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 biggest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

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

Some bigger manufacturers are eyeing the marine fuel market in China and Singapore, the world's leading 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 sharply because mid-2023 amidst investigations. Volumes in the very first six months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customs data revealed.

June deliveries shrank to simply over 50,000 loads, the least expensive considering 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, taking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customs figures revealed.

Chinese producers of biodiesel have enjoyed fat earnings over the last few years, maximizing the EU's green energy policy that gives aids to business that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

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

However, the boom was temporary. The EU began in August last year investigating Indonesian biodiesel that was believed of preventing tasks 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 equipped up on utilized cooking oil (UCO), lifting costs of the feedstock, while prices of biodiesel sank in view of shrinking need for the Chinese supply.

"With hefty rates of UCO partly supported by strong U.S. and European need, and free-falling item costs, business are having a difficult time making it through," stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated vegetable oil, or HVO, a primary type of biodiesel, have halved versus in 2015's average to the current $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 capacity on average 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 new high this year. UCO exports soared by two-thirds year-on-year in the very first half of 2024 to 1.41 million heaps, 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 brand-new outlets including the marine fuel market at home and in the important hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would likewise speed up preparation and structure of sustainable air travel fuel (SAF) plants, executives said. China is expected to reveal an SAF mandate before completion 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 officials added.

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