CONFIDENTIAL

“Technology and Innovation in the use of Micronized Rubber Powder in today’s Green World”

11 April, 2013

1 | Lehigh Technologies Inc.

CONFIDENTIAL

• Setting the Stage and What we are Learning

• Who is Lehigh Technologies

• Technical Presentation

• What Does it All Mean in Terms of Green?

2 2 2 | Lehigh Technologies Inc.

CONFIDENTIAL

Millions of End-of-Life Tires Generated Each Year

292

30 112 80 250

Energy Recovery Civil Engineering

Landfill Stockpiled Data Not Available

3 3 3 | Lehigh Technologies Inc.

The First Chemical Revolution

dyes/pigments

metals

soaps

oil and gas discoveries

carbohydrates

cracking/refining

synthetic chemistry

atomic theory and the chemical bond

1800s 1850-1900 1900-1930

4 4 4 | Lehigh Technologies Inc.

The World Today – 3 Challenges

4lbs /person/day

over 200 million tons per year

oil prices over $80 and spiking to

>$100/bbl

borrow-buy-burn is US energy

strategy

world population 7B people

1 billion in the

developed world consume as much

energy as the other 6B.

5 5 5 | Lehigh Technologies Inc.

The Second Chemical Revolution

• Bury or burn is not a solution • Vast resource pools available • Huge technology challenge

infinite cycles of use

• Must be waste based. • Amyris, Kior, Renmatix, Genomatica • Small companies leading

sustainable production of

building blocks

• Principles of Green Chemistry • Chemical companies leading

efficient use of existing carbon

sources

6 6 6 | Lehigh Technologies Inc.

Micronized Rubber Powder Industry – Lehigh Experience

Image of industry: Reliability of supply-process safety; quality Scale-not capable of supporting global applications Capitalization “Tried it 15 years ago – didn’t work”

Absence of technical knowledge: No shortage of conjecture Very little data-insufficient experimental rigor Potential customers “ on their own” No technical knowledge = no adoption

Long sales cycles: All performance markets have long development cycles-testing, optimization, re-

testing, production trials, optimization-launch-that’s why stuff works! All markets need foundational knowledge and technical support-customers rarely

have sufficient resources to do this-mindset matters.

7 7 7 | Lehigh Technologies Inc.

Infinite Uses – The Next Steps

Change in mindset: Move from “getting rid of waste material” to “supplier of specialty materials”. Good science and technical support drive adoption. This changes the way everything is done.

Raw material type and structure: Different rubber compositions and tire components behave differently in complex

formulations-tire compounds, asphalt systems, plastics etc. Only limited ability to provide discrete raw materials for specific uses. This requires “demand” and “capability”.

History suggests that the value proposition enables adoption not subsidies: Chemical building blocks have always delivered performance at economic cost No customer pays more unless the material delivers more Bio-based feedstocks, solar cells etc are burdened with this issue We must drive to provide value and performance-

Lehigh Technologies: Overview

Key Facts

Headquartered in Tucker, GA

Founded in 2003

75 employees

Blue Chip Investors:

Proven Technology

+140 million tires manufactured utilizing Lehigh’s PolyDyne™

45,000MT of annual manufacturing capacity

5 out of top 10 tire manufacturers companies are Lehigh customers

Up-cycle post-consumer scrap

ISO 14001 / 9001 Certified

PolyDyne / MicroDyne

Third Party Tire Recycler

Tires Asphalt Plastics Coatings Sealers Others

Lehigh Technologies is a technology driven green materials manufacturer that turns end-of-life tires and other post-industrial rubber into sustainable powders that are used in a wide range of

high-value industrial and consumer applications.

9 9 9 | Lehigh Technologies Inc.

CONFIDENTIAL

Lehigh Technologies Particle Sizes Range from 40 to 300 Mesh – Clean: Metal & Fiber Free

40 Mesh / 400 µ 80 Mesh / 180 µ 140 Mesh / 105 µ

200 Mesh / 75 µ 300 Mesh / 50 µ

PolyDyne 40 PolyDyne 80 PolyDyne 140

PolyDyne 200 PolyDyne 300

Expanded Product-Line to Include EPDM, Nitrile, Butyl & Natural Rubber Powders in Certain Sizes

CONFIDENTIAL

Optimization of Rubber Compounds: Incorporating Sustainable, Micronized Rubber Powders

Agenda Introduction Experimental Results and Discussion Addition Point of Micronized Rubber Powder (MRP) Sulfur-Accelerator Optimization Particle Sizes

Summary of Findings and Recommendations

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Introduction The status of End-of-Life Tires1

On a global basis each year, one billion tires become unusable and are classified as end-of-life. In the European Union, the

practice of land filling tires was banned in 2006.

There is much work yet to be done worldwide to encourage and teach rubber article producers ways to incorporate more micronized rubber powder, MRP, into new rubber products.

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The need for the work The rubber rheological and

physical properties are adversely affected when MRP is added to the mix Cure rate and viscosity increases General physical property decline Reduced performance in abrasion,

higher heat build-up and compression set, and increased hysteresis

Many rubber article manufacturers do not modify their base recipes when incorporating MRP.

1. ETRMA source document

Introduction Many researchers have offered explanations for the reported losses in

rheological and physical properties when incorporating MRP into new rubber 1-9

MRP particles in new cured rubber are discontinuities and act like stress-raising flaws.4

Scanning electron microscope (SEM) photographs showing improper bonding of MRP to the new rubber matrix.6

The decreased modulus is caused by sulfur in the new rubber matrix migrating into the MRP causing a lower cross-link density in the final product.2,3,9

The shorter scorch times and faster cure rates which are explained by the migration of accelerator fragments from the MRP into the new rubber matrix.3

Trouser tear resistance actually improves slightly and this effect was explained by the theory of crack tip blunting.4

Reviews and summaries were presented previously by this author elsewhere.7,8

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1. D. Gibala, K. Laohapisitpanich, D. Thomas, G. R. Hamed, Rubber Chem. Technol. 69, 115(1996) 2. R. A. Swor, L. W. Jensen, M. Budzol, Rubber Chem. Technol. 53, 1215(1980) 3. D. Gibala, G. R. Hamed, Rubber Chem. Technol. 67, 636(1994) 4. D. Gibala, D. Thomas, G. R. Hamed, Rubber Chem. Technol. 72, 357(1999) 5. M. D. Burgoyne, G. R. Leaker, Z. Krekic, Rubber Chem. Technol. 49, 375(1976) 6. A. A. Phadke, S. K. Chakraborty, S. K. De, Rubber Chem. Technol. 57, 19(1984) 7. F. Papp, Technical Challenges for the Recycled Rubber Industry. Presented at the ITEC2010, Cleveland, Ohio, September 21-23, 2010 8. F. Papp, Optimization the Use of Micronized Rubber Powder, presented at a meeting of the Rubber Division, American Chemical Society, Cleveland, Ohio, October 11-13, 2011 9. Z. I. Grebenkina, N. D. Zakharov, and E. G. Volkova, International Polymer Science and Technology 5, No. 11, 2 (1978)

Addition Sequence Ingredients

Base Compound

PHR

First Pass ESBR1500 (Non-oil extended) 70.00 First Pass High Cis Polybutadiene Rubber 30.00 First Pass Micronized Rubber Powder (MRP) From Whole Tire As Per Studies First Pass N339 Carbon Black 65.00 First Pass Heavy Naphthenic Process Oil 25.00 First Pass Homogenizing Agent 1.00 First Pass Alkyl Phenol Formaldehyde Novolak Tack Resin 3.00 First Pass 6PPD Antidegradant 2.50 First Pass TMQ Antidegradant 1.50 First Pass Microcrystalline and Paraffin Wax Blend 2.50 First Pass Zinc Oxide Dispersion (85% ZnO) 3.53 First Pass Stearic Acid 2.00

Finish Pass TBBS Accelerator 1.00 Finish Pass Sulfur Dispersion (80% Sulfur) 2.50 Finish Pass Retarder N-(cyclohexylthio) phthalimide 0.10

Total PHR Finish Batch 209.63 Density kg/l 1.126

Experimental – Base Compound

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Experimental Procedure All mixes were performed in a 1.6L

Farrel Banbury internal mixer. Mixing was conducted either as a two

or three pass mix

Milling was performed on a KSB 2-roll mill 33 cm x 15 cm.

In all studies for each operation, weighing, mixing, curing, and testing, a unique randomized sequence was employed to reduce or eliminate bias scatter of the data.

Some of the experimental designs used replication of batches, and some of the designs with replicated batches used a procedure of blending the master batches for reducing variation.

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MDR2000 Rheometer ASTM D 5289 @ 160°C

Tensile, Elongation, Modulus ASTM D 412, unaged & oven aged

Trouser tear resistance, ASTM D 624 T, unaged & oven aged

Hardness tested with Rex Digital Durometer, ASTM D 2240 Type A on rebound specimens

BF Goodrich Flexometer ASTM D 623, Method A

Zwick Rebound ASTM D 7121 Zwick Rotary Drum Abrader ASTM D

5963, Method A Static Outdoor Exposure (20% Strain)

ASTM D 518, Method A

020406080

100120140160180200

Control 3% 6% 9% 12%

Perc

ent

Flexometer Heat Build-Up and Compression Set Tread with 177 Micron MRP

Control HBU Comp Set

Introduction

16

0

20

40

60

80

100

120

Control 3% 6% 9% 12%

Perc

ent

MDR Rheometer 160°C Tread with 177 Micron RRP Normalized Time to Stated Property

Control Scorch Ts1 T10 T90

0

20

40

60

80

100

120

Control 3% 6% 9% 12%

Perc

ent

Normalized Physical Properties of Tread with 177 Micron MRP

Control Tensile Strength 300% Modulus Elongation @ Break

0

20

40

60

80

100

120

Control 3% 6% 9% 12%

Perc

ent

Normalized Abrasion Resistance Index and Rebound @ 60°C Tread with 177 Micron MRP

Control AR Index Rebound 60°C

Which addition point in the mix for the MRP gives better physical properties? In the first master pass with the following

Polymers Carbon black Chemicals

In the finish pass with curatives

Take advantage of any remaining bonding capability?1

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Addition Point of MRP

Mix Procedure Mix Pass First Pass Second Pass Finish Pass

Mix Time 0 1 2 4 6 5 2

Material BMB ½ CB ½ CB Chemicals Stop Remill Curatives

Addition Polymers ½ MRP ½ MRP MRP Mixer In mixer MRP

MRP Oil

1. Private conversations and data.

Addition Point Test Results

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81 82 78

100 92 96 99

89 87 81

0

20

40

60

80

100

120

Control 300 µm MRP 10%w/P

300 µm MRP 10%w/CB

300 µm MRP 10%w/CH

Perc

ent

Normalized Basic Physical Properties 300 µm MRP @ 10%

Tensile E@B 300M

77 71

100 91 94

84 75

0

20

40

60

80

100

120

Control 177 µm MRP 10% w/CB 177 µm MRP 10% w/Fin

Perc

ent

Normalized Basic Physical Properties 177 µm MRP @ 10%

Tensile E@B 300M

Results of the addition point in the mix for the MRP Earlier in the first pass for optimum tensile and modulus

Later in the first pass mix for optimum elasticity

Sulfur-Accelerator Optimization The study design used the

base recipe shown earlier in a two pass mix version

The 177 µm MRP from whole tire was used from 2% to 14% by weight loading

Sulfur loading from 1.5 phr to 4.0 phr

TBBS loading from 0.2 phr to 1.4 phr

The DOE used was a central composite design, response surface method, with the aid of Design Expert® software published by Stat-Ease, Inc.

19

0

20

40

60

80

100

120300%M

Hardness RT

Tensile

EB

Max Torque

T90

Rebound RT

Rebound 70°C

Tear Str

Abrasion Loss

HBU

Comp Set

177 Micron MRP 10% Loading Sulfur Optimization Actual Data

Control

177µm MRP

177µm MRP+S

Performance From Actual Mix

20

Control 177 µm 177 µm+S MRP % 0.0 10.0 10.0 Sulfur phr 2.0 2.0 2.5 TBBS phr 1.0 1.0 1.0

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Particle Size Study Project Description MRP of 400, 300, 177, and 105 µm (commercially from whole tire) MRP loadings of 3%, 6%, and 10% Standard tread with SBR Two batches of control compound and one mix each of the MRP

batches made Control master batches blended together before mixing the next pass Randomization used for each step All MRP added with the carbon black in the first pass Three pass mixing used with sulfur and accelerator optimization Researchers in the UK estimated the intrinsic flaw size of carbon black

filled SBR, without MRP, to be 130 μm1

1. P. Kumar, Y. Fukahori, A. G. Thomas, J. J. C. Busfield, Rubber Chem. Technol. 80, 24(2007)

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CONFIDENTIAL

Effect of Particle Size on Physical Properties

80

85

90

95

100

105

110

80 85 90 95 100 105 110

Tens

ile S

tren

gth

(Per

cent

)

Elongation @ Break (Percent)

Normalized Unaged Tensile vs. Normalized Unaged E@B

Control

400 µm 3%

300 µm 3%

177 µm 3%

105 µm 3%

400 µm 6%

300 µm 6%

177 µm 6%

105 µm 6%

400 µm 10%

300 µm 10%

177 µm 10%

105 µm 10%

PD40+

PD84+

PD80+

PD140+

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CONFIDENTIAL

Effect of Particle Size on Physical Properties

80

85

90

95

100

105

110

80 85 90 95 100 105 110

Tens

ile S

tren

gth

(Per

cent

)

300% M (Percent)

Normalized Unaged Tensile vs. Normalized Unaged 300M Control

400 µm 3%

300 µm 3%

177 µm 3%

105 µm 3%

400 µm 6%

300 µm 6%

177 µm 6%

105 µm 6%

400 µm 10%

300 µm 10%

177 µm 10%

105 µm 10%

PD40+

PD84+

PD80+

PD140+

Summary of Findings & Recommendations For optimum tensile and modulus, mix MRP’s into the first pass, either with the

polymers or the carbon black. For optimum E@B, mix MRP’s later in the first pass with the chemicals

Increasing the sulfur and slightly decreasing the accelerator levels can recover many of the physical properties to nearly match the same compound without MRP

There appears to be no antidegradants migrating from MRP’s into the new rubber matrix when the MRP’s have been made from end-of-life tires

For products with demanding performance requirements, such as tires, the largest particle size MRP to use at 10% loading while maintaining basic physical properties is the 105 µm product

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CONFIDENTIAL

Micronized Rubber Powder Applications – cont’d

Sound Dampener, Vibration Control,

Insulator, Improves

Durability

Sustainable Material,

Lowers Costs

Waterproofs, Improves Traction

Wat

erpr

oof

Barr

ier

Mem

bran

es

Poly

uret

hane

Fo

am

Tire

s Polypropylene Applications

Asphalt Roofing

Underlayment

Waterproofs, Sound

Dampener, Insulator

HD

PE Applications

Sustainable Material,

Lowers Costs

Better Cost Management,

Sustainable Materials without Negative

Performance Impact

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CONFIDENTIAL Environmental Benefits of Lehigh’s Sustainable Micronized Rubber Powder

Lehigh’s Micronized Rubber Powder eliminates waste from going to landfills: end-of-life tires and other post-industrial rubber

Every kg of Lehigh’s Micronized Rubber Powder saves 6.70 liters of oil*

Every pound of Lehigh’s Micronized Rubber Powder saves approximately

10kWh of energy*

Micronized Rubber Powder releases nearly half the CO2 required to manufacture synthetic rubber

Same amount of oil needed to fuel a passenger car for 18 km

Same amount of energy needed to run a medium window-unit AC for 10 hours

Claims developed by Sustainable Design and Manufacturing Program at Georgia Institute of Technology

*vs. synthetic rubber

27 27 27 | Lehigh Technologies Inc.

Global Tire Companies Using MRP – Increasing their Efforts to Produce a Cost Effective, Sustainable Tire

Percent usage of recycled rubber doubled between 2008 – 2010 Source: Yokohama 2011 CSR Report

ECOPIA EP422 (ECO)

“We have a number of efforts going on in that [sustainability] direction; one of them is to use recycled rubber.” “We are already using recycled rubber.” - Goodyear Chief Technical Officer, Jean-Claude Kihn Source: TireBusiness.com

Play

Recycled Ground Rubber Made from ground-up post consumer tires, it contributes to 5% of the tread compound Source: Bridgestonetire.com

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CONFIDENTIAL

Thank You