By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their biggest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and experts stated.

The EU will enforce provisionary anti-dumping duties of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export company that was worth $2.3 billion last year.

Some larger producers are considering the marine fuel market in China and Singapore, the world's top marine fuel hub, as they seek to offset currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen dramatically given that mid-2023 in the middle of examinations. Volumes in the first six months of this year plunged 51% from a year previously to 567,440 heaps, Chinese customs information revealed.

June deliveries shrank to simply over 50,000 lots, the most affordable given that mid-2019, according to custom-mades information.

At their peak, exports to the EU reached a record 1.8 million lots in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the top importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese producers of biodiesel have taken pleasure in fat profits in the last few years, making the many of the EU's green energy policy that grants subsidies to business that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

Many of China's biodiesel manufacturers are privately-run small plants using ratings of employees processing waste oil gathered from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value items like soaps and processing leather items.

However, the boom was short-term. The EU began in August in 2015 examining Indonesian biodiesel that was thought of circumventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced synthetically low and undercutting local manufacturers.

Anticipating the tariffs, traders stockpiled on utilized cooking oil (UCO), lifting rates of the feedstock, while rates of biodiesel sank in view of diminishing need for the Chinese supply.

"With hefty rates of UCO partially supported by strong U.S. and European demand, and free-falling item costs, companies are having a difficult time surviving," said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated vegetable oil, or HVO, a primary kind of biodiesel, have actually cut in half versus in 2015's average to the present $1,200 to $1,300 per and are off a peak of $3,000 in 2022, Shan added.

With low prices, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capacity typically in July, below a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

Meanwhile, diminishing biodiesel sales are improving China's UCO exports, which experts predict are set to touch a new high this year. UCO exports skyrocketed by two-thirds year-on-year in the very first half of 2024 to 1.41 million loads, with the United States, Singapore and the Netherlands the top locations.

OUTLETS

While numerous smaller sized plants are likely to shutter production forever, larger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets consisting of the marine fuel market in the house and in the crucial center of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

One of the producers, Longyan Zhuoyue, concurred in January with COSCO Shipping to use more biodiesel in marine fuel.

Companies would likewise speed up planning and building of sustainable aviation fuel (SAF) plants, executives said. China is expected to announce an SAF required before completion of 2024.

They have actually likewise been hunting for brand-new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional mandates for the alternative fuel, the authorities added.

(Reporting by Chen Aizhu