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

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

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

Exports to the bloc have fallen dramatically considering that mid-2023 amid examinations. Volumes in the very first 6 months of this year plunged 51% from a year previously to 567,440 loads, Chinese customs information revealed.

June shipments diminished to just over 50,000 lots, the lowest because mid-2019, according to customizeds data.

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 leading importer in 2023, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures revealed.

Chinese producers of biodiesel have actually delighted in fat earnings over the last few years, making the most of the EU's green energy policy that grants subsidies to business 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 collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather products.

However, the boom was brief. The EU started in August last year investigating Indonesian biodiesel that was believed of circumventing 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 damaging local producers.

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

Prices of hydrotreated veggie oil, or HVO, a main kind of biodiesel, have actually cut in half versus in 2015's average to the present $1,200 to $1,300 per metric lot 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 capability on average in July, below a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

Meanwhile, shrinking biodiesel sales are improving China's UCO exports, which experts predict are set to touch a brand-new high this year. UCO exports soared by two-thirds year-on-year in the first half of 2024 to 1.41 million tons, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While numerous smaller plants are most likely to shutter production indefinitely, larger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out new outlets including the marine fuel market in the house and in the essential hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would also accelerate planning and building of sustainable air travel fuel (SAF) plants, executives said. China is expected to announce an SAF mandate before completion of 2024.

They have likewise been scouting for brand-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 authorities included.

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