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 most significant buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts stated.

The EU will impose provisional anti-dumping tasks of in 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 company that deserved $2.3 billion last year.

Some bigger manufacturers 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 said.

Exports to the bloc have fallen greatly given that mid-2023 amidst examinations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 heaps, Chinese custom-mades data showed.

June shipments diminished to just over 50,000 loads, the most affordable considering that mid-2019, according to customs information.

At their peak, exports to the EU reached a record 1.8 million lots in 2023, representing 90% of all Chinese biodiesel exports 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 showed.

Chinese producers of biodiesel have enjoyed fat revenues in the last few years, making the most of the EU’s green energy policy that gives subsidies to companies 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 millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather items.

However, the boom was temporary. The EU started in August in 2015 examining Indonesian biodiesel that was presumed of 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 regional producers.

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

"With significant rates of UCO partially supported by strong U.S. and European need, and free-falling product costs, business are having a difficult time surviving,” stated Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a primary type of biodiesel, have halved versus in 2015’s average to the existing $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan included.

With low prices, 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 increasing 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 lots, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While numerous smaller sized plants are most likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market in your home and in the essential hub of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

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

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

(Reporting by Chen Aizhu