By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking 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 provisional anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 companies consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export organization that deserved $2.3 billion in 2015.

Some bigger manufacturers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel hub, as they seek to balance out already falling biodiesel exports to the EU, biofuel executives stated.

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

June shipments shrank to just over 50,000 heaps, the least expensive considering 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 top importer in 2023, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

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

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

However, the boom was short-term. The EU started in August in 2015 examining Indonesian biodiesel that was thought of circumventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced artificially low and damaging regional manufacturers.

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

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

Prices of hydrotreated veggie oil, or HVO, a main kind of biodiesel, have actually halved versus last year's average to the current $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan included.

With low costs, biodiesel plants have cut their operations to a lowest level of under 20% of existing capability usually 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 improving China's UCO exports, which analysts forecast are set to touch a brand-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 destinations.

OUTLETS

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

Among the manufacturers, Longyan Zhuoyue, concurred in January with COSCO Shipping to use more biodiesel in marine fuel.

Companies would also accelerate planning and structure of sustainable aviation fuel (SAF) plants, executives stated. China is anticipated to announce an SAF required before the end of 2024.

They have likewise been searching for brand-new biodiesel clients 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)