By Chen Aizhu

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

The EU will enforce provisionary anti-dumping responsibilities of in between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 business consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export business that was worth $2.3 billion in 2015.

Some larger producers are eyeing 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 actually fallen dramatically considering that mid-2023 amidst investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 lots, Chinese customizeds information showed.

June shipments shrank to just 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 tons in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the leading importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese manufacturers of biodiesel have actually enjoyed fat profits recently, making the most of the EU's green energy policy that grants subsidies to companies that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

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

However, the boom was brief. The EU began in August last year examining Indonesian biodiesel that was suspected of circumventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and undercutting regional manufacturers.

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

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

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

With low rates, biodiesel plants have cut their operations to a lowest level of under 20% of existing capacity usually 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 increasing China's UCO exports, which experts anticipate are set to touch a brand-new high this year. UCO exports soared 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 most likely to shutter production indefinitely, bigger producers 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 important hub of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would also speed up planning and structure of sustainable air travel fuel (SAF) plants, executives stated. China is expected to reveal an SAF required before the end of 2024.

They have actually likewise been searching for new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local mandates for the alternative fuel, the officials added.

(Reporting by Chen Aizhu; Editing by Ana Nicolaci da Costa)