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

The EU will impose provisional anti-dumping duties of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 companies including leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export organization that deserved $2.3 billion in 2015.

Some larger manufacturers are considering 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 said.

Exports to the bloc have fallen dramatically since mid-2023 amid examinations. Volumes in the first six months of this year plunged 51% from a year earlier to 567,440 lots, Chinese customs information showed.

June shipments shrank to just over 50,000 tons, the most affordable given that mid-2019, according to customizeds information.

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 shipments to the EU, followed by Belgium and Spain, Chinese customs figures showed.

Chinese manufacturers of biodiesel have actually delighted in fat earnings over the last few years, taking advantage of the EU's green energy policy that approves subsidies to business that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

Much of China's biodiesel manufacturers are privately-run small plants utilizing ratings of workers processing waste oil collected from millions of 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 began in August last year investigating Indonesian biodiesel that was presumed of preventing responsibilities 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 regional producers.

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

"With significant costs of UCO partially supported by strong U.S. and European need, and free-falling item costs, companies are having a difficult time enduring," stated Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a primary type of biodiesel, have actually 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 added.

With low costs, biodiesel plants have cut their operations to a lowest level of under 20% of existing capacity usually in July, down from a peak of 50% last seen in early 2023, according to Sublime China Information and JLC.

Meanwhile, diminishing biodiesel sales are enhancing China's UCO exports, which experts predict 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 tons, with the United States, Singapore and the Netherlands the leading destinations.

OUTLETS

While many smaller plants are likely to shutter production forever, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in your home and in the crucial hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would likewise accelerate planning and building of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to reveal an SAF mandate before completion of 2024.

They have actually likewise been scouting for brand-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 authorities added.

(Reporting by Chen Aizhu