How Epsilon Carbon is taking first steps towards battery material production in India

Mumbai based Epsilon Carbon recently announced starting production of graphite anode material for Li-ion batteries, a first in the country. We wanted to know more about their plans, and what kind of a set-up and material access is required for production. This write-up is a summary of our findings based on interaction with Epsilon Carbon MD – Vikram Handa.

Update – Feb 24, 2021 – Epsilon announced that they have received an initial order for its Anode precursor material from two top anode makers in Japan and China

About Epsilon Carbon

Epsilon Carbon is a coal tar derivatives company that supplies a range of products to customers across industries including Aluminium, Graphite, Dye Intermediate and Carbon Black Industry.

“We distil the coal tar and recover a variety of valuable carbon fractions. The key derivative of distillation is Coal Tar Pitch, which is further processed and manufactured as Aluminium Grade Pitch, Graphite Grade Pitch”, explains Vikram. Epsilon holds a 40% market share in pitch manufacturing in the country and produces 2,90,000 tonnes annually.

The company has manufacturing units in Karnataka, Chhattisgarh and Orissa, located near raw material sources and/or customers. Epsilon Carbon has built its Integrated Carbon Facility within JSW’s Complex at Vijayanagar, Karnataka.

They are now diversifying into battery material business to manufacture carbon products for the anode component of Lithium-Ion Batteries.

Diversification into anode material production

Production unit for newly floated subsidiary ‘Epsilon Advanced Materials (EAMPL)’ will be located at the integrated carbon facility (in cover picture) where they get direct access to the raw material (coal tar) from JSW steel plant. The unit is established on 5 acres of land with another 45 acres are marked for future expansion.

EAMPL will process the Coal Tar Pitch through patented purpose-designed thermal gradients to produce Bulk Mesophase coke, that is a premium raw material used by anode material manufacturers.

“Our core advantage is having 100% secured raw material. Our value chain for producing the graphic anode materials is backward integrated into our existing coal tar derivatives business that processes raw coal tar. This is one of the major factors that made the proposition attractive for us”, says Vikram.

Epsilon claims the unique position of being the only company globally that has a full backward integration from raw coal tar to the finished product. Vikram believes this enables them to produce stable finished products and supply their customers with high-quality materials in the LiB supply chain at competitive prices as the cell cost reduces every year.

Market Potential

The proposition is indeed attractive, looking at the size of the global battery materials market.

According to market research reports, the battery materials market is projected to grow from USD 43.5 billion in 2018 to USD 65.8 billion by 2023, at a CAGR of 8.62% between 2018 and 2023, due to the rising demand for batteries across various use cases globally. Anode costs about 25% as a Bill of Materials for a Li-ion battery cell, and nearly 84% of its annual global production of 7,54,000 tonnes is controlled by China at present, says Benchmark Mineral Intelligence.

The market potential is huge. “Graphite anode composition and mass in a Lithium-ion battery is consistent and largely agnostic of cathode chemistry. Even at conservative EV penetration levels, Li-ion battery market growth provides a highly attractive outlook for graphite anodes”, feels Vikram.

Scale

In phase 1, starting with an initial capacity of 5,000 TPA, Epsilon wants to start producing 15,000 TPA of Mesophase by Jul 2021 for supply to anode manufactures. In phase 2, it plans to start producing Synthetic Graphite material to directly supply to battery manufacturers.

Talking about the future plans and expansion aspirations, Vikram shared, “We’re also currently conducting research and pilot trials in order to develop a commercial product to augment our current portfolio of anode active materials. e.g. hard carbon and SI-Graphite anode. We are going to invest 500 cr over the next few years to reach Synthetic graphite capacity of and 35,000 tonnes by 2025”.

For e-mobility applications, Lithium-ion battery chemistry is expected to dominate over other battery technologies under research at various levels of technology readiness. Going by the current battery production capacity expansion across Europe, China and the USA, as well as OEMs directly getting involved with securing raw material for LiBs, it seems Li-ion battery chemistry will continue to dominate for at least a decade.  India does not have any Li-ion cell manufacturing units at present but might have production facilities in the future.

We look forward to following Epsilon’s journey!