2008 California Scrap Tires Market Report August 2009 Copyright © 2009 by R. W. Beck, Inc. All Rights Reserved. California Integrated Waste Management Board Agenda Item 16

R. W. Beck, Inc. Background  Updated Market Trends & Diversion Rate  Support Board & Industry Efforts  New Template for Annual Updates  Foundation for Program Evaluation/ Strategy Review  Methodology: Survey, Interviews, CIWMB Data  Inherent Data Limitations: +/- 10% Accuracy

R. W. Beck, Inc. California Scrap Tire Industry Flow Chart

R. W. Beck, Inc. Market Snapshot Category Million PTE Percent of Total Million PTE Percent of Total Million PTE Percent of Total Export % % % Reuse % % % Ground Rubber % % % Civil Engineering % % % Alternative Daily Cover % % % Other Recycling % % % Tire-Derived Fuel % % % Landfill Disposal % % % Total Generated % % % Total Diverted from Landfill % % % Imports % % %

R. W. Beck, Inc. Processing Infrastructure Trends & Issues  Expansions, Contractions and Partnerships  Increased Competition Driving Down Collection Revenue in Some Areas  Reduced Availability of Scrap Tires  Compliance Challenges  Competition from Out-of-State Subsidized Ground Rubber Imports  Fairness & Appropriate Use of Board Assistance Resources

R. W. Beck, Inc. Reuse – Holding Steady (14.0% in 2008)

R. W. Beck, Inc. Ground Rubber – Steady Growth, Some Threats (22.4% in 2008)

R. W. Beck, Inc. Civil Engineering – Declining with Abrupt Changes Possible (6.2% IN 2008)

R. W. Beck, Inc. Alternative Daily Cover - Declining (4.6% in 2008)

R. W. Beck, Inc. Tire-Derived Fuel - Declining (16.7% in 2008)

R. W. Beck, Inc. Exports: Used Tires Steady; Waste Tires Increasing (8.2% in 2008)

R. W. Beck, Inc Diversion Estimate: 72%

R. W. Beck, Inc. Short-Term Diversion Outlook: Reduction in 2009 Very Possible  Expect Increased Diversion through Ground Rubber and Exports  Expect Decreases in Civil Engineering and Tire-Derived Fuel  Will Threats to Ground Rubber Materialize?  How Deep and Long will the Recession Be?

R. W. Beck, Inc. Long-Term Threats to California Scrap Tire Diversion  Prolonged Recession  Reduced Board Funding  Perceived Environ Health & Safety Concerns  Export Boom and Bust  Ground Rubber Over Supply  Compliance Challenges  Possible Used Tire Export Constraints  Possible Increase in Low-Cost GR Imports

R. W. Beck, Inc. Market Analysis Conclusions  CA Scrap Tire Industry Entered 2009 in Strong Position, With Ground Rubber Growing  But Short-Term Constraints and Long-Term Diversion Threats Loom  Export is a “wild card”  Opportunity for Program Evaluation & Strategy Refinement

California Integrated Waste Management Board CA Scrap Tire Market Development Program Evaluation Jennifer Caldwell

California Integrated Waste Management Board Tire Market Development Program Evaluation  Purpose: – Evaluate appropriateness – Evaluate effectiveness – Build a consensus framework to guide future efforts

California Integrated Waste Management Board Approach  Develop evaluation criteria based on: – Refined market development goals and principles – Opportunities and barriers – Quantitative measures  Ensure objectivity and balance by: – Work Group and Stakeholder input – Report all comments and responses

California Integrated Waste Management Board Anticipated Results  An objective evaluation of the Board’s scrap tire market development programs – Refined goals, principles of approach and strategies – Templates for measuring and tracking progress – A framework for strategic reviews during the 5-Year Plan update process

California Integrated Waste Management Board Schedule  August 2009 – Board direction on approach  Late August 2009 – Stakeholder meeting  October 2009 – Board review of goals and principles  Jan/February 2010 – Stakeholder review of preliminary findings  April 2010 – Board review of draft final report (Concurrent with Tire Fund Reallocation Proposals)