Warning over ‘fragility’ of tire pyrolysis industry

London – The tire pyrolysis industry is in a fragile state and needs significant support from the tire industry and other investors, sector analyst Martin von Wolfersdorf believes.

This, he explained, is because end-of-life tire (ELT) pyrolysis start-ups involved in the production rCB and related by-products are today “more cash-burn than cash-flow”.

“Even the perceived superstars don't have it easy with their scale-up projects,” the Wolfersdorff Consulting Berlin GmbH leader commented in a 10 April online article.

For instance, von Wolfersdorf pointed to a recent €3-million investment in Scandinavian Enviro Systems (Enviro) by Michelin.

While investment-support on this level is highly welcome for rCB producers, it only goes so far, according to the industry expert.

Highlighting the cost of scale-up activities, for instance, he said a pre-engineering study required for some environmental permits can cost around €1 million.

Then, even much larger-scale asset investments "are not helpful enough for the cash dry companies" in need of more immediate equity funding.

Further underscoring the financial challenges, Von Wolfersdorf noted some market analysts had recently downgraded rCB start-up Pyrum's 2023 revenues-forecast by 72%.

Meanwhile, he added, another (unidentified) leading tire pyrolysis industry player is reportedly to lay off 25% of its workforce due to cash flow problems.

Urging a review of sustainability-related investment policies, von Wolfersdorf concluded that start-ups without regular cash-flow from operations “need a lot of money just to survive.”