By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) biodiesel producers are seeking brand-new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their most significant 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 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 offset currently falling biodiesel exports to the EU, biofuel executives stated.

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

June shipments diminished to simply over 50,000 lots, the most affordable given that mid-2019, according to customs 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 deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

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

Many 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 products like soaps and processing leather items.

However, the boom was temporary. The EU started in August last year examining Indonesian biodiesel that was thought of preventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced artificially low and undercutting regional manufacturers.

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

"With substantial costs of UCO partially supported by strong U.S. and European need, and free-falling item prices, business are having a tough time surviving," stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a main kind of biodiesel, have cut in half versus last year's average to the existing $1,200 to $1,300 per metric ton and are off a peak of $3,000 in 2022, Shan added.

With low costs, biodiesel plants have actually cut their operations to a lowest level 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, shrinking 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 top destinations.

OUTLETS

While lots of smaller sized plants are likely to shutter production indefinitely, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market at home and in the essential hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

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

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

They have also been searching for brand-new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local requireds for the alternative fuel, the authorities included.

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