Report Title: Sustainability in the Industry 2016

Length: Over 75,000 words (190 pages) / 200 charts & diagrams

Price: Corporate licence: GBP 5000

Publisher: Tire Industry Research

Find out more: http://SustainableTires.com

Tire Industry Research RESEARCH Sustainability

Sustainability in the Tire Industry 2016 is a full-scale in the tire industry market research report. It is the second edition of a report first published in 2014, and expanded to include 2016 chapters on and sustainability criteria. Keeping the world’s tire industry informed: The report covers every aspect of sustainability, in the News Opinion tire industry, including green , labelling, NR risks Comment and key upstream driver. Analysis Market research More than that, it acts as a manual for how the tire Forecasting industry really works. Readers from the 2014 edition told us they liked the way the report offers insights into how the key players work and the background to deci- sions made in the tire industry.

With support from Versalis

Green The report analyses the ‘sustainable’ status of natural ‘X’ rubber and gives deep insights into the future of alter- native crops such as guayule and TKS. Continuous polymerisation Batch polymerisation E-SBR E-SBR S-SBR S-SBR S-SBR S-SBR S-SBR S-SBR Ti-BR Ti-BR Ti-BR Nd-BR Nd-BR Nd-BR Nd-BR Nd-BR It takes a wide-perspective view of what is sustainable 80/20 80/20 80/20 70/30 70/30 70/30 70/30 70/30 V/Z and what is ‘green’ and explains the careful balance High Low- Low- Functionalised Bio- between in-service energy consumption and energy styrene PAH PAH S-SBR components SBR oils oils used to create tires. Low Sustainable S/T/H Low T wear S/T LRR g LRR for Ice Written by acknowledged industry expert, David H/V grip Shaw, it offers the insider’s guide to one of the key S/T Carbon black compounds Silica compounds issues facing the global tire industry. Early 1970s Late 1970s 1980s Early 1990s Late 1990s Early 2000s Late 2000s Future

Versalis, our Corporate partner “The book ... is valuable for its Tire Industry Research has partnered completeness and in-depth analysis with Versalis, the largest Italian of each subject” chemical company and a subsidiary of “Every tire maker and ENI, in the production of this report. supplier should have a copy” Head of Sustainability at a major international rubber supplier

Tire Industry Research Sustainability in the Tire industry 2016 http://SustainableTires.com Weaknesses of the label Butyl rubber Innovations Either too complex or too simple Ch. 9: Other materials Energy and water management Contents Tire Wear grading Key points Waste Sustainability in the tire industry The EU labelling scheme Not drop-in replacements Reducing Solvent consumption Timing New horizons Fillers Hankook Industry Perspective More time needed to accept labels Silica Business Risks Winter tires and the EU label Versalis Carbon black Supply Chain Backward integration Labels and selling price Starch-based alternatives to silica Environment Adding bio-technology to petrochemicals Enforcement Oils Michelin On-purpose butadiene Tire labelling in China Bio-based extender oils Innovation Japanese tire labelling Bio-sourced butadiene with Genomatica Orange oil Environment United States tire labelling Variants on natural rubber Suppliers Adding guayule crop as a business Other countries Epoxidised natural rubber NR purchasing Mid-term strategy to develop butadi- Ch. 5: Natural rubber ene-based elastomers production Ch. 10: Tire design and concepts Nokian Key points Approach to sustainability Key points Raw materials Price volatility Suppliers’ Code of Conduct Ch. 1: Introduction Managing price volatility Tire Pressure Monitoring Systems Environment General Rubber Goods industry Alternative materials Direct and indirect pressure monitoring Metrics Technical features of Natural Rubber Runflat tires Pirelli Progress Natural Rubber in the tire industry Sealant tires Supply Chain Risks associated with Natural Rubber Cost of production Non-pneumatic tires Green sourcing policy Price Volatility Pricing models Amerityre polyurethane tires Raw materials research Security of supply Speciality and commodity ingredients Michelin Environmental Performance Disease Pricing model of a speciality Resilient Technologies’ NPT RPG-Ceat Limited traceability and documentation Pricing models in commodities Airboss segmented tires SRI in the Contract and spot markets Bridgestone Airless Innovation NR supply chain NR markets in Shanghai,Tokyo and Hankook i-Flex Environmental Impact Butadiene shortage Singapore SRI Gyroblade Yokohama Ch. 2: Key drivers – Automotive Futures, options and derivatives Yokohama Youmyaku Technologies for sustainability Environment Key points Defaults increase with price volatility Air Maintenance Technology Exerting influence down the supply chain Risks of long-term price contracts Tall-Narrow tires Water, waste and recycling Change comes slowly Disease Risks: Small diameter tires Employees BMW South American Leaf Blight Ch. 11: Towards 100% sustainability Suppliers Supplier monitoring Corynespora leaf fall Key points Omni United Managing risk White Root disease (WRD) Re-using process materials in tires Ch. 14: Recycling Tires Voluntary self-assessment Sustainability policies Sumitomo Enasave Key points Sustainability audits Sustainable Natural Rubber Initiative The SRI approach The recycling challenge Human rights Managing the supply chain Ultra pure Rubber Laws and numbers Ford Cost savings through inventory manage- Modelling Retreading Aligned Business Framework ment Bridgestone Ecopia methods UN Global Compact on Supply Chain Environmental sustainability Ch. 12: Market development Cold cure retreading Increasing yields Sustainability Key points Hot-cure retreading Supplier Assessments Genetic Manipulation Recycling Automated tapping Europe Raw material supply Japan Devulcanisation Due Diligence in Conflict minerals Ch. 6: De-risking from natural rubber North America Recovered Carbon Black Rare earth elements Key points Latin America Recycling Company Profiles Recycling Alternative sources of NR China Bandag (US) A long term vision Volvo First downturn China has seen Black Bear Carbon Guayule Sourcing process Low prices lead to trade barriers Carbon clean tech (Pyrolyx) Guayule in the modern era Risk evaluation Raw material prices are low GRP (India) Processing guayule Standards Increasing regulation Lehigh Technologies (US) Characteristics of guayule rubber Jaguar Land Rover Current situation Rubber Resources New suppliers Guayule research triggered by allergies Still work to do TKS Ch. 15: Sustainability standards Ch. 3: What’s Green? TKS in the modern era Ch. 13: Sustainability Reports Carbon Disclosure Project: Key points Eucommia ulmoides Key points The Global Reporting Initiative Tires and sustainability Apollo Tyres Dow Jones Sustainability Index Ch. 7: Bio-sourced monomers Skills World Business Council for Sustainable Fuel Economy, rolling resistance, Key points Environment Development inflation pressure and tread depth Which monomers? Raw materials UN Global Compact Metabolic pathways Driving style Saving energy International Integrated Reporting Council Bio-isoprene Fuel use, wet grip, silica and machinery Greenhouse gas emissions Sustainability Accounting Standards Board Commercial production beyond 2015 Tire wear rates Waste and water Forest Stewardship Council Bio-Butadiene Sustainable Natural Rubber Initiative Scrap and re-work Workplace Issues Production processes Isobutylene/ Isobutene Fair Rubber Association Process by process Ch. 8: Polymers Innovation ISO Standards Bridgestone – The Bridgestone Essence Raw materials preparation Key points ISO 9000:2015 Quality Management Broad environmental goals Material preparation Polymers system Component manufacture Making polymers: the science of polym- 100% sustainable tires ISO19011:2011 Audit standards Tire building erisation What does sustainability mean? ISO 14001:2015 Environmental Man- Tire curing Emulsions and solutions Recycling agement Inspection Batch or continuous Bridgestone supply chain ISO 14046:2014 Environmental Manage- Storage and logistics Solution-SBR Human rights and rights of the child ment – Water Footprint – Principles, Requirements Fossil resources Extender oils and PAH legislation Continental AG and Guidelines Retreading Functional groups at the chain-end Cooper Tires Recycled rubber in new tires The silanisation reaction Energy and environment ISO 50001:2011 Energy Management Waste Ch. 4: Tire labelling Capacity for S-SBR is booming ISO 26000:2010 corporate social Innovation responsibility Key points Many generations of S-SBR Strengths of the label Butadiene rubber GiTi A China-based company Goodyear

Useful links brasiliensis The emissions savings prize Understanding a DMA plot Info boxes Energy of Production Reports discussing CSR violations Bio-butanediol/Biobutadiene projects Yokohama’s six orange oil tires Abbreviations Main processes in a tire factory Plant breeding becomes more Genomatica Useful references Versalis Elastomers Portfolio Links to videos of tire building scientific BASF If we have TPMS, do we need E-SBR Europrene® Tire parameters on and off the label History of guayule Versalis runflats? BR Europrene Neocis®/Intene® Useful References TKS projects Braskem Airless tires go back to 1938 Europrene® Latex Resources for Natural Rubber prices Fraunhofer Institute/Conti Bio butterfly Bridgestone CSR Activities Thermoplastic Rubber Europrene® Impact of SALB PENRA Global Bioenergies Bridgestone policies SOL T/TH Reports discussing CSR violations drive4eu Useful References Continental recycling plant in Hanover NBR Europrene® N/GRN/N OZO The IRSG Action Plan covers five main Some guayule projects LanzaTech Useful links to CSR reports EP(D)M Dutral® CO/TER/PM/OCP criteria PanAridus Cobalt Technologies Timberland outfitters and Omni United S-SBR Europrene® SOL B/R SNR-i: some key performance Guayule rubber research How to make S-SBR Lehigh/Yokohama Key risks for tire makers indicators Bridgestone How compounds have developed ContiLifeCycle Plant Germany OE and replacement tires De-coding the genome of H. Achieving Commercial Yields How to mix S-SBR Devulcanised rubber http://SustainableTires.com Sustainability in the Tire industry 2016 Tire Industry Research 25% Fuel saving potential What is offered in this report • Analysis every aspect of what makes a ‘green’ tire. • Insights into how the industry works 20% • Cradle-to-grave analysis of tires’ sustainability 15% • Descriptions of top tire makers’ sustainability programs In ation • Realistic analyses of where energy is wasted in tires pressure Driving 'Green' • Technologies for managing end-of-life tires 10% Tread style tires • Issues surrounding end-of-life tire management depth • Risk management for natural rubber 5% Rolling • Key drivers in the industry diameter • Alternatives to NR and progress in yields and agronomy 0% • Radical approcahes to tire design Comparing the potential fuel benefits of advanced tread • Life Cycle analyses compounds against driving style or tread depth offers • Progress reports on tire labelling around the world valuable insights

Comprehensive coverage Sealant tires prevent air loss As can be seen from the comprehesive contents list on these pages, this is a major body of work. It is not simply gathered by desk research by a professional researcher. it has been put together by industry experts who really understand the industry and how it works.

Area under Natural Rubber (thousand hectare) EU tire sales 2014-2015 (million units) Energy saved in APMEA and EA Operations Charts and tables Total Area under Natural Rubber, 11 countries Japan OE tire sales 2003-2013 Plant emissions Under-inflation increased fuel consumption (‘000 ha) Japan replacement tire sales 2003-2013 Pollutants Improvement in Japanese tires Average NR production yields (2013) in kg/ China production forecast Cooper plants 2008 – 2013 ha/year Global light vehicle tire markets – Michelin Environmental Footprint (MEF) Tire labelling systems around the world Current bio-elastomer projects by speed rating Pirelli sustainability targets 2015-2020 Range of products with label scores Compounding ingredients Global light vehicle tire markets – Pirelli energy consumption (GJ) Tire categories excluded from EU labelling Announced capacity expansions for S-SBR by rim size Pirelli GHG emissions EU label criteria – Fuel economy Low-PAH oils in general use Global light vehicle tire markets Pirelli waste production EU label criteria – Wet grip Extender oils – low-PAH and high PAH Global heavy vehicle tire markets – Pirelli Solvent use EU label criteria – Noise Low-PAH oils – Shares by type Exane estimates Six steps to a hot-cure retreadSource: Continental Incidence of CLF in NR producing countries Tire production globally 2014-2021 Apollo raw materials usage

Bio-oils can improve properties China car tire market development (OE) Diagrams & Illustrations Run- in cross-section China truck tire market development (OE) Curve of environmental awareness Tire price against fuel economy – 2016 Run-Flat tire showing reinforcement inserts Regional share of global light-vehicle BMW Strategy Number ONE Tire price against noise – 2016 Sealant tires prevent air loss tire production 2000 – 2017 BMW i3 electric car Tire price against region of origin – 2016 Volkswagen to double purchases of sealant tires Energy used in manufacturing (by source) BMW Materiality analysis (2015) Tire price against wet grip-2014 Michelin’s Tweel: the first non-pneumatic tire Bridgestone Group’s Environmental Mission Mid-term carbon reduction target Development of CO2 emissions Tire price against fuel economy – 2014 Resilient Technologies’ NPT in BMW cars in Europe Tire price against noise – 2014 Polaris vehicle with TerrainArmor tires Bridgestone works with Ajinomoto Managing the magic triangle Tire price against region of origin – 2014 Airboss segmented tire Tire Manufacturing: direct energy use

CO2 / Fuel Economy Regulations The United States tire labelling Bridgestone AIrless – generation 2 Tire Manufacturing: indirect energy use Ford adopts OECD 5-step Process Cost breakdown of major tire makers Yokohama Youmyaku Tire manufacturing: indirect energy use to Due Diligence NR price and tire profitability Hankook i-Flex – generation 1 Global Energy Use (BTU/lb) Fuel saving potential in a truck NR price 2004 – 2013 Hankook i-Flex – generation 2 Global GHG emissions (tonnes) Environmental impact of a truck Composition of a truck tire by weight Sumitomo Gyroblade Global GHG emissions Jaguar Land Rover materiality matrix Composition of a car tire by weight Goodyear AMT Reducing solvent consumption Greatest environmental impact Raw materials cost breakdown (2012 data) Wind resistance increases with speed Injury and illness rates (per 100 employees)

Life cycle assessment of car tire (CO2 impact) NR price and input costs Citroën C2 car with 10-inch tires Severity rates (working days lost) Life cycle assessment of car tire Speciality-Commodity spectrum Tall-Narrow tires operate at higher pressures Greenhouse gas emissions Sources of energy loss in a tire Natural Rubber Value chain EU car tire market – 2003 – 2014 Energy Consumption Hysteresis and energy loss in tires Daily NR price in different markets EU truck tire market – 2003 – 2014 Consumption of major raw materials Hysteresis and energy loss South American leaf blight EU car tire market development (OE) Renewable Raw materials Improvement in Rolling Resistance with time (1) CLF damage to established clones EU truck tire market development (OE) Recycled Raw materials Improvement in RR with time (2) Carbon sequestration in H. brasiliensis EU car tire market development (replacement) Pirelli Commitment to EU labelling – car tires Improvement in RR with time (3) The life of a rubber tree EU truck tire market development (repl.) Pirelli Commitment to EU labelling – truck tires Effect of tread depth on fuel consumption Composition of a rubber particle Consumer tire sales in Europe (units) Vehicle emission standards more stringent Where energy is lost in a car tire Productivity improvement in H. brasiliensis Truck/bus tire sales in Europe (units) SRI energy usage for factories in Japan Where energy is lost in a truck tire Composition of a rubber particle - revised model Motorcycle tire sales in Europe (units) Nine factories overseas schematic of eternal triangle Production and consumption of NR by region Agriculture tire sales in Europe (units) Five factories operated by domestic affiliates Fuel saving potential Locations where Hevea rubber grows Japan car tire market development (OE) Greenhouse gas emissions from SRI factories Energy consumption within a tire factory Locations where guayule rubber grows Japan truck tire market development (OE) Greenhouse gas emissions from overseas Scope of Assessment EU Locations where guayule rubber grows Japan car tire market development (repl.) factories Composition of a car tire by weight Rubber-containing cells in guayule Japan truck tire market development (repl.) Five factories operated by domestic affiliates Composition of a truck tire by weight Rubber-containing cells in Hevea N America car tire market development (OE) SRI waste generated and recycle rate Maxxis tire production flow chart Bio-isoprene from the Goodyear Du-Pont project N America truck tire market development (OE) Waste Discharged from SRI Japan factories Tire components – Nomenclature Cracker yields depending on feedstocks N America car tire market development (repl.) Waste Discharged from SRI overseas factories Winter tires should carry the three-peaks Bio-butadiene from Genomatica N America truck tire market development (repl.) Waste Discharged from SRI affiliate factories marking Tread compound development Mercosur car tire market development (OE) CO2 emissions and emissions per unit of output Consumer reaction to EU tire label – Substitutes for conventional ingredients Mercosur truck tire market development (OE) Yokohama’s use of recycled rubber Rezulteo survey Pirelli process to make silica from rice husk ash Mercosur car tire market development (repl.) Frequency of Occupational Accidents Progress in label grades 2014-2016 Bio-oils can help rolling resistance Mercosur truck tire market development (repl.) Truck tire in Europe 2007-2014 Tire price against wet grip – 2016 Tire Industry Research Sustainability in the Tire industry 2016 http://SustainableTires.com Tire buyers and chassis engineers in vehicle makers Who benefits from the report and tire distribution will learn how the industry works The report is of key interest to those in the tire industry and what tire makers are doing to improve their sustain- supply chain, both as buyers from tire makers and sell- ability profiles. ers into tire manufacture. Newcomers to the industry will acquire up-to-date in- Supply Chain Professionals will benefit by learning formation about investments, strategy and sustainability about latest developments in material supply. tactics of the world’s top tire makers. Tire makers in developing countries will benefit by Report author David Shaw’s expertise has allowed him learning about key drivers in the industry and how in- to meet with thought leaders around the world and bring dustry leaders are responding. their wisdom to a wide audience. They will also learn how different technologies offer While there are many narrowly-focussed experts in spe- advantages and drawbacks. cific areas of interest, Shaw brings a breadth and depth Corporate management in premium tire makers will of experience and knowledge developed through over appreciate the in-depth yet broad-based overview of 25 years; analysing the whole tire industry, from raw different technologies and strategies and the different materials to tire marketing and sales, that is unrivalled perspective from internal thinking. around the world.

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Tire Industry Research Sustainability in the tire industry 2016

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