Vikram Handa, MD - Epsilon Carbon

Making Li-ion battery manufacturing a reality in India

Vikram Handa, Managing Director - Epsilon Carbon, talks about commissioning of India’s first-ever LIB material manufacturing facility, their plans of expansion, and vision for 2021 and beyond.

What is the manufacturing capacity of Epsilon’s LIB facility and your plans with regards to investments and expansion?

Epsilon Carbon has formed a subsidiary, Epsilon Advanced Materials to enter the fast-growing LIB material space. We have currently commissioned our manufacturing unit with a capacity of 2500 tons per year (TPA) of anode precursor material with pilot facilities for further processing into synthetic graphite, which is the final anode active material. Apart from the manufacturing unit, we have set up a comprehensive laboratory to test synthetic graphite in a coin and pouch cell format. This aids us in quality control as well as a tool for continuous product development.

We plan to further ramp up our capacity to 15,000 TPA by 2021 and eventually to 50,000 TPA by 2025 with an investment of `500 crore in the next four years to scale up our capacity. We are also studying how to manufacture other key raw materials for LIB cells and lithium battery recycling.

China has been dominant supplier of graphite, a key element in Li-ion battery cells. How does Epsilon Carbon plan to end this domination and aid indigenous manufacturing?

Epsilon Advanced Materials’ key advantage is full backward integration of raw material from Epsilon Carbon -- the parent company. Epsilon Carbon in turn has long term agreements for sourcing of coal tar from steel plants within India. This complete backward integration allows us to produce very consistent raw materials for the LIB supply chain. Our integrated carbon complex location in Karnataka shares a lot of utilities within the units and all intermediate products are transported via closed pipelines

Vikram Handa. Source: Epsilon

therefore avoiding contamination and reducing logistic costs.

The anode is 25 percent of the cell by volume (depending on the chemistry) and we hope to support Indian cell manufactures by providing them this key raw material within India. Today, we are manufacturing for China, Japan, and Europe mainly and trials have been initiated with anode material producers and cell manufactures globally to start the testing and qualification phase. This is a key step towards company’s evolution plan to become the world’s first vertically integrated and sustainable producer of highperformance synthetic anode material in LIB supply chain.

We aim to support cell manufacturers that set up facilities in India and are in touch with companies who are exploring setting up cell manufacturing facility in India.

The supply of raw and refined material needed for the manufacturing of Li-ion batteries is extremely critical, how will Epsilon Carbon meet the accelerating demand?

Epsilon Carbon currently processes 350,000 tons of coal tar in India and we expect the coal tar availability to increase to a million tons in the next seven years. Raw material security is our key advantage and gives customers in China, Japan, and Europe the comfort that we will be able to ramp up our volumes and support them with consistent synthetic graphite material as their demand for raw material increases. Another key raw material for manufacturing synthetic anodes is power, and we are able to provide that from Epsilon Carbon through the waste gases from our Carbon Black factory which is also located within the Integrated Carbon Complex.

Epsilon advanced materials facility. Source: Epsilon

Cell manufacturing is often considered a costly affair due to a lack of key raw material availability in India. What are your thoughts?

Synthetic anodes can be made from the petroleum stream via needle coke also, but there is no one producing needle coke in India. Most petroleum-based needle coke is produced in the US, Japan, Korea and China. Coal tar that Epsilon Carbon sources from Indian steel plants is a byproduct of the coke oven and a waste for the steel plant. We are able to take a waste of an industry and create value for another industry, and I think, this is what differentiates us as a global player.

It is important to source raw materials in a sustainable manner since raw material sourcing with a low carbon footprint is very important to grow as a player in this industry. Epsilon Advanced Materials is able to manufacture anode material with very low Sulfur Oxides (SOx) and Nitrogen Oxides (NOx) emissions as our feedstock have a very low sulfur content. These are key features in making a project scalable and successful in the future. Today, most of the natural graphite is mined in Africa. India is a leading producer in aluminum and copper which are also key raw materials in LIB cells. India is not reliant on lithium and nickel, but I think a large-scale efficient LIB recycling facility in India can be a solution to source these raw materials domestically till demand increases.

With renewable energy growing in India, I think a key component needed to manufacture cells competitively are becoming available in India. We are studying how to manufacture some of these products and complement our anode manufacturing capability. Currently, China imports raw materials from different continents and does all the chemical processing/refining in China and is able to localize their raw material supply chain. This is what India needs to do since we have abundant raw material.

Epsilon strongly believes that developing raw material supply chain is the most critical factor towards success of cell manufacturing in India, and making India self-reliant in the LIB ecosystem.

As the uptake of EVs accelerates in the country, what kind technological advancements will prove to be essential for the industry?

I think the industry has started maturing in the past two years with some good government initiatives and policies. Going ahead, I think the government is serious about supporting the growth of the LIB cell manufacturing and EV sector. India is a unique market and cannot be directly compared to China or Europe where EV adoption is happening much faster. It is important to understand the cell chemistry that would be best suited for the Indian

Meso coke Powder from Epsilion advance materials. Source: Epsilon Carbon

What are the challenges and opportunities that exists in the Indian market for raw materials of Li-ion battery cells?

India has the world’s second largest reserves of national graphite but mining licenses are not easily available from the government.

Anode making. Source: Epsilon

application. E-2W and e-3W require different cell chemistry as compared with a e-4W or a luxury car. At the same time, there are a lot of technological advancements happening in cell chemistry and especially cathode chemistry, but this will take some time to reach a commercial scale and become available.

What are your views on energy storage and e-mobility?

E-mobility and energy storage are no longer the future but the present. Oil companies and ICE manufacturers are aware that the transition has started and are taking steps to enter this high-growth space. India has ambitious plans but the government needs to support research and development and key raw material supply. With such a large domestic captive market, India has the potential to reduce its environmental footprint on emissions and become a world leader in energy storage and e-mobility.

The Cabinet recently approved Performance Linked Incentives for advanced cell chemistry (ACC) batteries. How will this be a game changer and what role will Epsilon play?

I think the NITI Aayog has been very proactive with the announcement of PLI policy for ACC batteries. Supporting the development of the Indian ecosystem will give a boost to this industry, which was not moving ahead in the past few years. I think in the last year, we have seen a lot of developments and traction in the EV/ battery space in India.

As Epsilon, our focus remains to cater to the Indian market, and we are in talks with several organizations that are looking to take advantage of the PLI scheme and setup giga factories in India. In the 60 percent value addition that needs to be done in India, we think we can contribute 10-15 percent value addition to the cell manufacturer, which can translate to `3000+ crore worth of subsidy over the 10-year scheme. We have chalked out a plan to manufacture 50,000 of anode material in India which would translate to 50 GWh of cell capacity which the NITI Aayog says is a conservative estimate for 2025.

What are the challenges and solution to localization, components availability?

There are a few challenges to localization, which I think will get addressed eventually once the policy starts getting implemented. The policy talks about incentives towards value addition in cell manufacturing but does not talk about incentives for the raw material industry. I feel the government should have given incentives to develop the raw material supply in India, too, and this would have led to a boost in cell manufacturing in India. I think India can be self-reliant on copper, aluminum, graphite, and some other key raw materials for the LIB supply chain. Europe and the US recognize the importance of raw material security and localization to develop the ACC industry and have made guidelines (that they are key raw materials for the country), and therefore, have brought a lot of focus and investment into raw materials. The European Battery Alliance is an example of such a platform.

As a raw material supplier to cell manufacturing, what do you envisage for 2021 and what are your short-term and long-term plan?

We are in the process of qualifying with anode manufacturers and cell manufactures and hope to get approvals by Q1 2021. Today, the biggest customer is China due to the growing appetite for graphite anode materials. We are focused on supporting the growing gigafactories in Europe in the next 2-3 years. We can produce these materials with a significant lower carbon footprint than Chinese manufacturers and that is an important USP for the European market. I think India will start seeing gigafactories on the ground from 2023 and we will be well positioned and have a first mover advantage to supply them and be qualified in our chemistry. Our long-term plan remains to produce 100,000 tons per year of synthetic anode material and support the Indian cell manufacturing facilities.

What are some key takeaways from 2020 and your views on 2021?

The year 2020 has definitely been a challenging year, but it has been a great year of learnings. Lot of industries have seen rapid acceleration and that applies to the EV industry in India. The world has become more conscious about the environment and sustainability and this will continue. We look forward to 2021 to see the development of the cell manufacturing industry in India. We are also looking forward to growing our capacity by six-fold the next year.

Ashok Thakur Chief Editor ETN