By Chen Aizhu

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

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

Some bigger producers are considering the marine fuel market in China and Singapore, the world's leading marine fuel hub, as they look for to offset currently falling biodiesel exports to the EU, biofuel executives stated.

Exports to the bloc have actually fallen greatly because mid-2023 amid investigations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 loads, Chinese customizeds data showed.

June shipments diminished to just over 50,000 lots, the lowest since mid-2019, according to customs data.

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

Chinese producers of biodiesel have actually delighted in fat earnings over the last few years, making the most of the EU's green energy policy that grants aids to business that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

A lot of China's biodiesel manufacturers are privately-run little plants utilizing ratings of employees processing waste oil collected from countless Chinese restaurants. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather items.

However, the boom was short-lived. The EU began in August last year examining Indonesian biodiesel that was believed of preventing 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 damaging local manufacturers.

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

"With significant rates of UCO partly supported by strong U.S. and European need, and free-falling product prices, business are having a bumpy ride enduring," stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a primary type of biodiesel, have actually halved versus last year's to the current $1,200 to $1,300 per metric ton and are off a peak of $3,000 in 2022, Shan included.

With low costs, biodiesel plants have cut their operations to an all-time low of under 20% of existing capability usually in July, down from a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

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

OUTLETS

While numerous smaller plants are most likely to shutter production indefinitely, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in the house and in the important center of Singapore, which is utilizing more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would also speed up preparation and structure of sustainable aviation fuel (SAF) plants, executives said. China is anticipated to announce an SAF required before completion of 2024.

They have actually also been hunting for new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local mandates for the alternative fuel, the authorities added.

(Reporting by Chen Aizhu