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As the global natural rubber market hits record growth, how does this relate to the environment? Experts and tyre companies weigh in on the environmental impact of rubber demand to work on solutions, says Angelica Buan in this article.
Tyres driving the growth of NR
More tyres means more demand for natural rubber (NR), and this demand-supply dynamics is related to expanding rubber plantations particularly across major rubber producer countries.
There is no doubt that tyres are large consumers of NR. A typical car tyre contains approximately 1.35 kg to 19% of NR; while heavy trucks can contain as much as 23 kg to 40% of NR. Thus, about 70% of the total global NR output goes into producing tyres.
By 2026, the global tyre market is expected to cross US$190 billion, growing at a CAGR of over 3% from 2018, Transparency Market Research notes in its report.
The Association of Natural Rubber Producing Countries (ANRPC), in its Natural Rubber Trends & Statistics report in September 2018, reported an increased 6.6% to 10.7 million tonnes year-over-year global consumption of NR from January-September this year. During the same period, the world production recorded 9.8 million tonnes. In an earlier report published in May, ANRPC forecasts global production to cross 14.2 million tonnes, while global consumption is poised to reach to 14.3 million tonnes during 2018.
Growth comes at expense of biodiversity
There is, however, a lacklustre side to the all-time growth trajectory of the rubber market as it has been found to contribute to the degradation of forests and wildlife, the extent of which had not been visualised clearly until the 2015 study undertaken by the UK-based research institution University of East Anglia (UAE). It summed up how the tyre industry’s demand for NR is jeopardising protected areas in Southeast Asia.
The study covered four biodiversity hotspots in which rubber plantations are expanding, including the Sundaland (Malay Peninsula, Borneo, Sumatra, Java, and Bali), Indo-Burma (Laos, Cambodia, Vietnam, most of Myanmar and Thailand, and parts of Southwest China, including Xishuangbanna and Hainan Island), Wallacea (Indonesian islands east of Bali and Borneo but west of New Guinea, including Timor Leste), and the Philippines.
It was estimated that by 2024, up to 8.5 million ha of additional rubber plantations will be required to meet demand for NR.
Southeast Asia, which accounts for over 91% of global rubber production, is at the epicentre of expanding rubber plantations. The region is not the world’s largest rubber coffer for nothing: its climate and soil conditions are conducive to cultivating rubber.
Serving the burgeoning global tyre industry, some of its tracts of lands, even those within the protected zones, have been converted to rubber plantations.
Protected areas have already been lost to rubber plantations, according to the report, citing Snoul Wildlife Sanctuary in Cambodia as proof, where 70% of its 75,000 ha breadth was cleared for rubber between 2009-2013. Conversions of the forest areas into rubber plantations have endangered animals including primates and carnivores, as well as contributing to the decimation of small insects like beetles, bats and birds in the wild.
Taking advocacy to a global level
The role of industry players, to commit to sustainable sourcing of rubber, has never been more relevant. The latest bi-annually published report from the World Wildlife Federation (WWF), Living Planet Report 2018, showed a 60% decline in the size of populations of mammals, birds, fish, reptiles, and amphibians between 1970-2014 or in just over 40 years due to human activities, including “habitat loss and degradation and the excessive use of wildlife such as overfishing and overhunting”.
Having said this, WWF underscored that rubber production can actually contribute to increasing “biodiversity, carbon sequestration, and reduction of carbon dioxide emissions from deforestation” when done “responsibly”, meaning, no clearing of natural forests.
The industry players across the value chain, including automotive makers, fleet operators, airlines, tyre suppliers, processors, and others, must also adopt sustainably and ethically produced rubber policies, amid the absence of industry-wide standards or a third-party certification system for latex from rubber trees.
The latter was also suggested by the UAE researchers based from their report findings. Sustainability certification that can distinguish rubbers sourced from deforested lands – which are observed to be misleadingly marketed as eco-friendly alternatives to oil-based materials, and those that are ethically sourced.
Two known global initiatives have been launched – the International Rubber Study Group (IRSG)’s Sustainable Natural Rubber Initiative (SNR-i) launched in 2015; and the more recent Global Platform for Sustainable Natural Rubber (GPSNR), launched in October this year.
The development of GPSNR was started in November 2017 by the CEOs from 11 company-members of Tire Industry Project (TIP). The CEO-led TIP operates under the World Business Council for Sustainable Development (WBCSD) and is designed to advance sustainability throughout the tyre industry.
Stakeholders including tyre manufacturers, other rubber users, suppliers and processors, vehicle makers and NGOs, contributed to the development of the GPSNR. The GPSNR will work to harmonise standards to improve respect for human rights, prevent landgrabbing and deforestation, protect biodiversity and water resources, improve yields, and increase supply chain transparency and traceability. To be headquartered in Singapore, a dedicated GPSNR secretariat will start operations in March 2019 with an inaugural GPSNR General Assembly.
Meanwhile, the IRSG-initiated SNR-i has been developed under the framework of the Singapore-headquartered inter-governmental organisation comprising rubber producing and consuming stakeholders, as a voluntary and collaborative industry project to ensure that the rubber industry can build on its best practices plus demonstrate and communicate throughout the NR value chain.
The working group members comprise government representatives from Cameroon, Cote d’Ivoire, India and Sri Lanka; intergovernmental organisations including the ANRPC and the United Nations Conference on Trade and Development (UNCTAD); rubber industry associations, downstream industry, producers, and traders.
The members developed an Action Plan to explain the factors driving this initiative and brought forward proposals for its design and implementation. The Action Plan defined a set of five value chain criteria for a voluntary verification system targeted on wide stakeholder participation. From these criteria, indicators have been developed for implementation of SNR-i that may allow organisations to participate in this voluntary initiative on a self-certification basis. As of 2017, SNR-i has signed-up 43 self-declared organisations.
Tyre makers moving towards sustainable procurement
French tyre maker Michelin was the first to commit to responsible rubber sourcing; announcing its new sourcing policy for NR as early as 2016, as it formed an alliance with the WWF. The policy, pledged to the SNR-i initiative, highlights deforestation and human and labour rights, supply chain transparency, community farm development, and tyre efficiency.
Michelin says that the NR it uses comes exclusively from plantations that fully comply with the “zero deforestation” principles. As well, it ensures that its operations related to NR cultivation, harvesting and processing do not have any adverse effect on surface water or groundwater resources. A key point is its compliance to standards and regulations in the use of chemical products, as well as ensuring the conservative use of chemical inputs.
Ohio-headquartered Cooper Tire, a member of the TIP, is also a founding member of GPSNR. “Cooper believes that a coordinated, universal and standard industry approach is the right way to drive toward solutions in establishing and promoting sustainable natural rubber practices,” said Chuck Yurkovich, Senior Vice President, Cooper Tire Global R&D.
Japan-headquartered Yokohama Rubber Co Ltd (YRC), a signatory in SNR-i and a part of the TIP, has waxed a procurement policy to ensure NR sustainability within its supply chain. The policy also includes initiatives specific to the Japanese group, such as sharing the know-how accumulated through its “Forever Forest Project” to support compliance throughout the supply chain.
The said project involving manufacturing-related branches in Japan and overseas has targeted the planting of around 500,000 young seedlings by 2017, the 100th anniversary of the founding of the company. Yokohama is the seventh major global tyre maker to announce publicly a sustainable NR sourcing policy.
Germany-headquartered technology firm Continental also recently bared its sustainable NR policy, which points out six areas for development, namely engaging with suppliers and farmers; stakeholder engagement; increasing traceability; saving resources; recycling; and identification of alternative NR supply sources.
The above indicates Continental’s monumental role in research projects on Taraxagum rubber derived from Russian dandelion plants, which can also be grown in temperate regions using existing agricultural land and thereby helping to substantially reduce the distances raw material has to travel to some of its major production sites.
The Goodyear Tire & Rubber Company’s version of its NR procurement policy, which was announced in April this year, has a similar train of commitment to responsible sourcing, to address deforestation, land grabbing, and human rights in the areas of the world where NR is produced. Goodyear, one of the world’s largest tyre companies, with 48 manufacturing facilities in 22 countries worldwide, is also a member of the TIP.
South Korean tyre maker Hankook’s sustainable NR policy aims to demand for compliance with laws and regulations, and code of ethics among members of the NR value chain of the country in where it operates its businesses. Along the same token, the company declared that it will demand for protecting the environment and minimising the environmental impact of its business by avoiding use of HCV areas, the HCS areas, and peatlands for the cultivating NR.
Additionally, Hankook stressed against deforestation and land grabbing “for biodiversity, and minimise impacts on local communities, as well as conservation of natural resources to maintain sustainability.”
As well, Hankook plans to help improve the overall quality of life of the NR growers, generally smallholders, and to upgrade productivity and quality of NR. The company was listed in Dow Jones Sustainability Indices World (DJSI World), the world’s foremost sustainability and investment assessment index, for three consecutive years from 2016-2018, proving its status as a representative company of sustainability management.