By Chen Aizhu


SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking brand-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 analysts said.


The EU will enforce provisionary anti-dumping tasks of 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 deserved $2.3 billion in 2015.


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


Exports to the bloc have actually fallen dramatically because mid-2023 amid investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 lots, Chinese custom-mades information showed.


June deliveries shrank to just over 50,000 tons, the least expensive 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 deliveries to the EU, followed by Belgium and Spain, Chinese customs figures revealed.


Chinese manufacturers of biodiesel have taken pleasure in fat earnings recently, making the many of the EU's green energy policy that grants subsidies to business that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.


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


However, the boom was brief. The EU started in August in 2015 investigating Indonesian biodiesel that was presumed of preventing tasks 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 regional manufacturers.


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


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


Prices of hydrotreated grease, or HVO, a main type of biodiesel, have actually halved versus in 2015's average to the existing $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 actually cut their operations to an all-time low of under 20% of existing capability 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 enhancing 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 tons, with the United States, Singapore and the Netherlands the leading locations.


OUTLETS


While lots of smaller sized plants are likely to shutter production forever, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets consisting of the marine fuel market in the house and in the essential center of Singapore, which is utilizing more biodiesel for ship fuel mixing, 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 likewise speed up planning and building of sustainable aviation fuel (SAF) plants, executives stated. China is expected to announce an SAF mandate before the end of 2024.


They have actually likewise been searching 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 officials included.


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