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RUSSIA
Eurasian Union to Develop Retreading
Industry within Environmental Protection Project
Denis Manturov promises that a tyre utilisation fee will be levied on all new tyres, but those going to retreading will be exempted
The creation of the Eurasian Economic Union (EEU) of Russia, Belarus and Kazakhstan, which is scheduled for January 1, 2015 is likely to give impetus to the development of the retreading industry in the region as the countries will have to conduct a unification in areas of legislation, including the area of environmental protection, suggest industry experts and analysts. Kazakhstan already has a bill that prohibits the throwing away of the used casings – they should be sent either to a
will introduce a utilisation fee on tyre production.
Manufacturers or customers will have to pay EUR 1–1.5 per tyre if, after use, they go to the recycling plant. At the same time, the law will provide manufacturers with an alternative – if, after use, the casing goes to a retreading plant, they will be exempted from payment of the utilisation fee. According to the representatives of the Ministry of Industry and Trade of the Russian Federation, “the new system is
not yet fully elaborated, as it is necessary to find a balance between the volumes of casings that will go for retreading or recycling, taking into account existing industry capacities and the economic interests of market participants”.
At the same time, the government plans to continue discussions on this issue with the representatives of the business until the end of this year. Worthy of note is
the fact that Russian market participants have proposed that the authorities base their decisions mostly on foreign experience.
“In the opinion of the Russian companies operating in this area, the creation of an effective system of tyre recycling or retreading should be based on already available European experience and in particular on the principle of "Producer and Importer Responsibility" - one of the main objectives of the Russian Association of Tyre Manufacturers (RATM)”, commented the RATM’s chief executive Sergei Kolosov.
For instance, RATM has been established with the participation of the main players of the country’s tyre market – the companies Bridgestone CIS, Goodyear Rus, Continental Tyres Rus, Michelin, Nokian Tyre, Pirelli Tyre Russia and other companies which account for almost all of the country’s retreading capacity.
The model of "Producer and Importer Responsibility" which is used in most European countries has been able for 10-15 years to almost completely release the territory of these countries from the dumps of used tyres, says the representative of Nokian Tyres in Russia. According to official statics, with the total volume of the Russian tyres market standing at 61 million units, the market for retreaded tyres so far accounts for only about 680,000 units, with the volume of domestic production in 2013
retreading plant, or to a recycling plant. In the first half of 2015 Russia and Belarus may adopt similar rules and at the same time stimulate the development of the retreading industry with a number of economical tools.
In Kazakhstan, in the opinion of experts, the adoption of legislation stipulating the compulsory retreading or recycling of tyres has already resulted in an increase of the investment attractiveness of the retreading business and the launching of a number of projects in that area. The need for the bill is dictated not only by the fact that within the EEU the members have to conduct a unification of ecological legislation but also by environmental factors themselves.
Today tyre dumps in Russia can be found near almost every major city. In some regions, community services are accustomed to burning the tyres, which causes protests among the citizens of the nearest populated localities. Currently, according to official statistical data, only 15 per cent of all casings in Russia and 22 per cent of those in Belarus are going to retreading or recycling.
The remaining tyres are going to dumps, the sizes of which are growing at a furious pace. The adoption of new environmental standards is likely to completely prohibit this practice. Also, according to Denis Manturov, Russian Minister of Industry and Trade, it is expected that Russia already next year
standing at 350,000 units.
It is clear that currently the country has no capacity for a rapid increase of this figure and the share of retreaded tyres in the overall structure of the country’s tyre market. At the same time, market participants note that the EEU’s authority can stimulate the development of the retreading industry with economical tools, and in particular in the form of soft loans, subsidies and tax benefits.
"This can be a provided through tax incentives and support in the form of subsidies per recycled tyre. Officially such initiatives have not been announced, but we have seen similar steps in other projects, in particular in the Russian automotive industry. It is obvious that all this environmental initiative would have no meaning without growing the retreading capacity. If the project could be properly launched that would be really good news for the locally based retreading business,” said the representative of the Russian Association of Retreading Business, Anton Kalmakov.
and storage of casings. Depending on the quality of the casings, the experts of the organisation will decide if the casing will go for retreading or recycling. The project provides that the main source of the funding of this organisation will be the utilisation fee. It also should become the main impetus for increasing the volume of retreaded tyres in the country. "We already see that the implementation of a similar legislation framework in Kazakhstan has stimulated the demand for retreading services. We may expect similar things in Russia and Belarus, where the markets still look very promising in terms of the growth of the retreading sector, especially taking into account the proposed approach which provides that the companies which send the casings to the retreading plant may abandon the payment of the utilisation fee.” Said Anatoly Shemarinov, a Russian automotive industry expert.
At the same, time some experts argue that the whole system should not be put in hands of only one organisation, among other things because of the high corruption risks. In any case, it is
Every Russian city has its tyre dump – and they are growing daily
52 Retreading Business
However, the look of the organisation which will be created in future is not absolutely clear. RATM have already proposed the creation of some sort of management company - a non-profit organisation or state agency which will conduct the collection, transportation
expected that discussing the system will not take place until the creation of the EEU. The creation of the new legislative framework in the area of environmental protection will begin at the start of 2015.