Dealing with Petcoke

What is the issue?

• With restrictions on sulfur consumptions, petcoke is getting to be a favourable alternative.
• India has to react appropriately to this in the context of the environmental implications involved.

What is the recent challenge?

• Sulfur is a common impurity in crude that can cause respiratory problems and acid rain when it’s burned.
• The global shipping industry has started implementing regulations to limit its sulfur consumption.
• This will make the bunker fuel used in ships cleaner than the crude oil produced worldwide.
• Traditionally, it has been the cheapest, dirtiest fraction from refining.
• The rules on sulfur content will come into force at the start of 2020.
• The oil market and refiners would thus have to find another way to dispose of their by-products.
• One popular way of disposing this of late has been to sell it to India as a cheap petcoke.

How is petcoke an alternative?

• Petroleum coke or petcoke is a spongy, solid residue from oil distillation.
• It is a coal substitute and can be burned for fuel in the same manner as coal.
• It notably has a higher energy content.
• Petcoke has become an attractive raw material for power stations and cement plants in India.
• The loophole in India’s environmental taxes has facilitated this.
• Plain old coal attracts a clean-energy levy that has risen to Rs.400 a metric ton since it was introduced in 2010.
• On the other hand, petcoke has been exempt from this levy.
• Indian price for coal of comparable heating values in the region is Rs. 4,000 a ton.
• Given this and the high tax, petcoke has been a favourable alternative.
• Similar levy issues have favoured petcoke over natural gas as well.

How has petcoke use been?

• Petcoke was the fastest-growing fraction of oil demand in India.
• Its consumption is the second-biggest share of India’s petroleum consumption after diesel.
• It has outstripped even LPG and gasoline.
• While petcoke is richer in energy than coal, it can have 20 times as much sulfur too.
• The choking smogs have made India’s cities the world’s most polluted in recent years.

What are the measures?

• The Supreme Court last year banned the use of petcoke in New Delhi and adjacent states.
• It however allowed a reprieve for the cement companies that consume about half of it.
• Cement plants currently escape the court ban on the grounds that all their sulfur is removed in the production process.
• Government is planning a nationwide ban on using petcoke as fuel.
• Also, there are, reportedly, measures to halt imports.
• This is because petcoke produced overseas now accounts for about 40% of supply.
• Much of it is from U.S. refineries processing heavy Canadian and Latin American crude.

What is the way forward?

• The cement plants may not continue to be exempt in the future.
• But besides this, the government should change its clean-energy taxes.
• It must be ensured that the levy on petcoke is equal to that on coal.
• Nevertheless, it would become unfavourable for the global refining industry.
• But refineries can remove the sulfur altogether and turn it into sulfuric acid.
• This latter is a prized raw material for the fertilizer industry and chemicals manufacturing.
• This can even be fed back into refineries to produce ingredients for high-octane gasoline.
• The challenge of building sulfur plants which is costly has also to be reckoned with.

Source: Indian Express