FCS3

Section 1 Summary

1. SUMMARY The Feedstock Conversion Technical Assistance and Material Testing Services (Feedstock Conversion Services, or (FCS) Program works in tandem with CalRecycle’s Tire Incentive Programs (TIP) and the Tire Market Analysis and Support (TMAS) to expand and diversify demand for crumb rubber made from California scrap tires through outreach programs. Crumb rubber is an attractive scrap tire end-use because of its high value and use within diverse manufacturing market niches, both of which strengthen the resiliency of scrap tire recycling. Since the major existing markets for crumb rubber have shown a slow increase in the last few years. We have had some successes in the increase in crumb rubber in California based on the support of the Tire Incentive Program which has been supported by two previous FCS Contracts. The need for increasing crumb rubber demand through feedstock conversion is more important than ever. While there is potential to increase the use of crumb rubber by designing and developing feedstock conversion products, experience with feedstock conversion efforts to date is mixed due to multiple challenges (e.g., benefits versus costs, timeline, money, personnel resources, equipment regulatory and certification requirements, testing, supply chain shortages). On the plus side, a good number of tire- derived manufacturers with diverse products have applied to the TIP, the previous FCS Contracts or CalRecycle grant programs. As identified in our California Waste Tire Market Report for 2020, crumb rubber volumes have yet to reach their full potential. Higher volumes of tire-derived material feedstock conversion projects are feasible if we utilize larger than one-fourth inch material in feedstock conversion projects in addition to using crumb rubber which is equal to ¼” or smaller. Above all, experience shows successful feedstock conversion must be driven by customers, and that a sustained commitment is required by manufacturers to overcome challenges related to new product formulation, defining raw material and product specifications, time frames, cost to the manufacturer and adjusting manufacturing practices. The FCS Program is designed to complement the TIP by directly assisting manufacturers to overcome these challenges. TMAS was established to support market assistance and outreach to promote tire-derived products and complement FCS by promoting the feedstock conversion tire-derived product (TDP) that participating manufacturers make, expanding and diversifying markets. In Task 2, the RFP shows that the Contractor’s efforts are to be focused on manufacturers that have not previously participated in various CalRecycle grants and technical assistance, including the TIP grant or the previous FCS contracts. It is estimated that approximately 85 to 95 percent of the current California TDP manufacturers have received a grant, participated in TIP or one of the previous FCS Contracts. We will request flexibility in the contract for a manufacturer to not only replace a raw material with crumb rubber in an existing product but to be allowed to design a new product that would utilize a minimum of five percent crumb rubber with another raw material. This contract allows for enough time to secure manufacturers and develop products if the contract moves through the contract process in a timeline that allows for the contract to perform the requirements. Denise Kennedy, President of DK Enterprises has assembled a team with the full range of qualifications and resources needed in the FCS Program. Denise will serve as Project Manager overseeing and managing all aspects of FCS. William Esparza Consulting Service, the FCS DVBE company will assist with administrative, digital marketing outreach and research as needed. The team also includes 11 committed testing facilities, six individuals with material and testing handling capabilities (e.g., compounders, civil and environmental engineers), and seven individuals that are available to assist the Project Manager and manufacturers through technical assistance. The final FCS qualified candidate

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