India's apex court has asked a commission to review the annual quota system for imports of anode-grade green petroleum coke (GPC) that it fixed in 2018, potentially allowing higher overall seaborne demand.
The review is a major development for an Indian calcining industry that has struggled to operate at full capacity over the past five years because of import restrictions and limited domestic availability of the key raw material. The situation also led to legal disputes among the calciners.
The Supreme Court on 10 October agreed that the 2018 Environment Pollution (Prevention & Control) Authority (EPCA) report that formed the basis of its import quota decision needed to be re-examined "holistically", Malvika Kapila, an advocate representing coke calciner Carbon Resources, said.
Carbon Resources is one of the calciners that did not receive an import quota for the 2023-24 fiscal year ending 31 March, as Indian trade authorities realigned allocations this year in reaction to a January Supreme Court order.
That decision ordered the Directorate General of Foreign Trade (DGFT) to revise import allocations because it had been issuing limits to certain calciners that did not match the original October 2018 EPCA report. This particularly applied to larger calciner Sanvira Industries, but also to smaller calciners like Carbon Resources that were not listed in the EPCA report. The DGFT awarded quotas to just six calciners for 2023-24, down from 15 companies the year earlier. It also awarded only 1mn t this year of the court's mandated limit of 1.4mn t/yr, leaving 400,000t reserved for further allocation subject to final court orders.
The court has directed the Commission for Air Quality Management (CAQM) to look at the entire issue afresh and submit a report in three months, added Kapila. In the meantime, calciners who rely on imported coke can approach CAQM to secure quotas from the 400,000t quota balance, she said.
In July, the Court dismissed a petition from Sanvira seeking a higher GPC import quota.
The country's top calciner Rain Industries had challenged the DGFT's allocation to Sanvira based on its current capacity to produce 330,000 t/yr of calcined petroleum coke (CPC), since its stated capacity in the EPCA report was 200,000 t/yr. This smaller number was used to determine the overall industry's 1.4mn t cap.
Rain had been preparing to start up a 370,000t/yr vertical shaft calcining unit prior to the 2018 ruling, but this capacity was not included in the EPCA report, leading it to receive lower raw material allocations. The Supreme Court has denied a number of appeals to raise this quota over the years. This forced Rain to delay start up and then run the facility below its full capacity. Rain was also forced to temporarily shut a kiln at its India operations last year because of GPC shortage and lower quota allocation.
Positive development for smelters
The development could be significant for aluminium smelters too as the 2018 order also fixed a 500,000t/yr limit on CPC imports, a market participant said. Smelters have been advocating for higher import quotas as their capacities have also expanded while domestic CPC availability continues to be limited.
The DGFT issued the full 500,000t CPC import quota in March.
India's top aluminium producer Vedanta started importing pre-baked anodes from China in 2022-23 to meet input requirements for its expanded aluminium manufacturing capacity, as it cannot import the required CPC. CPC is the raw material required to produce aluminium anodes, an input consumed during primary aluminium production.
