Sustainable materials to remain a green tyre niche – for now
Speaking at the Tire Technology Expo in February, Adam Page, UK-based business manager of reports and consultancy at Smithers Rapra, shared on the global market for green tyres – the subject at the heart of the company’s latest tyre industry market report, the Future of Green Tires to 2017. One significant projection Page shared from the Smithers Rapra report is that although the value of green tyre market is expected to grow by more than 56 per cent between 2012 and 2017, green tyres based on sustainable and bio-materials will likely play a comparatively minor role in this growth.
For the purpose of Page’s speech (and the Smithers Rapra report), green tyres were defined as both tyres utilising materials, particularly elastomers, obtained from sustainable bio-materials, and tyres that achieve lower rolling resistance through the use of carbon black, silica or other traditional materials. “The global market for green tyres was valued at US$44.8 billion in 2012, 28 per cent of the total tyre market,” Page shared. “This may sound surprising but don’t forget we’re looking at both energy tyres and green material tyres. And we see great potential in this market rising to just over $70 billion over the next five years.” This is 35 per cent of the total market and a compound annual growth rate of 9.5 per cent.”
But what sort of green tyre is represented in this growth? According to Page, Smithers Rapra opines that much of this 9.5 per cent CAGR will be achieved through the sales of ‘standard’ low rolling resistance tyres. Referring to sustainable material tyres such Sumitomo’s Enasave 97 and Enasave 100, Page said that “although this market is expected to significantly grow, even the most optimistic forecasts put them as remaining a high-end specialty product. We still see this, for the next five years at least, to be somewhat of a niche market. At the moment, when we’re looking at green tyre market, we growth primarily in terms of low rolling resistance and energy tyres, and the introduction and adoption of new kinds of bio-materials is going to take longer to take off in the global market.”
Smithers Rapra anticipates that by 2017, 92 per cent of the green tyre market will be held by tyres that achieve lower rolling resistance through the use of (non-sustainable) filler technology, while only one per cent of green tyres will reach this goal through the use of improved synthetic elastomers – the same percentage as in 2012. An estimated five per cent of green tyres in 2017 will be those with an increased use of natural rubber, and a further two per cent will utilise improved inner liner materials. Regarding a timeframe for the widespread adoption of sustainable material tyres, Page opines that Bridgestone’s goals to reach total ‘cradle to grave’ sustainability in 2050 may be realistic.
As for who’ll be buying green tyres over the next five years, Europe’s current regional dominance will continue. Although the region’s share of the green tyre market by value is projected to decrease from 56 per cent to 44 per cent between 2012 and 2017, this proportional decline reflects Europe’s already strong adoption of these products compared with other regions. It was also noted that the next largest region in terms of value in 2017, Asia Pacific, should trail far behind at only 31 per cent (up from 24 per cent in 2012). North American share of the green tyre market should grow by a modest three per cent to 17 per cent, while South America’s share is tipped to increase from three per cent to four per cent.
“Geographically, our information showed a big spike for Europe. What was clear from our research is that when you look at energy tyres and green tyres, one of the drivers that are going to influence the market is consumer willingness to pay for premium or added-functionality tyres. That’s why we see the European market as stronger than the other markets – there’s a greater willingness in Europe to pay for this,” Page commented. “In terms of how we see green tyres developing by region, Europe is the primary market at the moment, but we see Asia Pacific as being an interesting market in terms of prospects. Not just as a driver of green tyres but also as a driver for the tyre market as a whole. There is very high growth there.”