By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are looking for brand-new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their most significant buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts stated.

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

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

Exports to the bloc have fallen dramatically because mid-2023 in the middle of investigations. Volumes in the first six months of this year plunged 51% from a year previously to 567,440 loads, Chinese custom-mades information revealed.

June shipments diminished to just over 50,000 lots, the most affordable considering that mid-2019, according to custom-mades information.

At their peak, exports to the EU reached a record 1.8 million tons 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 deliveries to the EU, followed by Belgium and Spain, Chinese customs figures showed.

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

Many of China's biodiesel manufacturers are privately-run little plants utilizing scores of workers processing waste oil gathered from millions of Chinese restaurants. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather items.

However, the boom was temporary. The EU began in August in 2015 examining Indonesian biodiesel that was suspected of preventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and damaging regional manufacturers.

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

"With hefty costs of UCO partially supported by strong U.S. and European demand, and free-falling product rates, business are having a bumpy ride 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 actually halved versus last year's average to the present $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan added.

With low costs, biodiesel plants have cut their operations to an all-time low 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, shrinking biodiesel sales are enhancing China's UCO exports, which experts forecast are set to touch a new high this year. UCO exports skyrocketed 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 sized plants are likely to shutter production forever, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out new outlets consisting of the marine fuel market in your home and in the crucial hub of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

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

They have actually likewise been searching for brand-new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local mandates for the alternative fuel, the officials added.

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