By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers 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 said.

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

Some larger producers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel center, as they look for to offset already falling biodiesel exports to the EU, biofuel executives stated.

Exports to the bloc have actually fallen dramatically since mid-2023 amid investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customs data showed.

June shipments diminished to simply over 50,000 heaps, the most affordable given 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 exports that year. The Netherlands was the leading importer in 2023, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures showed.

Chinese manufacturers of biodiesel have actually taken pleasure in fat earnings recently, making the most of the EU's green energy policy that approves subsidies to companies that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

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

However, the boom was brief. The EU started in August in 2015 examining Indonesian biodiesel that was presumed 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 damaging regional manufacturers.

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

"With hefty prices of UCO partly supported by strong U.S. and European need, and free-falling item prices, companies are having a difficult time enduring,” stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a main kind of biodiesel, have actually cut in half versus last year's average to the existing $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 actually cut their operations to a lowest level of under 20% of existing capacity usually in July, down from a peak of 50% last seen in early 2023, according to Chinese consultancies China Information and JLC.

Meanwhile, diminishing biodiesel sales are boosting China's UCO exports, which analysts predict are set to touch a brand-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 leading destinations.

OUTLETS

While lots of smaller sized plants are most likely to shutter production forever, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets including the marine fuel market in the house and in the essential hub of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would likewise speed up planning and building of sustainable air travel fuel (SAF) plants, executives said. China is anticipated to reveal an SAF required before the end of 2024.

They have likewise been scouting for new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional requireds for the alternative fuel, the authorities included.

(Reporting by Chen Aizhu