Why in news?

• The Directorate General of Foreign Trade banned the use of imported petcoke as fuel.
• Use of Petcoke is allowed only for cement, lime kiln, calcium carbide and gasification industries when used as the feedstock or in the manufacturing process on actual user condition

Why this relaxation?

1. The decision to modify its ban was largely due to the government’s submissions that petcoke is used as an ingredient and not as fuel in the cement industry
2. The sulphur is mostly absorbed in the process of cement-making
3. Hence the Court has relaxed its ban on the use of petroleum coke (petcoke) and allowed cement and limestone industries to use it

About Petcoke

• Petcoke is an exceptionally polluting form of carbon which is banned in several countries due to its severe toxicity.
• Petroleum coke or petcoke, is a final carbon-rich solid material that derives from oil refining.
• It is categorized as a “bottom of the barrel” fuel as it is essentially residual waste material which is obtained after refining coal to extract lighter fuels like petrol.
• Petcoke is abundantly used in India in several manufacturing industries such as cement, steel and textile and it is generated in vast quantities by refineries as it is significantly cheaper that coal, has high calorific value and is easier to transport and store.

Composition

• Petcoke is over 90 percent carbon and emits 5 to 10 percent more carbon dioxide. (CO₂) than coal on a per-unit-of-energy basis when it is burned.
• Petcoke has a higher energy content therefore it emits between 30 and 80 percent more CO₂than coal per unit of weight.
• The difference between coal and coke in CO₂production per unit energy produced depends upon the moisture in the coal (increases the CO₂ per unit energy – heat of combustion) and volatile hydrocarbon in coal and coke (decrease the CO₂ per unit energy).

What it is used for?

• High-grade petcoke which is low in sulphur and heavy metals can be used to make electrodes for the steel and aluminum industry.
• But the majority of petcoke manufactured globally, approximately 75-80%, is of a much lower grade, containing higher levels of sulphur and heavy metals and is used solely as fuel.
• In recent years, petcoke is also being used in captive power generation plants in India

Implications

Health hazards

• While vehicular fuels like petrol and diesel contain 50 parts per million (PPM) of sulphur oxide, furnace oil contains 23,000 PPM and petcoke contains a whopping 74,000 PPM of sulphur content which is released into the atmosphere as emissions.
• Petroleum coke is a source of fine dust, which can get through the filtering process of the human airway and lodge in the lungs. They can cause serious health problems.
• Apart from sulphur, petcoke also releases a cocktail of other toxic chemicals such as nitrous oxide, mercury, arsenic, chromium, nickel, hydrogen chloride and greenhouse gases (GHG) which contribute to global warming.
• Petcoke is much more potent than coal and causes greater harm to the environment and health.
• According to a 2015 report published by The Lancet Commission, 8 residents of Delhi die each day as a result of air pollution. Delhi has been ranked as India’s most polluted city and is also among the world’s most critically polluted cities.
• As per the report, India has topped the list of pollution related deaths in 2015 with a staggering 2.5 million deaths due to pollution. The report also revealed that only a handful of cities in India comply with the air quality standards prescribed by the Central Pollution Control Board and identified that the primary cause behind increasing air pollution as fossil fuels.
• Petcoke has a deleterious effect on the respiratory system and particulate matter can get embedded in lung tissues, causing serious long term health hazards.

Environmental implications

• Petcoke is an extremely stable fuel which means there is little risk of combustion during transportation, but due to its high carbon content when it does combust it releases up to 10% more CO2 per unit of energy that normal coal. That’s higher than almost any other energy source in existence and makes petcoke a huge contributor to the creation of greenhouse gases.
• Increased pollution controls are required during petcoke combustion to capture the excess sulphur found in low grade petcoke. The heavy metal content of petcoke has also left many worried, both at the effects of releasing it into the air when petcoke is burned, and the implications it has for the local environment during storage.

India’s carbon tax model and its impact on industry

• The reason for the petcoke menace in the recent years can be directly attributed to the Central Government’s inherently flawed carbon tax policy.
• Carbon tax was introduced in India in 2010 and has since its inception been fraught with complications due to its improper structuring and pervasive maladministration.
• Among the many intrinsic loopholes in the carbon tax policy is its questionable coverage. Unlike many other jurisdictions such as Australia, the scope of India’s carbon tax is myopically restricted to coal, thereby excluding other forms of greenhouse gases (GHG) emitting fuels like petcoke and furnace oil; many of which have a deeper impact on the environment and health than coal.
• The main objective of carbon tax is to mitigate negative externalities of fossil fuels on the environment, and act as a pigouvian tax, logic dictates that it should be applicable on all sources of carbon emissions
• Although petcoke is much more harmful than coal both from an environmental and health perspective, there is no tax or cess levied on the use or production of petcoke.
• In order to circumvent the current carbon cess of Rs 400 per metric tonne on coal, cement and steel manufacturers have been heavily relying on petcoke, thereby increasing carbon emissions and air pollution.
• While India witnessed a decrease in coal imports by 20 million tonnes last year, petcoke imports doubled exceeding 10 million tonnes.

Loopholes in carbon tax policy

• India’ carbon tax policy has always been weak and riddled with inefficiencies; however, post-GST it has become positively redundant.
• Earlier, proceeds from the carbon cess used to be accumulated in an earmarked non-lapsable fund known as the National Clean Energy Fund (NCEF).
• The NCEF was supposed to be used for funding clean energy projects and encourage industries to shift from fossil fuels to clean energy.
• Currently, China and India are the leading consumers and importers of petcoke in order to catalyze rapid industrialization and economic growth.
• Since 2014, China has steadily been decreasing its dependence on petcoke by shifting to cleaner alternatives. India continues to increase its consumption of petcoke and other non-carbon fossil fuels.