CalRecycle Approves Five Year Waste Tire Plan

Tire derived product growth is a top priority

California’s new Five Year Plan for Waste Tire Recycllng focuses on permitting and developing a tire-derived product (TDP) infrastructure in California designed to foster growth in a diverse array of products, CalRecycle’s Sally French said at the agency’s March 19 meeting. The California Department of Resources Recycling and Recovery (CalRecycle) approved the plan at the meeting.

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The key change in the plan is the Tire Incentive Grant Program, French said It is planned as a pilot project to provide a total of $2 million in grants to manufacturers of new and innovative TDP products. The grants would allow the manufacturers to pass on all or a portion of their incentive payment as a price discount to the purchaser of their product. The incentive can also be used for specific TDP production or selling expenses such as: product development, testing and certification, marketing and increasing awareness of tire derived products in the marketplace.

Commenting on the Tire Incentive Program (TIP) Howard Levenson, Deputy Director of CalRecycle’s Materials Management and Local Assistance Division, said that CalRecycle hopes to stimulate new markets with emphasis on products which have not necessarily benefitted from the state’s traditional TDP Grant Program and/or feedstock conversion projects. He expressed confidence that the Program’s pilot status will ensure that it will be closely monitored for successes and failures.

Levenson summarized spending expectations under the five year plan noting that the total amount spent per year for all the programs in the Plan would be reduced to about $32.5 million, primarily because the state has reduced CalRecycle’s expenditure authority. In past years, funding for tire programs approached $40 million annually. According to the CA Tire Bulletin, the reduced funding may not change much in the near future because in 2015 the revenue from the fee on new tire sales is expected to drop to around $30 million annually from the current $40 million. California’s tire fee is set to go from $1.75 per tire to $0.75 on January 1, 2015, thus the drop in revenue.

It is also estimated that CalRecycle is owed about $27 million from the State Legislature from past loans. By law, the Legislature is required to repay all loans to state entities it borrows from. Additionally, CalRecycle has some “tens of millions of dollars” in its reserve Fund Balance. All told, the department may use some or all of the funds in the loans (once they are repaid) and its own reserves to bolster the reduced revenue from annual new tire sales, Levenson said.

© Scrap Tire News, April 2013