India is mulling whether or not it will ban the use of petroleum coke as a fuel on a national level, leaving the industries reliant on it to search for other viable options.
However, logistic constraints for domestic coal and rising prices for foreigner-sourced coal could prove a challenge to Indian cement players.
A supply problem
India’s ramping energy demand comes from many sources, with the main ones being the government’s increasing effort to reach higher rates of electrification in rural areas of the country, and growing industry demand for fuel across several manufacturing sectors.
Even as both state and private bodies ramp up extraction of coal for distribution and use across the country, the supply has been insufficient to meet the growth of several energy-intensive industries, among them cement. Therefore, firms have been relying on alternate fuel sources other than domestic coal suppliers, having first turned to international coal, and later to petcoke once coal prices started to rally and the government imposed an INR 400 per ton duty on coal imports.
Petcoke first proved a reliable fuel input as cement companies could use it in their kilns in the manufacturing process without having to execute many changes in their equipment. Its use in energy production also proved effective for similar reasons, with the cost-benefit value heightened as its initial value, when compared to coal, was very cheap, and it possesses a higher calorific value. Being a bottom-of-the-barrel leftover from the production of diesel, most companies that produce it tend to dispense of it as cheaply as possible, and the increase in prices proved a boon for refiners.
Read the full article in ICCM 42