Pet coke helps in conservation of natural resources
The industry fulfills the balance by procurement through imports, open market operations, using pet coke and lignite. Nearly two-thirds of world pet coke production is consumed by the cement, power and steel industries. The cement industry uses pet coke for its higher calorific value, which is nearly double that of indigenous bituminous (mineral) coal. Thus, burning pet coke leads to the saving of almost double the quantity of bituminous coal, and it also curbs CO2 emissions. Secondly, due to its low ash content, low-grade limestone can be used in the manufacturing process. How can the problem of emissions be tackled?
The industry faces some challenges in using pet coke, like higher energy consumption in grinding, difficulty in burning, and higher SOx and NOx emissions. However, these issues can be effectively tackled by the application of modern technology, and emissions can be kept within permissible limits. The Indian cement industry is well equipped to tackle the pollution problem, as per the new CPCB (Central Pollution Control Board) norms. What are the commercial and policy issues which are likely to affect the usage of pet coke? Power and fuel costs account for 27-29 per cent of the total operating costs for cement companies. While the demand for cement has had its ups and downs, the one thing that has remained constant is the concern over pet coke prices. Pet coke and imported coal prices have recorded a consistent increasing trend, and most cement makers are apprehensive over future pet coke prices. However, soon, the focus might shift to environmental policies on the usage of pet coke.
According to some media reports, the Environment Pollution (Prevention and Control) Authority is considering imposing a ban on polluting industrial fuels such as fuel oil and pet coke in the National Capital Region (NCR), in a bid to curb air pollution. Expectations are that the government might extend the policy on polluting fuels to other parts of the country, over a period of time. A clean environment cess of Rs 400/tonne is currently levied on pet coke. Thus, additional taxes on pet coke or restriction on its usage as a fuel for cement plants would push operating costs higher.
According to a report, substitution of pet coke with imported coal would result in a nearly 21 per cent increase in per unit fuel costs. This doesn't include the impact of higher transportation costs. One way out could be to raise cement prices and pass the burden on to the consumers. (However), in an environment where demand is still not very strong, cement makers may find it difficult to raise prices.