10 Appendix B: TyreTrack participation and review

The scheme is efficient and effective

The scheme has been operating for two years and has achieved a 30% uptake. It cannot be considered to be effective and efficient (as measured by diversion of tyres from landfill and illegal dumps) until there is significantly greater participation across the sector.

The scheme is stable and it can be assumed that the benefits outweigh the costs of running it. (The cost of running TyreTrack is $50,000 a year and its key benefits include better information about volumes and directions of tyre movements, education among tyre retailers, support for the collection industry and knowledge exchange in regards to end-uses).

Contains publicly reported, challenging, performance measures, quantifiable where possible

The scheme contains performance measures but they are related to the numbers of tyres tracked, not recycled.

Transparency

The scheme is very transparent and seems to be trusted by the industry, although there are some problems with non-disclosure to protect uncertain end-users.

Encourages market competition

The scheme encourages market competition by providing a better networking environment and distribution of information. This conclusion is only relevant for the 30% of the sector registered with the scheme. It encourages transporter and recycler competition.

Sets safe standards for collecting and handling

The scheme does not deal with standards for safe collection and handling. It has been recognised that health and safety is a problem and WasteMinz is preparing support brochures.

Forum for communication and industry-wide participation

The scheme provides a good forum for communication among industry members and for discussing issues with the Ministry.

Includes public information and education

The scheme has some educational components but these are deemed insufficient.

Includes provision for monitoring and reporting on effectiveness

The scheme allows good monitoring the flow of tyres registered under the scheme.

Compares favourably with international best practice

This scheme is restricted in scope when compared to international best practice. It does not divert tyres from landfill, it does not provide a mechanism to encourage development of end-uses and it does not embody concepts such as facilitating net-highest resource-value recovery of tyres.

Is compliant with international trade agreements

The scheme does not impact on trade agreements.

Cost of enforcement and management of free riders

There are no enforcement mechanisms and the problem of free riders is not managed, even though this problem is considered one of the key weaknesses of the scheme.

Internalise waste management costs

The scheme does not influence the distribution of waste management costs. At the moment these costs are carried by customers when replacing tyres or by councils when dealing with problems of illegal dumping or fires.

If customers are paying fees they are internalised.

Other issues raised by the stakeholders

Retailers are reluctant to provide information about the final destination of the tyres, as they want to protect the farmers and other end-users in case new legislation will force them to dispose of the tyres in a different way and lead to additional costs.

A large number of stakeholders see the scheme as a monitoring tool, but without the appropriate benefits of a full scale product stewardship programme.

There is no agreement whether the scheme should be enforced (disadvantages - administration costs, protection of farmers and other "suspicious" end-users; benefits - reduction of free rider problem of cost undercutting, increased volume of tyres recorded and available to end-users).

Other issues raised by the stakeholders (continued)

MTA should be more proactive in recruiting members.

There is no agreement in regards to who should cover the cost of disposal - producers and new tyre importers are in favour of an ADF charged at the point of entry to market while importers of old tyres and some retailers want to maintain the current situation.

The majority of stakeholders favoured using the ADF to encourage development of an end-use market. Some wanted it to help the collector industry. Either central government or an independent industry body should manage the fund. (Note that in Australia, funding is overseen by a Product Responsibility Organisation made up of producers (www.ephc.gov.au).)

More attention needs to be given to development of end-uses so that value of EoL tyres increases and encourages market forces diverting tyres away from landfill.

A collection fee would encourage illegal dumping and divert people from participating in the scheme.

Some stakeholders believe only market forces can lead to the desired outcome while others believe, without regulation, free riders will hinder development of the end-use market. Any regulatory regime needs to be more friendly towards end-uses, eg, how long to trial before allowing use, resource consents.

There is a need for standardisation of the regulations across councils for both disposal and end-uses. Landfills should be required to have dedicated tyre areas (mono-fill).

There is a need for education of both public and retailers.

It would be difficult to engage rural retailers and those in the remote location due to the lack of access to technology or travel distances. With the current arrangement, only 50% of retailers can be recruited to the scheme.

There is a need to consider the car culture in New Zealand. The dependency on cars is a factor contributing to the EoL tyre problem.

The key problem from an end-user perspective is the dispersion of the tyre supply and costs of transport. This problem is likely to be exacerbated by the activities of farmers who disperse a significant amount of EoL tyres throughout the countryside.

Some end-uses (eg, cement kilns) require a large amount of tyres (note that the only cement kiln in Australia to take tyres on a consistent basis uses just under 10,000 tonnes per year) and need to secure a long-term supply to warrant the initial investment required to implement the end-use technology. Competition from landfills and farmers reduces these amounts to uneconomic levels in rural areas. End-users would like to see mechanisms favouring end-use of tyres where energy or materials are recovered (eg, levy-based benefit).

Due to the concentration of tyres in municipal areas, it is likely that schemes encouraging alternative uses will result in increased activities in those areas, leaving the rural areas with a more intense problem than before. (This statement assumes that the "value" of tyres remains insufficient to justify the transport costs.)

Local government supports the voluntary scheme with the safety net regulation to manage free riders. Nonetheless, local government would also be prepared to support a mandatory scheme. Voluntary schemes tend to work when the demand for EoL tyres is higher than the supply.

There are benefits to having varied regulation among different councils responding to specific local conditions. It is important to recognise and support local end-users. EoL tyres should be treated as close to the production source as possible. Administrative problems experienced by the collectors could be dealt with through better information provision.

The combination of the current, locally-managed disposal system and a producer/importer levy managed at the national level by an independent product stewardship organisation would be acceptable.

Large players (producers/importers) would like to see stricter regulations (supporting mandatory schemes and an ADF) that would provide a clear and secure operating environment. It appears the remaining two-thirds of the industry (small, fragmented operators) resist regulation, as they operate on tighter margins and find administrative costs too high.

A clarification of tyre disposal and management regulations is needed urgently. The current changeable environment is a major obstacle for the development of the end-use industry.