Enviro, Michelin ink strategic partnership agreements 

Stockholm – Scandinavian Enviro Systems (Enviro) and Michelin have finally signed “definitive agreements” as the basis of a strategic partnership for the processing of end-of-life tires (ELTs). 

The agreements cover a jointly owned plant for the recycling of ELTs in Chile, Michelin’s payment for use of Enviro’s patented technology, and payment for the use of Enviro technology and services at the JV facility.

Announced 8 Feb, the signings deliver on a letter-of-intent revealed last April, though remain subject to approval by Enviro shareholders at a soon-to-be-arranged EGM.

With capacity to recycle 30,000 tonnes of construction equipment tires a year, the Chilean unit will be operated by a joint venture owned 90% by Michelin and 10% by Enviro. 

The Swedish partner will pay SEK20 million (€2.5 million) into the JV and receive royalty payments under a license deal, allowing Michelin to set up its own recycling plants based on Enviro’s technology. 

Under the licence agreement, through to 2035, Michelin will pay Enviro a fixed amount per plant as well as royalties based on a percentage of the plants’ sales.

Enviro will also receive around SEK15 million in payment for design, engineering and project services in connection with the establishment of the plant in Chile. 

“Through the partnership with Michelin, we will achieve our first full-scale recycling plant, which is decisive for our ability to scale up and commercialise our technology,” said Alf Blomqvist, chairman of Enviro. 

“The partnership with a leading tire manufacturer also gives us unsurpassed opportunities to improve our recovered carbon black and pyrolysis oil, which will naturally further strengthen our position on the market,” added Blomqvist.

Over the past year, Enviro said it had attracted collaboration-interest from tire makers, rubber suppliers, carbon black producers and operators in the oil industry, noted Enviro CEO Thomas Sörensson.

In particular, he said the oil recovered from tires “is attracting growing interest from the oil and chemicals sector, which regards it as crucial in managing a transition to a more circular economy,”

“Our assessment is that, in the long term, oil will be our single most valuable end product,” concluded Sörensson.