Equity firm boards Enviro-Michelin effort to scale up tire recycling
Antin Infrastructure funding 'joint venture' to establish large-scale pyrolysis operations across Europe
Stockholm – Scandinavian Enviro Systems and private equity firm Antin Infrastructure Partners have joined forces to create what they describe as “the world’s first large-scale tire recycling group”.
Using Enviro’s tire pyrolysis technology and supported by Michelin off-take agreements, the 'joint venture' will initially be financed by Antin, which is focused on infrastructure investment.
The 'JV' aims to establish plants across Europe, with a total capacity to process 1 million tonnes of end-of-life tires (ELTs) by 2030, Enviro said in a 29 March statement.
At the initial stage, Enviro said it will have no ownership in the venture, but has an option to acquire a holding of up to 30%.
In the meantime, however, Enviro will be represented on the 'JV' board of directors from launch, according to its statement.
Over the next 24 months, the Swedish tire recycler's board will investigate the long-term capital requirements to finance ownership in the 'JV'.
The first full-scale commercial plant established by the 'JV' will be the plant previously planned by Enviro in Uddevalla, Sweden.
Scaled back from the original plan, the Uddevalla facility will have capacity to recycle 34.5 kilotonnes per annum waste tires, equal to 40% of the annual ELT arisings in Sweden.
Plant construction is scheduled to start in the first half of 2023, subject to a final investment decision by the JV, with operation slated for 2025.
The European roll-out will start following the “successful commissioning” of the Uddevalla plant, said Enviro, noting that site-selection in other European countries has been initiated.
With the aim to scale up processing to 1 million tonnes per year of ELTs, the 'JV' aims to tackle one-third of Europe’s waste tire arising.
Enviro will receive revenue through service fees as well as an asset fee, the latter to be calculated based on the profitability of each plant.
Already partnering with Enviro, French tire maker Michelin is planning to join the 'JV' as the future plants are built, said the statement.
The 'JV', it added, has secured a multi-year supply agreement with Michelin to include the delivery of recovered carbon black (rCB) and tire pyrolysis oil end-products.
Enviro claims that replacing virgin carbon black with its rCB materials in rubber compounds, reduces CO2 emissions by over 90%.
Based on the targeted volume of 1 million tonnes ELTs, carbon emissions would be reduced by 670,000 tonnes, Enviro also estimates.
With the formation of the 'JV', Enviro chairman Alf Blomqvist said the company will focus on core competencies, such as technology and materials development, optimisation and quality control.
“We believe this JV will play a critical role in accelerating Europe’s circular economy,” Anand Jagannathan and Rodolphe Brumm, NextGen Partners at Antin said in the Enviro release.
For its part, Michelin said it saw the 'JV' as a “significant step” in its circular and sustainable tire ambitions.