Transcript Progressing towards End of Life Tyre Stewardship in NZ Update for Environmental Protection Committee; 11 August 2015 Adele Rose, CEO 3R Group Ltd Tyrewise.

Progressing towards End of Life Tyre Stewardship
in NZ
Update for Environmental Protection Committee; 11 August 2015
Adele Rose, CEO 3R Group Ltd
Tyrewise Working Group Facilitators
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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The journey to date
June 2011….
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
2
Situation NZ – Market Failure
Management and disposal of End of Life Tyres
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3.5 million passenger tyres
400,000 commercial tyres
Some success – but need systematic nationwide approach
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Tyre piles (unmonitored, unconsented, flight risk)
Poor disposal practice (illegal dumping, acceptance at landfill)
Access & transport issues (Cook Strait)
Industry motivated to develop an accredited product stewardship programme
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Provided it was mandatory
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Required legislative test
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
3
Breakthrough March 2012
Industry stakeholder coalition formed
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Recommendation to Minister for the Environment outlining process to develop PS for ELT
Systematic approach required
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7 Milestones to be completed by August 2013 including Business Plan and Cost
Benefit Analysis/Financial Modelling for future scheme
Looking for robust, evidence based, industry led solution that
Government could support
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Local Government New Zealand
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Central Government (Ministry for the Environment)
Keen to draw on international experience
•
WBCSD
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Canadian programmes & others
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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Objectives
Development of a PS Programme for the recovery & safe disposal of ELT
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Benchmark against world best practice standards in support of:
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reduced waste & risk of environmental harm
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support export trade
Specific objectives for programme design:
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Auditable process;
• independence between funders, managers & operators
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Economic drivers;
• develop new markets from initial processing or value add & new recovery routes
• support research and development programs
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Regulatory
• address local and central government legislative and environmental obligations
(Local Government Act & Waste Minimisation Act 2008)
• proposal for robust regulation to prevent free-riders, longevity of ELT
management, decreased cost of ELT stewardship
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
5
Where we landed
August 2013 ….
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
6
Improving the value for end of life tyres in cost effective and
environmentally sound ways
Tyrewise is a ……
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National mandatory product stewardship programme for end of life tyres (ELTs), enabling
all New Zealanders access to safe and environmentally compliant recovery of ELTs.
Advanced disposal fee placed on point on import (loose tyres) and first registration
(vehicles)
The programme
•
is more than just a recycling programme - the whole of the supply chain - from tyre
manufacturers and distributors, through to end use processors, are actively
involved in the design of the programme, funding, marketing and operational
elements
•
reduces environmental harm by providing a sustainable alternative to ELTs entering
landfills, and by removing the motivation for illegal dumping and stockpiling.
•
incentivises efficient recovery of ELTs via a network of registered providers and
supports industry to find alternative and beneficial uses for the collected materials.
•
educates on responsible disposal of unwanted tyres
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
7
Supply Chain - Summary
Registered Tyre Importer
Registered Transporter
Consumer
Registered Processor
Registered Generator
Registered Manufacturer
Registered Collection Site
End use product
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Preferred Advanced Disposal Fee Model
Preferred Model NZ ELT PS Scheme Year 0 – 3
Brand owner/first importer for loose tyres & at first registration for tyres on vehicles
Customs
Report Tyres Imported and collect and remit Fee on
behalf of tyre importers
Importer Casings for
Retread
Importer New Tyres
Importer Used Tyres
Importer New Vehicles
Importer Used Vehicles
Vehicle Dealer
behalf of Vehicle importers
Customer Used Tyres Arise
NZTA
Vehicle Registration
Registered
Collection
Points
Registered
Generators
Receive Collection Site allowance
Report Tyres Collected
Waste
Report Tyres transported
Registered ELT Transporter
Receive Transport incentive
Report Sales of Tyre derived products
Registered Processor
Whole Tyres
Processor
Retreading
Registered Processor
Shred/Crumb
Receive Processing Incentive
End Use
whole
tyres for
on farm
use
End Use
Export
Whole
tyres for
reuse
End Use
Export
whole
tyres for
Fuel or
Material
Recovery
Crumb in
Destructive
Process
Tyre Derived Fuel
(TDF)
Mining
KEY
Crumb in
Secondary
Process
Pyrolysis
Grey oval denotes participants
in PS Scheme
Other future uses that may
be approved by the PSO
Denotes cash
flows and
reporting obligations
Crumb as additive
in product
Adhesives
Playground Surfaces
Artificial turf
Carpet Underlay
Mats Flooring
Rubber Asphalt
Moulded Products
Roof tiles
Garden products
Acoustic Screens
Crumb as
Functional End
Use
Garden Mulch
Lawn
Equestrian Arena
Landfill
Engineering
End Use
Civil
Engineering
Tyre Bales
Drainage material
Retaining walls
Erosion control
Sub base roading
Marinas
Embankments
Noise barriers
Product Stewardship Organisation (PSO)
Report Tyres on 1st Registered
Vehicles and Collect Fee on
Tyre Retailer/Dealer
Report Sales
Tyre Derived Products
Receive
Manufacturing
Incentive
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Improving the value for end of life tyres in cost effective and
environmentally sound ways
A co-regulatory approach; the best outcomes include legislative and
regulatory support
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Using regulatory tools under the WMA2008 – priority product or product regulation
Landfill bans or restrictions on tyre disposal be enacted as tyre processing infrastructure
improves
Procurement policies that enable or incentivise use of tyre-derived product with
comparable performance and cost to virgin materials
Development of NES
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
10
MfE Waste Tyre Economic Research; Intervention options to promote
investment in on-shore waste tyres recycling
Authored by KPMG, 3R as partner to enable access to Tyrewise data
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Built on the Tyrewise work – the scope for Tyrewise did not cover in detail the propensity
for investment in ELT processing
• The KPMG report covered the economic drivers and barriers to investment in detail
• Identified and evaluated potential government interventions to address these
barriers
• Recommended strategies to implement suggested interventions
Did not bring forward any new data or previouslyy undiscovered options
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
11
Overview of Findings
Barriers to investment
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Limited addressable end use market size
Business models require scale
Insufficient funding
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
12
Overview of Findings
Future drivers and enablers of investment
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Expand waste tyre collection nationwide
Increase utilisation of existing processing
capacity and establish capacity in SI
Invest in scalable new manufacturing
options (end uses)
Develop an effective funding mechanism
that covers the full cost of collection,
processing and manufacturing
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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Overview of Findings
Intervention Options
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Key Levers;
• Additional Regulation and Enforcement
• Market Organisation
• New Funding Model
• Investment and Risk Mitigation
Option Evaluation
• Enhanced Status Quo – Quick Wins, enforcement of current legislation
• Free market with further regulatory protections – disposal limitations, reporting,
market led
• Mandatory Product Stewardship – Co-regulatory approach “Tyrewise Model”
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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Cost Benefit Analysis
KPMG Report
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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General
Projections
(Per annum)
Tyrewise CBA
Cost Assumptions (over 10 years
of CBA Analysis)
Benefit Assumptions (over 10
years of CBA Analysis)
NET PRESENT VALUE
Assumption Type
Base Case
(ref page 7)
Preferred Scenario
(ref page 8)
Alternative Scenario
(ref page 9)
Base year for data collection
2011
Evaluation period
Discount Rate
10 years
10 years
10 years
3.91%
3.91%
3.91%
Quantities of ELTs generated
62,000 tonnes, reducing by 1%
annually
62,000 tonnes, reducing by 1%
annually
62,000 tonnes, reducing by 1%
annually
Recycling Rates
18,000 tonnes/yr
29%
51,000 tonnes/yr
95% (Year 5)
29,000 tonnes/yr
58% (Year 5)
Land filling/Export:
38,000 tonnes
3,000 tonnes
21,000 tonnes
Illegal Dumping.
3,000 tonnes
0 tonnes
300 tonnes
Tyre Fires
4 fires per year
3 fires per year
3 fires per year
Tyrewise Fee/Advance disposal
fee
$23 million
$43 million (Yr1) to $14 million
(Yr10)
$32 million (Yr1) to $14 million
(Yr10)
Government Costs
$0
$3.2 million
$4.8 million
Business Cost (compliance +
capital investment)
$0
$47 million
$69 million
Illegal Dumping
(orphan tyres)
$16 million
$0
$0
Tyre Fires
$12 million
See benefit assumption
See benefit assumption
Landfill stability leachate issues
Not quantified
Not quantified
Not quantified
Public Health (mosquito borne
disease)
Not quantified
Not quantified
Not quantified
NZ 100% Pure Brand
$122 million (0.1% drop)
brand maintained
brand maintained
Market value of resources
$40 million
$83 million
$55 million
New industry and employment
$0
$207 million
$162 million
Benefits of tyre derived fuel
$0
TDF not in use
$42 million
$42 million
Benefits of rubber asphalt
$0
Rubber roads not in use
$3.2 million
Further benefits tbc by new
project
$3.2 million per yr
Further benefits tbc by new
project
Avoided costs illegal dumping
n/a
$16 million
$14 million
Avoided costs tyre fires
n/a
$3 million
$3 million
Avoided landfills operating cost
n/a
$24 million
$5 million
Avoided cost public health
liability – legacy tyres
n/a
Not quantified
Not quantified
Avoided cost to NZ’s brand,
tourism and export industries
n/a
$36 million
-$18 million
-$89 million
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
TWG Meeting with Minister for Environment, July 29th
In summary mandatory stewardship won’t progress
Barriers to implementation are:
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KPMG CBA shows NPV for mandatory stewardship is $16M & Tyrewise CBA shows NPV
for mandatory stewardship is $36M
• Scope for Tyrewise was different to scope for KPMG
• Has discredited the Tyrewise CBA
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Minister has suggested if the TWG wish they can come back with an explanation for the
variances
Insufficient data on the real cost to consumer should the fee be collected at point of import
as opposed to the retailer who takes off the tyre
• What will those retailers do with loss of profit?
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Minister has suggested if the TWG wish they can come back with a detailed impact of the
cost to consumers beyond stating that consumers are currently paying a disposal fee and
that an advanced disposal fee would replace this fee
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
18
Cont.
In summary mandatory stewardship won’t progress; barriers to implementation
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Unconvinced that markets for end use will develop; ELTs will always have negative value
• Awaiting feedback from NZTA about rubber in roading applications
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This requires significant technology investment AND a change in Government procurement
drivers to incentivise the use of rubber emulsifiers – roads are more expensive & last longer
Opened up WMF Round in October targeting development opportunities for ELT’s
Specifically the round will look for applications for end-of-life tyre projects to demonstrate:
• How the project will grow markets for end-of-life tyres, which could include research or
trials;
or,
• That the supply of tyres and associated end markets are confirmed.
Remains to be convinced that benefits to NZ exceed the cost of the scheme
• Data from 48 landfills that collect the $10/tonne levy show small volumes actually to
landfill (MfE informal survey)
• Small minority of tyres being illegally dumped or stored – no data to prove its not
the case
• Not actually a significant environmental problem
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
19
Cont.
In summary mandatory stewardship won’t progress; barriers to implementation
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Has advised he is not closed to the idea of mandatory stewardship, and the answer is not
yet a no, however based on information currently before him it will not progress;
He will review TWG feedback and come to a conclusion fairly quickly so as not to leave
everyone hanging
Water and Auckland housing are priority issues
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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So where to from here?
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Industry remain committed to mandatory stewardship however no funding now to
continue working with a current Government who does not appear to support the
industry model; for any scheme to be successful it requires co-regulatory support
Tyrewise working group remains intact representing all industry sectors including
Local Government (Brent Aitken, Taupō District Council)
3R continue to support industry and affected parties by maintaining the Tyrewise
website and Comms portal (560 registered parties)
3R working on tyre tracking software “Treadmarks” which will provide data from
collection to disposal; bringing a pilot group together over the next 12 months
Have offered to draft an NES for Tyres (would need funding, project headed by
Darren Patterson)
Supporting applicants to the WMF with data
Maintaining dialogue
www.tyrewise.co.nz | 0800 TYREWISE (0800 897 394) | [email protected]
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