By Chen Aizhu

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

The EU will enforce provisional anti-dumping duties of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking 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 manufacturers are considering the marine fuel market in China and Singapore, the world's leading marine fuel hub, as they look for to balance out already falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have actually fallen dramatically considering that mid-2023 amidst examinations. Volumes in the very first six months of this year plunged 51% from a year earlier to 567,440 heaps, Chinese custom-mades information showed.

June deliveries diminished to just over 50,000 lots, the most affordable considering that mid-2019, according to customizeds data.

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

Chinese producers of biodiesel have enjoyed fat revenues over the last few years, taking advantage of the EU's green energy policy that approves aids to companies that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

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

However, the boom was short-lived. The EU began in August in 2015 examining Indonesian biodiesel that was suspected of preventing tasks by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and damaging local manufacturers.

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

"With large rates of UCO partially supported by strong U.S. and European demand, and free-falling product prices, business are having a bumpy ride making it through," stated Gary Shan, primary marketing officer of Henan Junheng.

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

With low rates, biodiesel plants have cut their operations to an all-time low of under 20% of existing capability on average 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 increasing China's UCO exports, which analysts 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 lots of smaller sized plants are most likely to shutter production indefinitely, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets including the marine fuel market in your home and in the crucial hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would likewise accelerate preparation and structure of sustainable air travel fuel (SAF) plants, executives said. China is expected to reveal an SAF mandate before completion of 2024.

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

(Reporting by Chen Aizhu