India's Supreme Court has dismissed a petition by domestic calciner Sanvira Industries seeking a higher anode-grade green petroleum coke (GPC) import quota because of its increased production capacity.
The Supreme Court also upheld a Delhi High Court judgement that ordered Indian government authorities to revise GPC import allocations made to various calciners, overturning a decision that increased the proportion of Sanvira's quota.
The High Court noted that the annual import cap of 1.4mn t was based on the total production capacity as of 9 October 2018, which had been fixed based on the capacity disclosed by all the calciners, the Supreme Court said in its order dated 3 July.
Sanvira won approval to produce 330,000 t/yr of calcined petroleum coke (CPC) only after 29 November 2018. But its stated capacity was 200,000 t/yr as of 9 October 2018 when the Supreme Court fixed an annual quota of 1.4mn t for the calciners, the order said. If a producer's capacity has increased, any proportionate raise in its quota can only be granted after clearance by the Supreme Court since the overall quota will move beyond 1.4mn t/yr.
The quota system was based on an October 2018 Environment Pollution Control Authority (EPCA) report on the country's calcining capacity. Sanvira had an operational calcining capacity of 200,000 t/yr, a figure it submitted to the EPCA at that time. But on 29 November 2018 local authorities granted the calciner permission to begin operating its phase 2 expansion, taking its capacity to 330,000 t/yr. When the Directorate General of Foreign Trade's (DGFT), part of India's commerce ministry, initiated the process to award quotas, Sanvira sought a higher quota based on this expanded capacity.
Although this request was initially rejected on 3 June 2020, the DGFT ultimately granted it a higher allocation for the 2020-21 fiscal year ending 31 March. This was based on a 4 May 2020 certificate issued by the Andhra Pradesh State Pollution Control Board stating that Sanvira's installed capacity was 330,000 t/yr as of 9 October 2018, the date of the Supreme Court order.
The DGFT made annual quota allocations to Sanvira in the subsequent years based on this higher capacity. The DGFT allocation of a higher import quota to calciner Sanvira starting in 2020-21 upset the rationale of the Indian Supreme Court's 2018 order that fixed a maximum quota of 1.4mn t/yr of GPC imports to be divided to calciners proportionally, the High Court said on 10 January.
Excess quota
Although Sanvira can produce 330,000 t/yr, this does not automatically mean it is entitled to an increase in its share of the total imports, the High Court said. Fellow calciners are upset by the alleged excess import quota granted to Sanvira, arguing that these allocations were made in "excess of stipulated parameters".
The DGFT following the June 2020 meeting increased Sanvira's allocation to 311,247t for 2020-21, up from an initial allocation of 216,663t in 2019-20. It simultaneously reduced the allocation to calciner Rain CII Carbon from 553,574t in 2019-20 to 481,961t. Rain was one of the companies filing an appeal.
Indian authorities had provisionally allocated lower GPC import quotas to calciners for 2023-24, pending the outcome of this court case. The DGFT allocated an import quota for only 1mn t of GPC in a 12 May meeting, down from the usual annual quota of 1.4mn t.
