Indian companies importing petroleum coke from Venezuela for the first time, trade sources and shipping data shown.
Petroleum coke, a by-product of oil refining and a substitute for coal, is favored by India due to the sharp increase in global coal prices.
According to three trade sources, Refinitiv vessel tracking data and Venezuela’s delivery schedules, India’s cement companies imported about 4 shipments of petroleum coke totaling 160,000 tons from April to June.
The data showed that another 50,000 tons of cargo and 30,000 tons of cargo are expected to reach India by August.
Why do Indian firms buy coke from Venezuela?
The ongoing Russo-Ukrainian war has driven up the price of commodities such as coal and crude oil, forcing Indian cement producers including JSW Cement, Ramco Cements and Orient Cement to import petroleum coke from Venezuela.
Indian firms are also buying petroleum coke from Venezuela because the country offers the same thing at a 5-10% discount compared to the US.
India, the world’s largest consumer of petroleum coke, imports more than half of its annual petroleum coke from the US, amounting to about 27 million tons.
Since 2019, the US has imposed sanctions on Venezuela’s oil sector to remove socialist President Nicolás Maduro from power. The Venezuelan oil sector is the most important global business for the country.
What is Petcox?
Petroleum coke or petroleum coke is the final carbon-rich solid material and residual waste recovered from petroleum refining. It is a spongy solid residue from the distillation of petroleum that can be burned as a fuel similar to coal.
Petroleum coke is a substitute for coal and contains a large amount of energy. It is classified as a “bottom of the barrel” fuel because it is obtained after coal has been processed to extract lighter fuels such as gasoline.
There are four main types of petroleum coke: needle coke, honeycomb coke, sponge coke and crushed coke.
Petroleum coke has been produced since the 1930s for the production of aluminium, steel, glass, paints and fertilizers. In addition, it is also used as a fuel in cement kilns, power plants and other industries.
Petroleum coke in India
Petroleum coke is widely used in power plants and in several manufacturing industries including cement, steel and textile mills in India.
Refineries produce it in large quantities because it has a high calorific value and is easy to transport and store.
According to a Reuters report, India is expected to double its imports of petroleum coke in 2022.
Petroleum coke consumption “increased 34% to 4.2 million tonnes during the quarter ended March, the fastest pace in nearly 6 years and the first quarterly increase in over 2 years.”
The use of petroleum coke in India is also under scrutiny due to increasing levels of pollution in major cities.
Environmental impact of petroleum coke
Petroleum coke is generally not used as a fuel due to toxic emissions, however the largest consumer of petroleum coke is the cement industry, which emits sulfur dioxide and is absorbed by the limestone. Indian cement companies account for about three-quarters of the country’s petroleum coke consumption.
Petroleum coke contains more than 90% carbon and emits 5–10% more carbon dioxide per unit of energy than coal when burned. It contributes to the emission of greenhouse gases. In addition to sulfur, it also releases other toxic gases including nitrous oxide, mercury, arsenic, chromium, nickel, and hydrogen chloride when burned.
Excess sulfur is found in low-grade petroleum coke and also contains heavy metals that are released into the environment or air when burned.
Petroleum coke is also a source of fine dust and can cause serious health problems in humans.
The US Environmental Protection Agency (EPA) has classified it as a highly stable compound that does not react with the environment.
According to the EPA, “petroleum coke has ‘minimal health hazard potential’ and is not known to affect the development, reproduction or induction of cancer. Petroleum coke is chemically inert, does not chemically react with water, does not dissolve in water, cannot be absorbed by living things, and does not absorb hazardous compounds by living things.”