Outlook: the price of carbon black
In 2022, several chemical manufacturers announced an increase in the price of Carbon Black in Europe and the Americas. The price increase resulted from a strong demand for the product and the high cost of manufacturing and transportation, both of which rely on fossil fuels.
The prices for petroleum products continue to be volatile due to supply chain disruptions that started during the pandemic and have worsened since the war in Europe. The automotive industry, already under pressure to decarbonise, now urgently seek more sustainable options that are environmentally friendly and a reliable source of Carbon Black.
Circular solutions: recovered Carbon Black and more
Other options for virgin Carbon Black (vCB), and the technologies to produce them, already exist. Pyrolysis of end-of-life tires (ELTs) uses waste tires as feedstock for thermo-chemical reactions to recover component materials—carbon char, gas, oil, and steel. The carbon char is refined further to produce recovered Carbon Black (rCB).
rCB has properties similar to several semi-reinforcing grades of Carbon Black. The rCB properties will, however, depend on the source and mixture of car and truck tires used as feedstock and the type of pyrolysis.
Consequently, the quality of rCB differs from producer to producer. Though no rCB is a 1:1 replacement for any vCB grade, they can be used instead of semi-reinforcing vCB grades, like N660.
Because waste tires, rather than fossil fuels, are used to produce rCBs, each tonne of rCB has over 80 per cent smaller carbon footprint than vCB and produces no air pollutants. Each tonne of rCB produced saves 1.5 tonnes of fossil fuels and vast amounts of water, leading to significant environmental protection and lowering carbon emissions.
By switching to rCBs, tire manufacturers can avoid the fluctuations in the price of virgin Carbon Black, be assured of a reliable, long-term, local supply, and reduce dependence on other countries.
Local rCB production based on tire recycling will improve sustainability by creating local jobs, following inshoring trend in the manufacturing industry.
Price of Virgin Carbon Black vs. Recovered Carbon Black
World events and demands have seen the price of a tonne of vCB reaching upwards to US$2,645 in North America in 2022. These prices are significantly higher than the previous year.
In the case of rCB, the price varies depending on the quality. But, as rCB is a new product, the prices of rCB are around 15 – 30 per cent lower than vCB to get over the entry barrier. Industry leaders expect that rCBs sustainability and positive environmental record compared to vCB will reduce the entry barrier and add sustainability premium on top.
During next few years, it’s not possible to produce enough rCB to replace vCBs. So the demand for rCB is and will remain more than the supply and keep its price on par or even higher than vCBs; this price development is likely to take several years.
Many leading manufacturers in the tire industry, which consumes 70 per cent of vCB, are setting targets to reduce emissions and increase circularity by including recycled materials in their products.
The demand for rCB is there; the problem is more one of supply.
The Recovered Carbon Black Market
The rCB market may be nascent, but it’s growing at a healthy rate.
Estimates of the global market size vary, and according to Business Wire, in 2021, is expected to grow at a CAGR of 11 per cent to reach a worth US$8,760.62 million by 2028.
According to Grand View Research, the demand for rCB is driven mainly by tire manufacturing, which used 71.4 per cent of the rCB produced in 2019. However, other industries traditionally using vCB grades are also turning to rCB.
Rubber production for the automotive, mechanical, construction, and pharmaceutical industries is the second largest consumer of rCB. Products range from rubber sheets, seals, and roofing material to gaskets, hoses, and conveyor belts.
The high-performance coatings industry also uses rCB to enhance the aesthetic and protective value of their coatings meant for the automotive and aerospace industries.
In 2019, the USA was the major consumer of rCB with a 38 per cent market share. The expansion of production has increased mainly due to recycling programs initiated by manufacturers. Europe is the second largest consumer of rCB, with a predicted CAGR of 31.8 per cent between 2020 to 2027.
The automotive and high-performance coatings industries have driven the demand so far. The Asia-Pacific region is the third largest market, with a share of 26.7 per cent.
Current challenges in the rCB Market
Every year, nearly 20 million tonnes of vCB are produced. One tonne of ELTs can produce 300 kg of rCB. However, the industry has to overcome several challenges to meet the present and future demands for rCB, for example:
- Developing industry standards
Due to the difference in technology, tire source, and mixture, the rCB quality varies widely. Moreover, according to the Grand View Research, rCB from different countries differs as the tire composition is different.
The rCB industry needs quality standards and testing procedures to meet consumer satisfaction. The American Society for Testing and Materials (ASTM) International workgroup 36 has been working on the task since 2017.
Contec is joining the workgroup to participate and provide input for this crucial task. Ultimately, two to three levels of quality are required to define Carbon Black specifications for manufacturing different products.
- Scaling-up production
Though the pyrolysis technique has been established as a good source of rCB, in Europe, less than five per cent of ELTs are recycled through pyrolysis.
There are very few plants, and they can’t produce enough rCB to meet even current demands. Currently, there are many pilot projects which are not industrial scale. Each plant will have to deliver up to 20,000 tonnes of rCB annually to move to the industrial phase.
Contec plans to deliver at least 10,000 tonnes annually. Only a few plants of this size, distributed strategically, would be enough to cover half of Poland’s ELT recycling needs.
- Quality technology
An appropriate pyrolysis technology has to be used to supply rCB of consistent quality in required quantities.
Several types of pyrolysis exist; many cannot produce consistently good quality rCB and suffer from a poor safety record. Contec has incorporated molten salts into the pyrolysis process and can produce consistently high-quality rCB.
The protected Contec process is safer to operate, and has a low environmental impact and carbon footprint.
- Securing funding
To take advantage of the existing momentum, rCB manufacturers must find and leverage funding opportunities to cover costs and build capacity to provide long-term strategies.
Contec has obtained timely funds and support from the Warsaw Equity Group to develop a novel pyrolysis method. Leveraging the funds, experience, and knowledge given by Warsaw Equity Group, Contec has started plant in Poland and is now one of less than ten European companies that offer pyrolysis for ELT recycling.
- Build collaborations
The rCB manufacturers can’t operate in isolation.
However, there is help at hand. In 2020, the automotive industry started the global Circular Car Initiative to encourage collaborations between stakeholders and increase circularity by closing loops and seeking policy changes.
Then there is the RCB Rubber initiative by tire manufacturers with the same aim. rCB manufacturers can leverage these forums to adopt a value approach across the entire value chain. They must also build collaborations to optimise inbound and outbound logistics.
The European Commission revised the EU Emissions Trading System (ETS) to include road transport. It’s part of the EU’s efforts to reduce carbon emissions by 55 per cent by 2030 as part of the Green Deal.
The new emissions trading system (ETS 2) can be instrumental in decarbonising vehicles and components if used to supplement existing policies.
- Quality and Stable rCB Production
Achieving sustainability in the tire industry is essential and is needed now.
The industry has to find sources to meet the demand for consistent, high-quality rCB in sufficient volumes for tires that ensure the safety of passengers.
Contec can help here. Contec’s pyrolysis process uses patented innovations like molten salts to solve many of the problems in pyrolysis, produces top-quality rCB consistently, and has an excellent safety record.
The company runs two plants in Poland and is seeking to expand operations. Get in touch to learn more about our sustainable solutions.
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