH AND DEVELOPMENT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CINCINNATI, OHIO 45268
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DISCLAIMER
This report has been reviewed by the Municipal Environmental
Research Laboratory, U.S. Environmental Protection Agency, and approved
for publication. Mention of trade names or commercial products does
not constitute endorsement or recommendation for use.
ii
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FOREWORD
Man and his environment must he protected from the adverse effects
of pesticides, radiation, noise, and other forms of pollution, and the
unwise management of solid waste. Efforts to protect the environment
require a focus that recognizes the interplay between the components of
our physical environment—air, water, and land. The Municipal Environ-
mental Research Laboratory contributes to this multidisciplinary focus
through programs engaged in
o studies on the effects of environmental contaminants on the
biosphere, and
o a search for ways to prevent contamination and to recycle
valuable resources.
The purposes.of this report on scrap tire recycling are to foster
our understanding of the relative benefits and costs of various recycling
alternatives and to provide guidance to the most effective use of our
scarce resources.
iii
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ABSTRACT
A technological and economic assessment is made of alternative
technologies to recover the waste rubber in scrap vehicle tires. The
principal technical alternatives evaluated are ground scrap rubber as
an asphalt additive, retreading, energy recovery, and carbon black
recovery. The greatest potential benefits are seen to occur with
retreading and asphalt additives, followed by carbon black and energy
recovery.
IV
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INTRODUCTION AND OBJECTIVES
In 1971, 266 million vehicle tires were produced and imported for
domestic consumption, and approximately 245 million were removed from
service. An estimated 185-200 million tires were discarded to landfills,
left on scrapped vehicles, or simply dumped. It would seem that this
represents a fairly large loss of nonrenewable resources. However, due to
the fact that tires decompose at extremely slow rates, and therefore are
relatively inert, these resources have not been irretrievably lost, but
are simply deposited in landfills, dumps, and auto scrap yards where
they are available for recovery once economic circumstances warrant it.
Scrap tires do, however, cause disposal problems if they are not shredded
before landfilling, as they do not compact well in landfills. They
cause asthetic insult if littered or dumped indiscriminately, and if
incinerated whole, cause significant air pollution as well as damage
to incinerators due to their high heat value. The problem of discarded
tire disposal is exacerbated by the declining demand for scrap tires
in the traditional recycling markets—reclaiming, retreading, and tire
splitting. Though these markets never have consumed all available
discarded tires, they have declined relatively in recent years (see
Table 1). The reasons for this stem largely from insufficient economic
incentives, and the strength of those incentives present has been
declining secularly. This situation stems in part from the lack of
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TABLE 1. TIRE PRODUCTION AND REFUSE TRENDS
New tires
Item (in millions)
Retreads
(in millions)
Retreads as
% of total
Reclaimed Reclaimed
rubber0' rubber
(10° Ibs.) (106 kg.)
Year:
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
98.9
112.3
119.6
118.4
132.5
138.5
150.4
168.9
173.7
172.8
199.0
204.7
37.2
40.2
38.0
,5
.2
39.
42.
43.8
44.0
43.6
43.3
43.6
45.5
46.5
27.3
26.3
24.1
25.0
24.2
24.0
22.6
20.5
20.0
20.1
18.6
18.5
581.5
457.3
655.9
591.0
628.4
630.4
618.8
627.8
621.3
545.8
575.0
560.0
(est)
263.8
207.6
297.
268.
284.
286.
280.
285.0
282.0
247.7
261.0
254.2
,7
,3
,2
,2
,9
Annual Rate
of Change 6.84%
2.05%
-3.48%
-.34%
,1970 Automobile Facts and Figures.
Reference 1, p. 65.
.Reference 1, p. 50.
For the years 1963 - 1969, the quantity of rubber reclaimed declined at
an annual rate of 1.07 percent.
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economically attractive technologies for scrap tire use, which itself
reflects inadequate incentives, and from the fact that potentially
significant users of scrap tires (state and local highway departments)
operate under relatively weak cost-reducing incentives.
The principal problem now confronting public authorities with respect to
scrap tires appears to be one of inadequate or nonexistent technologies
for tire disposal. On closer examination, however, the problem is rather
more one of the costs of managing or using the scrap tires. Some
landfills around the country will accept tires after payment of a $2 or
$3 fee per tire to cover the extra costs of shredding. The problem is
thus one of finding alternative uses for tires that yield higher flows of
benefits to society and/or incur lower costs. The analysis below
represents an initial step in the search for these alternatives.
The objectives of this report are (1) to review the various technologies
available and potentially available for tire recycling and reuse, (2) to
assess the relative benefits and costs of each, (3) to identify the most
important barriers to increased tire reuse and recycling, (4) to make
recommendations for future technological and economic research in this
area, and (5) to suggest study of various policy options that could be
used to promote greater recycling and reuse in a manner that would lead
to increases in national economic welfare. The rubber reuse technologies
to be reviewed here are (a) asphalt additives, (b) energy recovery, (c)
carbon black recovery, (d) retreading, (e) destructive distillation, and
(f) reclaiming.
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The scrap tire problem has received attention from research agencies of
the Federal government (1, 2, 3), the rubber industry (4, 5), and State
and local governments (6, 7). Although a fairly continuous amount of
research and experimentation has taken place with respect to rubber (and
to a lesser extent, scrap rubber) in the last 10 to 15 years, no appre-
ciable demand for scrap tires has appeared. Thus the backlog of scrapped
tires continues to rise as the demand for reclaiming and retreading
remains static or declines. The rubber industry has been aware of the
unused resource potential that these tires represent, but it has not been
able to develop a technology that is sufficiently attractive economically
to warrant large-scale recovery.
A number of factors that bear on this situation are amenable to policy
actions; some of these will be identified in the ensuing discussion.
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ECONOMIC ASSESSMENT OF CURRENT AND POTENTIAL SCRAP RUBBER REUSE TECHNOLOGIES
GROUND SCRAP TIRES AS AN ASPHALT ADDITIVE
Adding rubber to road building materials has a fairly long history of
experimentation on the part of State and local highway and street depart-
ments and the rubber industry (8). The principal methods of adding rubber
have been in (1) crack and joint sealer, and (2) the binder for chip seals
(small stones compacted into a thin layer of asphalt). In addition,
experimentation has been undertaken with the material for patching and
waterproofing bridge decks and creating a stress or strain attenuating
interface between new and old surfaces on roads prone to cracking and
on bridges that experience many freeze-thaw cycles.
In 1972, 18 million tons of liquid asphalt were produced, of which 5.42
million tons or 30 percent were used in road maintenance and repair
(resurfacing, etc.)(9) Though our estimate may be somewhat high, we
estimate that 55 to 60 percent of all currently discarded scrap tires
(about 200 million tires) could be used in road applications if all
technical problems were resolved and if the specifications for all mainten-
ance and repair work were rewritten to require rubberized asphalt. This
would be an overall demand for about 110 to 120 million tires. More
knowledge is needed of the effects of climate, asphalt hardness, traffic
conditions, etc., to determine the suitability of the material under these
various conditions.
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Though it is unlikely that this material would be used to such an extent,
the potential is clear. An initial examination of the benefits and costs
of using scrap tires in road applications does suggest that rubberized
asphalt represents one of the best economic uses of these wastes. The
following discusses the technologies of rubberized asphalt and provides
a brief evaluation of the potential net benefits of each (where data are
available).
Seal Coats
Technique - Rubberized seal coats or chip seals have been most extensively
tested in Phoenix, Arizona, where street resurfacing with this additive
was begun in 1966. Tread buffings that have not been devulcanized are
mixed (25 percent by weight) with hot liquid asphalt in a distributor
truck about thirty minutes before application. Application proceeds as in
a normal seal coat operation.
The purpose of seal coating in general is to close fatigue cracking in
pavements ("alligator" cracking) caused by excessive pavement deflection
from heavy loads, and also to waterproof the surface. The deflection
occurs because of elasticity in the substructure of the road: either in
the subgrade, the subbase, or the base course. If it is not corrected,
A more complete discussion with material preparation and application
instructions can be found in the Federal Highway Administration Publi-
cation Rubber-Asphalt Binder for Seal Coat Construction (3).
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an expensive reconstruction of the road is necessary, which, in urban
areas, involves the removal of the old pavement and its replacement.
The addition of scrap crumb rubber to the liquid asphalt binder raises
the ductility of the wearing course, and stops the cracking. In addition,
the rubber widens the temperature range of the asphalt, reducing cold
weather brittleness and hot weather bleeding. Also, since the chip or
stone retention is higher in the rubberized binder, the skid resistance
of the road may be improved.
Benefits and Costs - The stream of benefits (cost savings) yielded by
a rubberized seal coat is created principally through the postponement
of a road reconstruction that would be required to correct fatigue
cracking problems. There may also be additional benefits associated
with a reduction in accidents and injuries resulting from the possible
higher skid resistance of the surface, but at present there are no data
o
available to illuminate this aspect of the use of the material.
While no extensive studies have been performed on the economics of the
trade-offs between rubberized and non-rubberized treatments, some data
are available from the Phoenix experience from which some tentative
inferences about the trade-offs can be drawn.
2
There are, of course, additional benefits to be obtained from tire
recycling in general, such as reduced aesthetic insult from decreased
dumping and littering, and increased conservation of nonrenewable
resources.
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The estimates presented below are based upon economic and technical
conditions experienced in Phoenix, Arizona, in the early 1970"s. The
current state of knowledge is such that the estimates probably cannot
be treated as generally applicable to the rest of the country. This is
due to the relatively favorable climatic factors present in this part
of the country.
For a fatigue cracked urban road surface, there are essentially two
ways in which to postpone reconstructing the road (tearing out the
old pavement and replacing it): (a) resurfacing it with an ordinary
chip seal, or (b) with a rubberized chip seal.
The question under consideration here is what are the incremental or
marginal benefits (cost savings) associated with rubberized asphalt.
These marginal benefits are properly evaluated as the difference in the
costs of the two processes. These benefits are treated conservatively
here as the net present value of the interest savings on the capital
These factors are little rainfall and few freeze-thaw cycles, which may
contribute to diminished durability of the material by stripping the
asphalt binder from the stones or chips.
There is actually a third, intermediate method: raising the utility
access covers and placing one to two inches overlay on the cracked
surface. This will cost more than the chip seals, and would serve
only to magnify the benefits estimated below.
Note the assumption of equivalence between one rubberized seal coat
(expected life of eight years) and three non-rubberized (expected life
of three years each). In point of fact, where three seal coats would
present a problem of raising the road grade too high, the equivalence
would not apply, and the benefits of the rubberized treatment would be
higher. These values are mentioned below.
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cost of reconstructing an urban road. This permits us to standardize the
analysis in terms of the eight year expected life of a rubberized chip
seal, and ignore the 20 year life of a reconstructed road with appropriate
maintenance.
Reconstruction of an urban road costs about $24,000 for an area of one
block by four lanes (560' by 60', 171m x 18m, approximately). A recon-
structed road would require an ordinary chip seal in five years, costing
$1920. The cost of a rubberized chip seal is about $2400. The net
present value (NPV) of the interest savings on the reconstruction and
ordinary chip seal is $10,699 discounted at 10 percent and assuming a
10 percent productivity on governmental expenditures (i.e., an opportunity
cost of 10 percent). This is,
NPV = 24,000[(1.1) - 1] - 1920[(1.1) - 1] - 2400 = $10,699
(1.1) (l.D
At a 6 percent rate (both discount factor and opportunity cost), this
NPV is $6772.
Obtaining approximately the same postponement via three ordinary chip
seals gives a NPV of $8653 at 10 percent and $4293 at 6 percent.
At 10 percent this calculation is
2400[(1.1) - 1] + 1920[(1.1) - 1] - 1920fl + 1 + 1
(1.1) (l.D 1 (1.1) (1.1)
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The marginal benefit of the rubberized treatment is the difference
between the two treatments, which is $2046 at 10 percent and $2479 at
6 percent. Expressing these marginal net present values in terms of
the scrap rubber utilized in the rubberized treatment (3301 pounds,
1497 kg), savings are generated at a rate of 62c per pound at 10 percent
($9.30 per tire) and 75c at 6 percent ($11.27 per tire). These savings
are substantial. As mentioned, in one sense these savings should be
regarded as lying toward the upper limit of the possible range of benefits
because of the favorable climatic conditions which obtain in Phoenix, and
thus probably overestimate the value of the rubberized treatment in colder
climes. In another sense, however, it may not be technically feasible to
place three ordinary chip seals on a fatigue cracked road in some circum-
stances, whereby the proper comparison is between a rubberized chip seal
and an alternative treatment that involves raising utility hole covers or
reconstructing the road. In this case, the value of the rubberized treat-
ment will be greater than what we have shown above. Preventing a recon-
struction would make scrap tires worth $48.60.
Joint and Crack Filler
Technique - Hot poured sealants for filling cracks and joints are used
throughout the nation on both concrete and asphalt surfaces. Liquid
asphalt, however, tends to bleed out of filled joints during hot days,
and to become somewhat brittle in freezing weather. The addition of
crumb rubber reduces both of these problems, as with seal coats, by
extending the flexible temperature range.
10
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The technique is used extensively on the New York Thruway, and is simple
in nature. Devulcanized crumb or ground rubber is added to hot liquid
asphalt (20 percent by weight) at the roadside, held at a high temperature
(400° - 450° F; 204° - 232° C) and applied. From 1968 to 1972 the New
York Thruway used more than one million Ibs. (454,000 kg) of crumb rubber,
or about 50,000 scrap tires (10).
Benefits and Cost - The stream of net benefits (cost savings) obtained
from using rubberized joint filler flow from a reduced need for labor
and materials for joint filling, a reduction in road damages caused by
debris in joints that prevent proper expansion, and improved winter
patches. No detailed analysis of the benefits and costs has been
performed anywhere, but it is possible to make some rough calculations
for the reduced need for labor and materials with data provided by the
New York State Authority.
The Thruway Authority has been able to reduce its joint and crack filling
operations by about 50 percent because of the approximate 100 percent
increase in the service life of the rubberized filler. Labor costs are
about $20 per gal. ($4.70 per 1) of filler and $90 per mile ($56 per km),
of which $45 is saved because of the 50 percent reduction in refilling
operations. Increased materials costs (rubber at 15c per lb.; 33C per
kg) and asphalt at 4c per lb. (9
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is then approximately 29
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earlier, 18 million tons of liquid asphalt were produced in 1972; 55
percent of this went into new road construction. The implied demand for
universal use of rubberized hot mix is about another 170 million tires
for that year.' The rate of use in subsequent years would depend on the
rate of highway construction. Field testing of this process is needed
to evaluate its technical performance and the relevant benefits and costs.
Stress Relieving Interface - A stress-relieving interface is a layer of
rubberized asphalt (asphalt, rubber, and sand in equal proportions) laid
over old wearing courses to prevent cracks in the pavement from propagating
through to a new overlay. This interface would be 1/4 to 3/8 in. (6.35 to
9.53 mm) thick. Where it has been tested, it has been shown to be effec-
tive, with a 1/4 in. (6.35 mm) layer resulting in a 440 percent improvement
in road deflection before cracking.
This interface stabilizes old bases and creates additional savings by
reducing the required thickness of a new overlay (usually 3 to 4 in. or
76.2 to 101.6 mm) for example, with a 1/4 in. (6.35 mm) interface, only
1 to 1 1/2 in. (25.4 to 38.1 mm) is needed. Neither potential demand nor
the net benefits of scrap tires have yet been evaluated, but both are
probably substantial.
Road Dressing - EPA has sponsored research on the use of scrap tires in
asphaltic emulsions for highways, driveways, parking lots, etc. The
7Note that universal use of rubberized asphalt in both repair-maintenance
and asphaltic concrete implies a scrap tire utilization rate of 280 -
290 million tires, exceeding the supply for 1973.
13
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purpose of the research was to demonstrate the feasibility of the method
rather than to optimize its techniques or to calculate its potential use,
benefits, and costs (12). If such rubberized emulsions were universally
adopted, a significant percentage of scrap tires could be utilized. It
has not been possible to obtain exact data on annual production of
emulsions for these purposes, but Census figures indicate that 19.5 million
barrels of asphaltic and coal tar emulsions were produced in 1972. These
figures would imply a potential demand for about 27 million tires if
rubberized emulsions were used exclusively. This figure should probably
be considered an upper limit, rather than an estimate of a probable demand.
The EPA research shows that these rubberized emulsions have performed
better than control tests, and though the relative benefits have not yet
been evaluated, they have improved as a result of fossil fuel price
increases. This use of scrap rubber would probably produce positive net
benefits.
Impediments to Increased Use of Rubber Additives in Road Building Materials
Technical Barriers - Despite the fairly long history of testing and
experimentation with rubber additives, scrap rubber has not been tested
enough to resolve all technical problems. There is a variability of
experience with the material that is presently unexplained, even within
an area such as Phoenix, where there has been much experience with the
material. Such factors as climate, asphalt hardness and traffic condi-
tions can be expected to determine the performance of the material.
14
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Also, little is known about the mate.rial in asphaltic concrete. There
is a need for more systematic research in the area and for demonstration
of the technique in order to gather valid data on technical performance
and its determinants so as to reduce or eliminate these barriers.
Economic Barriers - Two principal impediments to increased rubber additive
use are economic in nature, and these are related to economic behavior and
the availability of information rather than to costs per se. Despite the
demonstrated technical feasibility of the material in at least some uses,
the most immediate barriers to wider use seem to be: (a) the near total
lack of information on net benefits (relative benefits and costs) showing
the increase in community welfare that would result from the use of the
additives, and (b) the great reluctance of highway administrators to take
risks in innovative situations. The two factors are, of course, related.
As long ago as 1966, the National Asphalt Pavement Association and
officials in several state highway departments noted that the lack of
benefit-cost information was a barrier to the increased use of additives.
Rubber-reclaiming industry officials also indicate that the rubberized
test strips are often not followed by economic evaluation, or even tech-
nical evaluations in some cases. The development of such benefit-cost
information should go a long way toward overcoming the resistance of
highway departments to the use of rubber additives.
A related factor is that because roads are publicly provided, the agencies
involved are not subject to the disciplines of the market place, and
15
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therefore do not face strong incentives to pursue economic efficiency
in road provision. As a consequence, they tend to be less inclined to
pursue potential cost-reducing innovations, especially when moderate
amounts of risk or uncertainty are involved.
TIRE CONSTITUENT RECOVERY
There are a number of processes, some proven and some not, to which a
scrap tire can be subjected to recover or reuse the materials contained
therein. These include reclaiming, destructive distillation, preparation
of feedstock for carbon black furnaces, and heat recovery. Each of these
is in different stages of development and operation, and their economic
potentials vary as well.
Rubber Reclaiming8
In the United States, the rubber reclaiming industry consists of 14
different companies and 18 plants (at last count). Its principal products
are ground or crumb rubber (not devulcanized), devulcanized crumb, and
sheeted reclaimed rubber. These products are used in new tire compounds,
adhesives, wire and pipe coverings, rubberized asphalts, and tars, among
others.
As Tables 1 and 2 show, the industry has been experiencing a decline in
demand for its products. Though further study of the causal factors of
o
This industry has been the subject of past EPA sponsored research,
which we summarize here. See (1).
16
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TABLE 2. CONSUMPTION OF RECLAIMED TIRES BY PRODUCT
Pounds and kilograms of reclaimed tires consumed
1960
1967
1968
1969
Tire & tire repair material 380.6 (172.6) 364.3 (165.2) 385.3 (174.7) 377.4 (171.2)
Innertubes
Auto material
Hose, belt
Cements & dispersions
Heels and soles
Hard rubber
Rubber surface
All other
TOTAL
104.8 (47.5)
17.0 ( 7.7)
26.2 ( 11.9)
22.9 ( 10.4)
15.2 ( 6.9) 30.0 ( 13.6) 18.6 ( 8.4)
55.8 ( 25.3) 57.6 ( 26.1)
36.1 ( 16.4) 26.2 ( 11.9) 24.9 ( 11.3)
8
14
.7 (
.3 (
4.9 (
11.0 (
3.9)
6.5)
2.2)
4.9)
11.4
7.4
5.1 (
12.1 (
,2)
.3)
.3)
,5)
55.3 ( 25.1)
31.8 ( 14.4)
15.7 ( 7.1) 16.4 ( 7.4) 18.4 ( 8.4) 19.7 ( 8.9)
5.6 (
6.7 (
3.3 (
8.3 (
5)
0)
5)
8)
655.9 (297.5) 548.6 (248.8) 575.7 (261.1) 559.6 (263.8)
Source: Reference 1, p. 60.
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this situation is needed, the relative long-term decline (until 1973) in
the price of petroleum from 1950 to 1971 (see Figure 1) and increasingly
stringent tire compounding requirements for longer-lived belted and radial
tires probably figure strongly in this trend. Furthermore, the technology
for efficiently processing steel-belted tires has not yet been developed,
and the reclaiming companies must landfill them. Of the required technol-
ogy that is currently under development, a cryogenic process is prominent.
If the demand increases for rubber as an asphalt additive, it will be the
reclaiming industry that supplies the granulated rubber. The continuing
shift of tire production to steel-belted radials may present at least some
impediments to increasing the supply of ground rubber for such uses, but
industry officials feel that this will not be a long-term problem. The
industry now has excess capacity for granulating scrap tires as. a result
of the decline in demand for its products.
Destructive Distillation
Destructive distillation is a pyrolysis technique that is designed to
recover carbon black, gases, and oils from scrap tires. The initial
research on this process for tires was conducted by the Bureau of Mines
under the sponsorship of the Firestone Tire and Rubber Company (6), which
has continued the work in its own facilities (13). The process has been
developed to the point that a general purpose furnace black (GPF) can be
recovered from the char produced by the distillation, and the oil and
gases utilized for their energy content.
18
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Company officials indicate that the process now generates a slight profit,
but that the high cost of capital is a current impediment to the construc-
tion of commercial scale facilities. Data are unavailable for assessing
the relative benefits and costs of the process and its economic potential.
Carbon Black Recovery
Two additional technologies have been suggested as methods of recovering
the carbon black in scrap tires for use in tire compounding. One method
has received preliminary research attention (4) and is accomplished by
hydrogenating ground scrap tires to produce oil, gas, and solids. The
other is a proposed technology that consists of converting ground scrap
tires into a feedstock for a carbon black furnace.
In terms of materials balances, the hydrogenation process produces carbon
black at about 35% of the weight of the ground tire feed. The gas frac-
tion produced has a heating value of 1065 BTU/SCF, which is comparable
to natural gas.
The results of tests using the recovered carbon black in tire compounding
recipes indicated problems with respect to slow curing of the tires and
low elasticity; the latter was probably due to the presence of contami-
nants. A low pressure (new technique) carbon black recovery system has
also been suggested with an expected profit per ton of $14, or 14c per
tire and 55$ in average revenue. These estimates are based on a number
of assumptions concerning scrap tire availability, a factor subject to
variability and transportation cost barriers.
19
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The second proposed technology for carbon black recovery is the prepara-
tion of a feedstock slurry for a carbon black furnace with ground scrap
tires and conventional feedstock oils. There are unresolved technical
problems to be overcome.
If it is assumed that 50% of the carbon contained in a tire (40% by tire
weight) can be recovered, then a 20 Ib. (9.07 kg) tire is worth about
$.88, valued at a carbon black price of llf per lb.(24£ per kg). The
current cost of crumb rubber production is 6c to 10c per Ib. (13c to
24c per kg), which would generate a net value of $-.0013 to $-.04 per Ib.
($-.0028 to $-.088 per kg) or $-.62 to $-.02 per tire. The most accessible
carbon in a tire is the elemental carbon, 27.5 percent by weight. Using
this figure, the 20 Ib. tire is worth $0.61, yielding a net loss of
$-.29 to $-.81 per tire.
Energy Recovery Through Incineration
There are essentially two technologies available to recover energy from
scrap tires (excluding pyrolysis): specially designed boilers with heat
recovery equipment, and coal-fired boilers in power plants. Both have
received some use and experimentation.
The specifically designed equipment must be operated at a cost premium,
estimated to 24£-40
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on capacity utilization, discount rates, and the value of steam (calculated
for early 1973). The lack of a net profit is greatly influenced by the
relatively high capital costs, which are necessitated by a special design
to withstand the concentrated thermal value of whole tires, and by the
need to control heavy emissions.
A lower cost alternative is to shred tires and mix them in with the feed
to a coal-fired (grate type) boiler. The General Motors Corporation has
been charging one of its coal-fired boilers with 10 percent shredded scrap
tires of 1 in. (25.4mm) size. The rubber is delivered at $24 per ton,
contrasted with $40 per ton for low sulfur coal. At these prices, coal
costs $1.60 per million BTU's; using these figures, the energy value of
rubber in scrap tires is about 2.2c/pound, or 40c for an 18-pound
debeaded tire (55f for 25 pounds, 66c for 30). The net value of the
energy content (neglecting any additional capital and operating costs)
is 57
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as the supply price of scrap rubber is an increasing function of the
quantity for large recovery and reuse operations. Consequently, an
extensive use of scrap tires for energy recovery would tend to diminish
the net benefits of the process. Continued use of the material for
this purpose is justified, however, where there are no superior alter-
natives.
Artificial Reefs
For some years, scrap tires have been ballasted and sunk in off-shore
sites on the continental shelf, both singly and banded together. These
tires form artificial reefs that provide habitats for reef fishes, and
provide feeding grounds for large game fishes. The principal benefits
accrue to the sports fishery industry (14). The value of these benefits
is not known, but could be measured.
Costs have been estimated to range from 34c to $4.14 per tire placed in
a reef ($31 to $376 per ton for 22-lb. tires, $34 to $414 per metric ton
for 10 kg tires). The variation in cost is due to the process and number
of tires in a unit.
Laboratory testing with live fish has indicated that the tires are inert,
with no toxic chemicals leaching out.
Tire Retreading
In 1963, approximately 25 and 32 percent of passenger and truck tires,
respectively, were retreaded; by 1968, these figures had fallen to 17
and 28 percent, although the absolute amounts had increased slightly.
22
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Retreaders indicate that about 35 percent of the tires they receive are
retreadable, so chat this constraint is not binding and not currently a
cause of low retread rates. Furthermore, the contraint itself is a
function of tire use practices, as the Army, for example, retreads about
80% of its vehicle tires.
The principal impediments to increased retreading appear to be (a) direct
competition with low-priced third and fourth line new tires (probably a
result, until recently of the long-term decline in the relative price of
petroleum) and (b) consumer resistance to retreads stemming from the
belief that they are inferior, and (c) in the long run, a high percentage
of damaged carcasses, especially overworn treads.
Figure 1 presents some evidence on the relative movements of wholesale
prices for crude petroleum and new tires compared with the Consumer Price
Index. The hypothesis here is that the long-term decline in relative
crude oil prices has in part caused the demand for retreads relative to
new casings to decline. In addition, the long-term decline in real
gasoline prices affects tire use and reuse by operating on both new car
production and demand (vehicle registrations per person) and on the rate
of vehicle use (miles driven per vehicle). An adequate test of these
propositions is needed, but the recent increases in petroleum prices can
be expected to increase the demand for retreads relative to new casings.
Much of the belief that retreads are inferior probably derives from
personal observation of separated retreads along highways. Recent
23
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RATIO
OF
PRICE
INDEXES
1.1
1.0
.9
.8
.7
,NEW TIRES
CRUDE PETROLEUM
1950
1955
1960 1965
1970
FIGURE 1: RELATIVE WHOLESALE PRICE MOVEMENTS AS PERCENTAGE
OF CONSUMER PRICE INDEX FOR NEW TIRES AND CRUDE
PETROLEUM, 1950 TO 1971. (COMPUTED FROM THE
STATISTICAL ABSTRACT OF THE UNITED STATES,
1969 AND 1972.)
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research suggest that most of this is- from truck tires, and that 34
percent of truck tires and 50 percent of passenger tires accounting for
the separated treads were new tires, not retreads. The reasons for tread
failure are not well understood, and are as related to conditions of
utilization (maintenance, road hazards, overloads, misapplications) as
they are to retread manufacture, if not more so. These factors are
currently being investigated by EPA.
Benefits and Costs of Increased Retreading - If we assume that the
performance of a retreaded tire is equivalent to that of a new first or
second tire in less than the most demanding situation (e.g. off-the-road
uses), then one retreaded tire will replace a new tire, and save the extra
resources which are employed in the construction of a new carcass. A new
glass-belted tire varies in price from about $31 (size E-78) to $40 (H-78),
and the same carcass with a retread between $17 and $20 (federal tax
included on both). With these figures, the net dollar advantage to the
consumer of a retread purchase is $14 to $20 per tire. Ignoring (for the
lack of information) any extra environmental insults from tire retreading
compared to new tire construction (there are likely to be fewer), and
assuming that the current price of petroleum reflects its conservation
value, then the $14-$20 net savings represents the social value of tire
retreading.
Rubberized Asphalt and Retreading Trade-offs - At first glance, it would
appear that retreading and rubberized asphalt represent competitive uses
25
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of scrap tires. However, since tires cannot be retreaded indefinitely,
the allocation problem is only one of choosing the proper sequence of
scrap tire use, rubberize asphalt now, or retread now and rubberize
asphalt later. The same consideration applies to the other destructive
uses of scrap tires: energy recovery, carbon black recovery, etc.
Thus, the problem is one of determining whether the benefits of
retreading are greater than or less than the costs of deferring the
alternative use (road applications) of scrap tires. It is a relatively
simple matter of comparing the benefits of retreading against the present
value of the postponed rubberized asphalt benefits. As indicated above,
the benefits of retreading vary from $14 to $20 for the tire sizes
indicated, which are 93<: to $1.33 per Ib. ($2.05 to $2.93 per kg) of
usable rubber in an average tire (15 Ibs. (6.8 kg) taken as the average).
The calculated benefits for rubberized chip seals were 62c per Ib. ($1.37
per kg) at a 10 percent discount rate and 75c per Ib. ($1.65 per kg) at
6 percent rate. Thus, retread benefits are seen to outweigh rubberized
asphalt benefits and, other things equal, retreading should precede
rubberizing asphalt. This remains true even in the case where the only
alternative to rubberized asphalt is a much more expensive road recon-
struction. In that case, the benefits attributable to rubberized asphalt
were the alternative costs prevented, which were $3.24 per Ib. ($7.14 per
kg) at 10% and $2.05 per Ib. ($4.52 per kg) at 6%. The cost to be compared
to retreading is the present value of the cost of waiting or the present
value of the interest (return on investment) foregone. This is 69
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Ib. ($1.52 per kg) at 10% and 44
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CRITERIA FOR CHOOSING TIRE REUSE AND RECYCLING ALTERNATIVES
GENERAL CRITERIA
Employing resources in ways that lead to maximum net benefits is a
general objective that is widely subscribed to. The application of
this decision rule means finding both the set of market arrangements
and the technologies that lead to a maximum excess of benefits from
materials use (based on consumer preferences) over costs. Figure 2
illustrates this proposition schematically for tire use and reuse.
There are three steps in this decision rule.
1. For any use and level of use (rate of production) of tires
(new and scrap), find that set of technologies which
minimizes the cost of production. This is shown by total
and marginal or incremental costs (TC* and MC*) which
show production costs at a minimum. (This has not been
discussed in this report.)
2. Given the least-cost methods of production, find that
level of tire use for each alternative use that maximizes
the net benefits. This occurs at Q*, the optimal output.
3. For the subject of scrap tire uses, rank them by their net
benefits (cost savings) to determine the preferred uses of
scrap tires.
Actually, for step No. 3, the problem is more complex, because of
appropriate decision rule is to find the optimal combination of uses
28
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TOTAL
BENEFITS
AND
COSTS
MARGINAL
BENEFITS
AND
COSTS
TB
MILLIONS OF TIRES
Q* MILLIONS OF TIRES
FIGURE 2: MAXIMUM NET BENEFITS FROM
TIRE USE AND REUSE
29
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of scrap tires, and thus it is necessary to analyze the trade-offs in
net benefits among these uses. In this report, we have been able to
analyze somewhat only one of the trade-offs (rubberized asphalt versus
retreading) and suggest a tentative ranking by cost savings. A complete
analysis of the trade-offs would require more research.
Given that scrap tires will be generated, it is necessary to find those
uses of these scrap tires that yield the greatest cost savings, and
also to find those methods of production for processing scrap tires that
incur the least cost for a given level of use of each. Step No. 1 above
involves engineering and management efficiency, and Steps No. 2 and 3
entail economic efficiency, or efficiency in materials use.
The principal problem now confronting public decision-makers with respect
to scrap tires appears to be one of inadequate or nonexistent technologies
for tire disposal. On closer examination, however, the problem is rather
more one of the costs of managing or using the scrap tires. Some land-
fills around the country will accept tires after payment of a fee of
$2 to $3 per tire to cover the extra costs of shredding. The problem
is thus one of finding alternative uses for tires that yield higher flows
of benefits to society, and/or incur lower costs.
The presence of environmental quality problems associated with tire use
and discard leads one to examine first the sources of market failure —
that is, the reasons private markets do not seem to be able to produce,
distribute, use, discard, and dispose of tires in an environmentally
30
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acceptable manner. The apparent excess supply of scrap tires for disposal,
the deficient amount of retreading, and the possibly inadequate incentives
hinder the tire industry from harmonizing design, retreading, and reuse
practices (such as carbon black recovery for example). These factors are
related to both economic and engineering efficiency considerations.
Economic efficiency with respect to tire use in the context of the scrap
tire problem refers to the optimal (maximum net benefits) combination of
new, retreaded, and recycled tires, as well as appropriate incentives to
guide both the direction and pace of technological innovation and devel-
opment. These are questions of consumer and social preferences, and
opportunity costs. An opportunity cost is the value of benefits foregone,
and it is measured by the benefits in the next best alternative use of
a resource. (All costs arise from the fact that resources have alterna-
tive uses.) The entire cycle may be inefficient as it currently operates.
Engineering efficiency considerations, especially in the public sector,
are also the sources of impediments to improved tire reuse practices,
especially in road-building applications.
What factors in the operation of private markets lead to scrap tire
problems? Many of these are well known, but a review is useful as a
prelude to a future examination of possible ways in which to resolve the
problem. These factors include externalities, conservation, consumer
information, and lack of efficiency incentives in the public sector.
Each is discussed briefly.
31
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Externalities
Environmental quality problems that result from scrap tires occur through
aesthetic insult (littering) and landfilling of unshredded tires. Property
rights have not been established for scenic views, and thus are not "owned"
by anyone. As a consequence, those who impose costs on others by degrading
the environment are not made to pay for them. Furthermore, the ability to
avoid the costs of proper scrap tire management means that too many tires
move through the economy. This is a conclusion based on a simple supply
and demand analysis, as in Figure 3. The point P..Q.. represents equilibrium
in the tire market without environmental costs being explicit to the scrap
tire generator. A successful method of making these costs explicit to the
generator (as shown by the higher supply curve, S ) would tend to reduce
scrap tire generation in the aggregate by stimulating more retreading and
purchase of tires of increased durability.
The same analysis applies to making the costs of proper landfill practice
explicit to the tire discarder. Some communities now require that tires
be shredded before landfilling them, and that cost is included in the
tire price, although usually unknown to the consumer. This practice alone
would tend to reduce the demand for tires by also affecting choices
regarding product durability. Informing the tire consumer of the disposal
charges would produce even a greater effect. Of course, an explicit
disposal charge alone would stimulate self-disposal of tires and would not
be a method leading to a more efficient disposition of tires.
32
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PRICE
Q2 Q-i NEW TIRE PRODUCTION (MILLIONS)
FIGURE 3: IMPACT OF CONTROL OF ENVIRONMENT COSTS
ON NEW TIRE PRODUCTION
Conservation
Tires are made from nonrenewable resources, or resources renewed at an
infinitely slow rate. We know from purely a priori reasoning that the
unadjusted market mechanism does not make adequate provision for the
future. For the present use of resources to reflect both present, near
future, and distant future values, it is a necessary condition that
future generations participate in current decisions, an obvious impossi-
bility beyond the most immediate future generations. Future values
therefore cannot be adequately reflected in present decisions except by
chance. Thus, the market mechanism probably assigns sub-optimal prices
to resources, leading to over use.
Consumer Information
For completely rational choice to occur (consumer decisions leading to
maximum net benefits from materials use and reuse), there must exist
adequate information about the costs and benefits of all alternatives,
33
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abstracting from uncertainty. With respect to retreaded tires, although
the technology could be improved, properly retreaded tires for most
conditions may already perform adequately at a lower cost. In fact,
retreaded tires are usually given a new tire warranty against tire failure
by the major tire companies.
In general, consumers do not have adequate information about retread
performance. There is a need to develop this information and disseminate
it to consumers.
In purely a priori terms, it is possible to argue that the pace of techno-
logical progress in retreading has been slower than it should be, although
by no means has it been at a standstill. A very large market for retreaded
tires would shift demand away from new tires, which would be counter to the
self interests of the tire and rubber industry and associated labor.
A principal reason for the lack of a strong market for constituent materials
in tires appears to be that, for a given material quality, the cost of
production from virgin materials has been lower than that from reclaimed
rubber, as suggested by the crude petroleum price trends in Figure 1.
This trend is also much related to the trend and pace of technological
progress in both new and reclaimed materials production, especially with
respect to steel-cord tires.
Another important impediment to the use of tire constituents is the lack
of strong incentives in the public sector for tire reuse, especially in
road-building applications.
34
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Relationship to Automobiles
Tires are complements to automobiles, and the rate of tire production
is strongly related to vehicle production. If vehicle production is
excessive because of uncompensated environmental costs (air, water and
land discharges), then tire production and use will be too. Control of
vehicle-induced environmental problems will lead to lower tire demand
and a lessening, finally, of the tire disposal problem. Similar conclusions
would apply to the elimination of the tax subsidies to mineral extraction
operations, and recently increased petroleum prices. Also, as shown
earlier, the long-term decline in the relative price of crude oil has
probably served to stimulate tire use by leading to more automobile
ownership, greater use and operation at higher speeds. The increase in
the real price of petroleum will tend to slow down and perhaps reverse
these trends, with decreased tire demand, and increased tire longevity
as the results.
In summary the uncorrected market and price mechanism can lead to a
scrap tire problem and to a lack of autonomous private solutions. If
some or all of the above factors were corrected, there would be more
use of longer-lived tires, more retreading, and more reuse of tire
materials in other applications.
Encouraging Tire Recovery and Reuse
In the first part of this report, the various ways in which tires can be
reused were reviewed. The uses represent the ways in which an effective
demand for scrap tires can be established if the processes lead
35
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to increases in net benefits. We have also reviewed the general criteria
for choosing these alternative methods, and explained why the generation
of scrap tires is larger than it ought to be, given that environmental
quality is itself scarce and valuable. The preliminary evidence suggests
that the maximum contribution to net benefits from tire reuse will occur
either by retreading and then eventually using the scrap tire in rubberized
asphalt application, or by bypassing the retread operation and using tires
directly in paving. The decision rule depends on the expected savings from
road applications, which depend on the complexity of future resurfacings
that are avoided, on the discount rate and on relative petroleum prices.
The preferred rankings after that (reefs, carbon black recovery, or energy
recovery) are not very clear at this time; nor is it clear at this juncture
how much rubberized asphalt should be produced. Table 3 summarizes these
net benefits.
In an earlier discussion, we suggested that policy actions that control
externalities in tire disposal, increase information to consumers and to
State departments of transportation, and which eliminate tax advantages
in resource extraction will contribute to both increasing the demand
for scrap tires in resource recovery uses, and to reducing the excess
generation of scrap tires. With respect to the latter problem, the
only real choice available to producers and consumers of tires is that
of choosing between new replacements and retreaded tires in production
and consumption. The principal policies available for optimizing this
latter combination appears to be (a) consumers' information (b) explicit
disposal charges on nonretreadable tires (with a possible exemption from
36
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TABLE 3. SUMMARY OF RELATIVE NET BENEFITS OF
SCRAP TIRE USE ALTERNATIVES
(per tire)
Alternative use
Net benefits
($)
Rank
Retreading
Road building uses
Seal coats
Joint and crack filler
Asphaltic concrete
Strain relieving
interlayer
Emulsions
Hydrogeneration
Energy recovery
Carbon black feedstock
Destructive distillation
Artificial reefs
14-20
9.30 - 48.60
4.35
N.A.
N.A.
N.A.
0.14 (?)
0.14
-.62 to -.02
slight profit
N.A. (costs from 0.34
to 4.14)
1 or 2
I or ?.
3
4 or 5
4 or 5
6
37
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the charge if a retreaded tire is purchased), and (c) deposits on tires
to avoid indiscriminate dumping. The relative effectiveness, efficiencies,
and net benefits of these instruments have not yet been determined.
Recommendations for Further Research
While research on all of the technologies discussed in this report could be
expected to produce positive benefits, the analysis here suggests that the
highest payoffs to additional research expenditures would accrue with
respect to rubberized asphalt, retreading, and incentive mechanisms to
improve the functioning of tire markets.
Rubberized Asphalt - The most immediate research need in this area is to
develop consistent and articulated technical and economic data on the
performance of rubberized asphalt under various climatic and traffic condi-
tions. This would require gathering a sample of data from controlled field
tests. The greatest potential payoffs would appear to be in the order
of chip seals, joint and crack filler, emulsions, and asphaltic concrete,
given current states of knowledge.
Retreading - Information is needed on the precise performance limitations
of retreaded tires and on the factors which influence trade-offs with
other reuses, such as asphalt additives.
Incentive Mechanisms - Analysis is needed of the nature, ramifications,
and economic implications of alternative mechanisms to make all tire use
and reuse or disposal costs explicit to tire users in order to rationalize
38
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tire use and reuse, especially the new replacement-retread choice.
Included here should be analysis of such systems as information provi-
sion, deposits, disposal charges, leasing arrangements, and tire clubs,
among others.
39
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REFERENCES
1. Rubber Reuse and Solid Waste Management, U.S. EPA, 1971.
2. Tire Recycling and Reuse Incentives, U.S. EPA, 1973.
3. Rubber - Asphalt Binder for Seal Coat Construction, Federal Highway
Administration, 1973.
4. Study of the Technical and Economic Feasibility of the Hydrogenation
Process for the Utilization of Waste Rubber, U.S. EPA, 1972.
5. A Systems and Methods Analysis of the Reuse of Consumer Rubber Goods,
Rubber Manufacturers Association, 1971.
6. Destructive Distillation of Scrap Tires, U.S. Bureau of Mines, 1969.
7. McDonald, Charles, H., "Rubberized Asphalt Pavements," presented at
the 58th Annual Meeting of American Association of State Highway
Officials, November 1972.
8. Allison, Kenneth, "Those Amazing Rubber Roads," Rubber World,
March/April 1967.
9. Hot Mix Asphalt Plant and Production Statistics, National Asphalt
Pavement Association, 1972.
10. Private Communication with New York Thruway Authority.
11. Stevens, Jack E., :'The Effect of Reclaimed Rubber on Bituminous
Paving Mixtures," University of Connecticut, March 1974.
12. Scrap Rubber Tire Utilization in Road Dressings, U.S. EPA,
Cincinnati, Ohio, March 1974.
13. Beckman, J. A., Crane, G., Kay, E. L., and Laman. J. R., "New
Use for Scrap Tires," Rubber Age, April 1973, pp. 43-48.
14. Scrap Tires As Artificial Reefs, EPA Report SW-119. 1974.
40
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TECHNICAL REPORT DATA
(Please read Instructions on the reverse before completing)
1. REPORT NO. 2.
EPA-600/5-75-019
4. TITLE AND SUBTITLE
AN ECONOMIC EVALUATION OF TECHNICAL SYSTEMS FOR
SCRAP TIRE RECYCLING
7. AUTHOR(S)
Haynes C. Goddard
9. PERFORMING ORGANIZATION NAME AND ADDRESS
Municipal Environmental Research Laboratory
Office of Research and Development
U.S. Environmental Protection Agency
Cincinnati, Ohio 45268
12. SPONSORING AGENCY NAME AND ADDRESS
Same as above
15. SUPPLEMENTARY NOTES
3. RECIPIENT'S ACCESSION-NO.
5. REPORT DATE
December 1975 (Issuing Date)
6. PERFORMING ORGANIZATION CODE
8. PERFORMING ORGANIZATION REPORT NO.
10. PROGRAM ELEMENT NO.
1DB314
11. CONTRACT/GRANT NO.
13. TYPE OF REPORT AND PERIOD COVERED
In-house, Final
14. SPONSORING AGENCY CODE
EPA-ORD
16. ABSTRACT
A technological and economic assessment is made of alternative technologies to
recover the waste rubber in scrap vehicle tires. The principal technical alter-
natives evaluated are ground scrap rubber as an asphalt additive, retreading,
energy recovery, and carbon black recovery. The greatest potential benefits are
seen to occur with retreading and asphalt additives, followed by carbon black and
energy recovery.
17. KEY WORDS AND DOCUMENT ANALYSIS
a. DESCRIPTORS b.lDENTI
Scrap Scrap
Waste Solid
Automobile tires Rubbei
Economic analysis
Materials recovery
Asphalts
18. DISTRIBUTION STATEMENT 19. SECUF
t
RELEASE TO PUBLIC SO.SECUI
I
FIERS/OPEN ENDED TERMS C. COSATI Field/Group
tires
wastes 5C
rized asphalt 11J
=
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U.S. ENVIRONMENTAL PROTECTION AGENCY
Office of Research and Development
Technical Information Staff
Cincinnati, Ohio 45268
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