Danish tire recycler Genan expects to break ground before the end of the year on a scrap tire processing plant in Houston, Texas—the first U.S. plant for the self-proclaimed world’s largest tire recycler.

Director of Business Development Lars Raahauge told the Cleantech Group that Genan is waiting on permits for the plant with the capacity to process 65,000 metric tons of scrap tires each year.

The process has several outputs that can be sold. Each tire is deconstructed into 67 percent rubber granulate or powder, 18 percent steel, 14 percent textiles and 1 percent waste. The textiles are burned to produce energy.

Recycling prevents the harmful environmental effects from improper disposal while displacing the need for virgin rubber, Raahauge said. Recycled rubber can be made into artificial turf, athletic fields, thermal and acoustic insulation, roads, and playgrounds (see Saving the planet, one tire at a time?).

“It’s a very dull and simple thing, but very important,” Raahauge told the Cleantech Group.

Raahauge noted that tires are made from the best rubber, steel and textiles because manufacturers can’t risk compromising safety. The products are very valuable for resale, and the economic case is made better by government regulations that pay recyclers for proper disposal. In addition, the process of getting government funds is much easier for a recycling business, he said.

As a result, Raahauge said, there have been a number of tire recyclers to emerge and fail in recent years, but he said Genan has an advantage because it has 20 years of proven technology with a highly automated process that produces clean, uniform materials. A large plant, such as the one proposed in Texas, running 24/7 would require about 30 employees.

Genan, which has 120 employees, is profitable and has no global competitors, which is why the company is planning a massive expansion now, Raahauge said.

Genan plans to build 15 large recycling plants across the globe, with each costing €53 million ($78.8 million). That would give Genan the capacity to process 10 percent of all scrap tires each year in the world by 2018. Genan says it can process all types of tires.

The U.S. and Europe each account for a third of the estimated 13.5 million metric tons of scrap tires each year, Raahauge said.

Genan opened its first recycling plant in Denmark in 1991, and it now processes 85 percent of the country’s scrap tires. It has two plants in operation in Germany, with a third, in Bavaria, expected to come online in the first quarter of 2010 to process 230,000 metric tons of scrap tires per year. The three German plants together are expected to have the capacity to process 34 percent of Germany’s scrap tires.

Of the 15 planned plants, three are set for Europe. Genan plans to finance its expansion by taking on debt of about 35 to 40 percent of the overall cost from foreign banks, but the company could also fund two to three plants outright, Raahauge said.

Genan has solid financial footing since its founder and owner Bent A. Nielsen sold 48 percent of the company in 2006 to a group of Danish pension funds, PKA.

Genan recently launched a new product in Europe with Germany’s Evonik. Dubbed Road+, the asphalt replacement combines 100 parts of Genan’s rubber powder with 4.5 parts of Evonik’s Vestenamer product. The companies plan to launch the product soon in the U.S.

Genan harvests rainwater to clean the tires, then recycles the water. Proprietary machines take apart the tires, providing uniform granularity in products, Raahauge said.

“We don’t have one big secret; we have 1,000 small secrets for the machinery,” Raahauge said.

Genan says recycling presents a much more efficient use of the raw materials than other common disposal methods, including energy recovery, retreading, exporting, landfills, and civil engineering.

According to Genan:

• Retreading is manual labor intensive, and expensive, since new tires can often be made as inexpensively, Raahauge said.
• Tires exported to developing countries are often re-used, which compromises safety. After a short period of use, the tires must be disposed, but developing countries often lack the infrastructure for proper disposal. The Basel Convention is discussing solutions to this problem.
• Civil engineering repurposes tires in artificial reefs, drainage layers of landfills, and building projects. Raahauge said this method doesn’t separate the steel, which can dissolve with rainwater, migrating into underground water supplies. In addition, the raw material is not reused in a way that harnesses its full value, Raahauge said.
• Energy recovery, or incineration, is one of the better alternatives but still inefficient, Raahauge said. Only one sixth of the oil that goes into the tire can be harnessed through this method. Currently 39 percent of tires in Europe and 51 percent in the U.S. are eliminated this way.

“It’s much better to incinerate the tire and get the fuel and heat than it is to place the tires in landfills,” Raahauge said. “But a much better solution has come up: material recycling.”