The market
The global asphalt and bitumen market is expected to reach 124 million metric tons in 2011, with estimated sales of $74.4 billion. Prices were as low as $115 per metric ton delivered to the refinery in 1999, rising to $200 in 2005 and exceeding $600 in the summer of 2011. Demand is projected to increase by 2.1% annually through 2013. This represents a slowdown compared to previous years, primarily due to slower growth in China, which nevertheless remains the world's largest growth market. The fastest-growing segment in developing countries is not road bitumen, but rather roofing bitumen, which already accounts for 10% of total production, compared to 84% for road surfacing. A small remaining portion is used for waterproofing ships. The demand for asphalt in roofing products currently represents a relatively small share of total roofing demand, thus offering growth opportunities in Asia (excluding Japan) and Latin America. China is expected to become the second largest domestic market in the world for asphalt roofing after the United States
One ton of asphalt 46 centimeters deep covers one square meter. Asphalt emulsions and polymer-modified bitumen are gaining ground, while traditional asphalt cement is lagging behind in the market. One of the major changes is the replacement of non-porous asphalt, which causes hydroplaning, with porous asphalt, which offers greater road safety. Besides the world's leading traditional refineries owned by well-established multinationals like Exxon Mobil, BP, Chevron, and Shell, the Latin American company Petroleos de Venezuela (PDVSA) has taken a dominant position on the international stage, as Venezuela possesses some of the largest bitumen deposits in the Orinoco oil sands, with reserves estimated at 300 billion barrels, matched only by Canada's Alberta reserves at 310 billion barrels. If these reserves were used at the current consumption rate of 4.4 million barrels per day, these countries could supply the world for approximately 400 years.
Innovation
While bitumen was used to waterproof ships and buildings in the cities of Babylon and Carthage millennia ago, its properties were also utilized in early photography, as bitumen on tin plates exposed to light produced black and white images. Later, it was also used as sound insulation in computers and household appliances. While most asphalt is extracted, it could also be produced from renewable sources such as sugar, molasses, and starch from rice, corn, and potatoes. However, today, most bitumen is made from petroleum byproducts of refining and used motor oil.
The main challenge for asphalt remains the massive amount of waste it generates, as roads must be resurfaced regularly due to wear and tear. In Europe, asphalt is currently recycled at a rate of 80%, twice that of recycled paper, glass, plastic, and aluminum combined. The Federal Highway Administration in the United States estimates that 91 million tons of asphalt are scraped or milled from roads during resurfacing and widening. Of this massive volume, 73 million tons are recovered. However, this enormous volume requires transportation and shipping from the road to recycling centers, leading to additional traffic congestion because the recycling and blending of 10 to 25% of the old asphalt into a new mix is done off-site.
Mr. Hisashi Hosokawa pursued a distinguished career as a career civil servant in the Japanese Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry), notably as Director-General of the Office of International Trade Policy, and concluded his government service as Vice-Minister for International Affairs. After mandatory retirement, Mr. Hosokawa made the exceptional decision not to be parachuted into a comfortable position within industry or a government agency (known as amakudari), but instead decided to become an entrepreneur. Since he also held significant environmental responsibilities, he focused on key industries where he believed specific innovations could steer them toward sustainability. Given the sheer volume of asphalt and the challenges the industry faces in transforming ordinary asphalt waste into higher-quality, more valuable porous asphalt, he assembled a consortium of Japanese industries and a group of experts. Building upon existing technology, he developed a system that not only recycles asphalt on-site but also transforms old paving material into superior porous asphalt, going beyond simply mixing 10 to 25% of old materials. His proven technology and process require only a maximum of 30% new materials, depending on the asphalt mix being used, to rehabilitate the road surface. He then established GreenARM Co. Ltd., based in Tokyo, to commercialize these solutions. Mr. Hosokawa has called his approach to asphalt recycling and other industrial designs he is developing “eco-billing”, differentiating this methodology from manufacturing.
The first cash flow
Mr. Hosokawa and his GreenARM team, including Professor Atsushi Kasahara, a prominent civil engineering scholar who conceived the idea, made rapid progress in designing and manufacturing a train of equipment and successfully demonstrated the technology's effectiveness with a government project following initial trials in Japan. Using a previous technology, a series of probes had been conducted on porous asphalt in Italy prior to the 2006 Winter Olympics in Turin, Italy. GreenARM also participated in a major initial contract with the Delhi State Government's Department of Public Works through a local joint venture in preparation for the 2010 Commonwealth Games, which resulted in the reclamation of 820,000 square meters of municipal road surface. The earlier in-situ recycling technology also demonstrated its superior performance in terms of timing and surface quality, fully rehabilitating the old asphalt.
The National Highway Authority of India (NHAI) has introduced mandatory recycling for road rehabilitation, with a focus on in-situ recycling. The equipment train preheats the surface asphalt mix, easily scarifies it on the road, and reconditions it into the desired mix on-site, reusing 100% of the reconditioned asphalt and blending it with a small portion of new material. The porous asphalt manufacturing technology includes an additional unit for separating asphalt particles by size after scarification and before mixing, and a double paver that lays the porous asphalt and mortar sub-base in tandem. Utilizing existing resources is a fundamental principle of the blue economy; by avoiding transportation and ensuring on-site recycling, it reduces both costs and material usage. In this case, the material reduction is a factor of nine. This provides sufficient financial incentives to justify the investment.
The opportunity
Road construction takes a heavy toll on the environment. Converting roads to porous surfaces ensures that rainwater follows natural drainage patterns. Hydroplaning is not only dangerous for drivers, but it also prevents water from being cleaned by a natural filtration process, leading to the accumulation of waste and toxins on and around the road. While asphalt/bitumen producers are a few large multinationals, road builders are almost always local businesses deeply embedded in the regional economy. The equipment changes required to implement the business model described above lead to a rapid depreciation of existing capital investments. Since equipment typically has a long lifespan, this results in resistance to change, especially when machinery is not fully depreciated. This presents an opportunity for contractors to make a difference. However, porous asphalt produced from existing road surfacing and a minor addition of fresh material reduces mining and shipping, and helps restore the water table. It's a game-changer that anyone with a sense of risk is willing to take.
