The World's Leading Tire Manufacturers Are Turning to Synthetic Biology -- But Not for the Reason You May Think

This pile of 1 million tires would produce 55,000 gallons of toxic oil runoff into the environment if set ablaze. Source: Ohio EPA.

The U.S. Environmental Protection Agency has made tremendous strides in reducing scrap tire stockpiles in the past 20 years. In 1992 there were over 1 billion scrap tires in the United States, but that number plummeted to just 128 million in 2007. While solid used tires are not considered hazardous waste by the U.S. EPA, tire piles pose a significant fire risk. Worse yet, one tire can produce over 2 gallons of oil as well as heavy metals and gaseous aromatic compounds when burned, all of which are serious environmental toxins. That makes cleanup more logistically challenging than it seems.

Engineers have tackled the problem with creativity -- recycling tires into various petroleum products, sound barriers for highways, flooring for playgrounds, turf for athletic fields, and more. That's a good start, but there's still one scrap tire for every American household. Knowing that, you probably wouldn't be surprised to learn that leading tire manufacturers such as The Goodyear Tire & Rubber Company (NASDAQ: GT  ) are interested in synthetic biology pioneer Amyris (NASDAQ: AMRS  ) for its sustainable fermentation approach to producing, with major help from leading chemical company Kuraray, liquid rubber from the hydrocarbon farnesene. But, surprisingly, sustainability isn't the motivating factor driving companies to develop tires with renewable chemicals -- and that's actually great news for Amyris.

Sustainability is nice, but value is king
I earned a degree from the country's leading tree hugger, er, environmental school, so I've listened to numerous arguments made in favor of protecting the environment from unsustainable practices. Saving a tiny snail that lives in only one prairie in Kansas (exaggerated example, of course) may sound like a sexy and important idea -- and it may be rooted in fact and backed up by reams of data -- but the reality is that it's mighty difficult to get companies to change suppliers just because there's a more sustainable option available. And that's exactly why it's so important for Amyris' Liquid Farnesene Rubber not to lean on the sustainability argument alone.

Liquid rubber mixtures are poured into molds similar to these before being vulcanized into solid tires for road use. Source: TradeKorea.

Why, then, are 13 of the world's leading tire manufacturers running to Amyris and synthetic biology? It all boils down to value created from more efficient production processes. Tires consist of natural rubber (isoprene), synthetic rubber, and sometimes mineral oils, which play the role of softener. Liquid Farnesene Rubber replaces a key monomer (presumably from the synthetic rubber component) in tire formulations. That alone is not significant, but tire manufacturers have discovered that the much lower viscosity of Amyris' renewable product makes it significantly easier to work with during manufacturing. Decreasing viscosity increases throughput, which allows tire manufacturers to produce more tires (with less energy) per unit time at a lower cost per unit. That has the potential to boost their margins and protect selling prices for Amyris and Kuraray. It's a simple win-win in economic terms.

Of course, the same physical properties of Liquid Farnesene Rubber that make it easier to work with during manufacturing also significantly reduce rolling resistance while driving. What the heck is that? When you accelerate your vehicle or cruise down the road, you put torque on your tires. The process stresses the tires and causes them to deform, forces the molecules within the tires to rub together, and creates friction and heat, which have a detrimental impact on the fuel economy of your vehicle. Therefore, significantly reducing that friction and heat can create a considerable boost in fuel economy.

Source: Maxxis Green.

For instance, Assurance Fuel Max from The Goodyear Tire & Rubber Company can improve fuel economy by 4% over their lifetime of about 65,000 miles. That may not seem significant, but it equates to 2,600 miles' worth of fuel. In other words, current-generation low-rolling-resistance tires nearly pay for themselves in fuel savings. How much better will next-generation tires with Amyris' Liquid Rubber Farnesene perform? We may find out soon enough: The first tire produced with Amyris' chemical should be sold by the end of 2014.

Foolish bottom line
That key feature will take center stage in the marketing strategy employed by tire manufacturers such as The Goodyear Tire & Rubber Company when pitching new tire formulations to consumers. Simply put, consumers don't really care about less viscous raw materials during production, but they will care about enhanced fuel economy and, to some extent, more sustainable raw materials. Better yet, the formulations incorporating Liquid Farnesene Rubber could even survive longer than conventional tires. Safety tests conducted by major manufacturers are expected to wrap up in 2014, but previous testing of low-rolling-resistance tires has demonstrated comparable safety data compared with conventional tires. In other words, Amyris can help tire manufacturers gain multiple advantages without sacrificing, well, anything.

The tire market represents a significant opportunity for Amyris, and Liquid Farnesene Rubber only represents one of three major products that will be thrown at the opportunity. Coupling Liquid Farnesene Rubber with Solid Farnesene Rubber, other high-performance polymers derived from farnesene, and isoprene (to replace natural rubber) could allow Amyris to supply the great majority of the components of a tire. Perhaps the magnitude of the opportunity is summarized by the fact that CEO John Melo expects tire manufacturers to fund the completion of the half-completed 65,000 MT-per-year facility in Brazil (part of the SMA joint venture) by 2016, which would be fully dedicated to the tire market. Additionally, products sold into the tire market are not included in the company's projected $1 billion in revenue potential by the end of the decade.

I hope that introduces the amazing opportunity presented by the tire market, which I want to cover in great detail through multiple articles. Next time we'll dive into the financial details and the size of the tire market.

6 stock picks poised for incredible growth
Can Liquid Farnesene Rubber from Amyris become a life-changing investment and help you roll to retirement with little resistance? The opportunity is there, but execution and dilution make it difficult to say at this point. Such investments do exist. In fact, one of David Gardner's favorite stocks recently became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (3) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 21, 2014, at 9:30 AM, JazzyLawnService wrote:

    That's what I've been saying for years, I just thought that it would have been done already since they were building more facilities. The market traders are not interested in real investments and the shorts are waiting till the last minute to buy. It's common sense to see that tires are numerous and wasteful. I only wish that Amyris would come up with some biodegradable tires that could dissentergrate into particles. Then we could get rid of those old pesky tires. However thanks for the green info and good luck on buying in this volatile market.

  • Report this Comment On June 03, 2014, at 12:36 PM, LaureyWilliams wrote:

    Will all tires eventually be made with Synthetic Biology? This seems like a good way to go for making tires safe and affordable. I wonder if the tires I have right now were made out of Synthetic Biology.

  • Report this Comment On June 03, 2014, at 12:48 PM, TMFBlacknGold wrote:


    Amyris is making the binding agent for holding rubber components together. In the future, the company could also produce isoprene (natural rubber) from its platform. And, theoretically, synthetic biology could be utilized to produce the other rubber components.

    Unfortunately, there are no tires sold today (as of this comment) that have components from synthetic biology platforms. That will change later this year. If Amyris starts its 65,000 MT facility in 2016 and dedicates it fully to the tire industry, then its possible many more new tires will include these components by 2020.


Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2917798, ~/Articles/ArticleHandler.aspx, 9/1/2015 8:49:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Maxx Chatsko

Maxx has been a contributor to since 2013. He's currently a graduate student at Carnegie Mellon University merging synthetic biology with materials science & engineering. His primary coverage for TMF includes renewable energy, renewable fuels, and synthetic biology. Follow him on Twitter to keep pace with developments with engineering biology.

Today's Market

updated Moments ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 3:59 PM
AMRS $1.80 Down -0.01 -0.55%
GT $28.67 Down -1.10 -3.69%
The Goodyear Tire… CAPS Rating: ***