Goodyear’s Low Carbon Tire Project Makes Progress and U.S. Steel bets $3B on America


Episode Summary:

Pneumatic tires have been a fundamental technology in Western civilization for well over a century. They are essential for modern transportation, and their manufacturing has a significant COfootprint. In 2020, the Goodyear Tire & Rubber Co. launched a project to develop an entirely carbon neutral tire, a very difficult task. The company has unveiled a test tire demonstrating progress to date, and it has achieved a 70% reduction in net carbon emissions. To achieve this, the Goodyear team substituted biological materials such as rice husk derived silica and soybean oil as synthetic compund substitutes, and significantly, has developed alternate methods for producing the most critical tire additive, carbon black. Several different methods of low-impact carbon black production have been explored, including combustion of biological materials and synthesis directly from carbon dioxide itself.

The global steel industry is dominated by Asian producers, particularly China. But steel can be cost-effectively made in America through mini mills which use scrap as the primary input to produce higher value products such as high strength sheet and strip for the automotive and consumer goods industries. U.S. Steel, following up on the company’s recently acquisition of Big River steel in Arkansas, is investing $3 billion on an advanced mini mill with two electric arc furnaces capable of producing 3 million tons per year. 

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Transcript of this week's show:

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Segment 1: Most people don’t think much about tires. They’re round, black, and support just about every form of transportation from passenger cars and freight carrying trucks to airplanes. What isn’t readily apparent however is that pneumatic tires are a very high-technology product, and both the raw materials that go into tires and the processes used to manufacture them are carbon intensive. In 2020, the Akron- Ohio based Goodyear Tire & Rubber Co. set an ambitious goal: create a prototype tire made from 100% sustainable materials in 10 years. Two years in, the company has made progress and has unveiled a test tire with 70% sustainable material content. 

While natural latex and a synthetic rubber forms the bulk of a tire’s composition by mass, tires are in fact composite structures, with fabric or metal belts and metallic wire bead reinforcements. Rubber compounds are different in inner liner, sidewall and tread construction, and the additives used in each determine much of a tire’s performance, from grip, wear, UV resistance, permeability, flexibility and rolling resistance, among others. Some additives such as tackifiers are process aids that help keep the green tire together as it enters the mold. 

The sustainable prototype uses 13 novel ingredients in nine different critical tire components. Silica, a commonly used additive that enhances grip, is derived from rice husk ash, a byproduct of rice processing that is commonly discarded in landfills. Epoxidized soybean oil is a widely used plasticizer in PVC plastics, and Goodyear makes use of soybean oil to reduce the use of petroleum-based plasticizers. 

According to the company, the production of soy protein for food and animal feed results in significant soybean oil surpluses, making the product practical for tire manufacturing. Tire belts have been made from natural fibers, synthetic fibers such as nylon and polyester and steel. The sustainable tire uses resin recycled from waste plastics, reformed into high strength technical grade polyester. 

From both a CO2 and a structural perspective, however, carbon black is the critical ingredient. Carbon black not only gives tires their characteristic color, it adds strength to rubber compounds and made pneumatic tires a practical proposition for the automotive industry over a century ago. No compound has yet matched it for performance and cost. Carbon black has traditionally been produced by combustion of petroleum products, but the prototype tire uses three different carbon blacks derived from methane, plant-based oils and carbon dioxide itself. Carbon black made from combustion of biological materials reduces net CO2 emissions and if the product can be derived from CO2 directly, it could even be carbon negative. 

Goodyear states that the test tire performs well, and the tire business is extremely competitive. The green credentials of tires made today focus on low rolling resistance to reduce vehicle fuel consumption. Will future consumers opt for tires that are carbon neutral? By 2030, a tire’s CO2 footprint may be a selling proposition as important as traction, low noise and ride comfort. We’ll check in as this technology evolves. 


Segment 2: Steelmaking is the cornerstone of all industrial economies, but in the last 30 years, the industry has evolved into multiple segments serving unique markets. In overall tonnage, Asia leads the world, particularly China, but the American steel industry in fact has moved up the value chain, making more sophisticated alloys products and semifinished goods, particularly sheet and strip for the consumer goods and automotive industries. 

The key to cost-effective production for those markets has been the development of the mini mill. Mini mills use electric arc furnaces to melt scrap as the primary input, then adding alloying compounds in precise amounts to produce steels with highly tailored properties. U.S. Steel has just announced a very large $3 billion investment in Osceola, Arkansas, close to the company’s recently acquired Big River Steel plant. The new facility will use two electric arc furnaces with a 3 million ton per year steelmaking capability, and notably will launch the first US operation of an endless casting and rolling line. 

This technology is key to cost-effective production. Conventional processes involve the casting of steel into ingots or billets, which are subsequently reheated and passed to rolling mills for forming into useful shapes. Continuous casting, as the name implies, allows single step production by turning steel castings 90° into horizontal strands which can then be rolled immediately. It’s possible to make finished steel shapes in 1/10 the time of previous batch processes. 

Continuous casting isn’t new and U.S. Steel itself used the process in the 1960s. But the combination of the process with the flexibility of the electric arc furnace allows the company to achieve the high throughput rates of commodity steel production with higher value specialty steels, including electrical grades for fast growth applications such as electric motor production. Primary steelmaking from iron ore will never go away, but the new Arkansas facility suggests that the future of US steelmaking may be to selectively take market share in the high value product categories, then worked down the value chain toward commodity steels as automation improves.