It is a fundamental mistake to equate the business cases and drivers of a tyre pyrolysis business with that of a waste-to-energy business. A waste-to-energy plant gains 60% of its revenue from gate fees and has an easy-to-sell product. A tyre pyrolysis project gains perhaps 10% of its revenue from gate fees and has specialist products. The emphasis in a tyre-pyrolysis project is therefore not on sourcing tyres but producing high quality products and securing offtake contracts.
In a typical waste-to-energy plant a tonne of RDF might secure a gate fee of £70. That tonne of waste will produce about 1MWh of electricity (13GJ/tonne/3.6 x 25% thermodynamic efficiency) at, perhaps, £40-£50 in power revenue. Product sales require just a grid connection and a power purchase agreement. A waste to energy project therefore gains about 60% of its revenue from gate fees and 40% from power sales. As the financial case is often marginal, such projects require long-term secured supplies of waste (say 15-20 years) to support finance.
The economics and drivers of a tyre pyrolysis project are fundamentally different. The products (oil, rCB, steel) will deliver a minimum of £300 per tonne of tyres. Taking into account the biogenic content of the oil, this could increase to £500 per tonne. Tyre gate fees vary, but £50 per tonne is a fair average over several years. Therefore, in a tyre project 70-90% of the revenue comes from product sales. In 2GBioPOWER’s financial models tyre gate fees are discounted completely. However products are specialist: the rCB needs to go back into the rubber sector and the oil through a full refinery process to deliver value. The focus on a tyre project is therefore on offtakes, not on securing tyres.
This is not to say that ensuring a tyre supply isn’t important, however at the time of writing Reuters had reported the UK as exporting 263.000 tonnes of tyres to India.