A smouldering pot is a quest item used in the Ratcatchers quest. It is created by using a tinderbox on a pot of weeds. The player can then use it to help Smokin' Joe clear out rats from their holes.
Smokin' Joe offers his own pot for the player to use. But due to the green phlegm that Joe has coughed up into the pot, the player refuses and decides to make his own smouldering pot for use.
After helping Smokin' Joe, the smouldering pot becomes useless and may be destroyed by the player.