By Chen Aizhu

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

The EU will impose provisionary anti-dumping tasks of in between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 companies including leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export company that was worth $2.3 billion last year.

Some larger manufacturers are considering the marine fuel market in China and Singapore, the world's top center, as they seek to offset currently falling biodiesel exports to the EU, biofuel executives stated.

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

June deliveries shrank to simply over 50,000 heaps, the most affordable given that mid-2019, according to customizeds 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 custom-mades figures showed.

Chinese manufacturers of biodiesel have actually enjoyed fat earnings recently, making the many of the EU's green energy policy that approves subsidies to business that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

However, the boom was brief. The EU began in August in 2015 examining Indonesian biodiesel that was suspected of circumventing 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 damaging local producers.

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

"With large prices of UCO partially supported by strong U.S. and European demand, and free-falling product rates, companies are having a hard time enduring," stated Gary Shan, chief marketing officer of Henan Junheng.

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

With low rates, biodiesel plants have actually cut their operations to an all-time low of under 20% of existing capacity usually in July, down from 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 analysts forecast are set to touch a brand-new high this year. UCO exports skyrocketed by two-thirds year-on-year in the first half of 2024 to 1.41 million heaps, with the United States, Singapore and the Netherlands the top locations.

OUTLETS

While lots of smaller sized plants are likely to shutter production forever, larger 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 important hub of Singapore, which is using more biodiesel for ship fuel mixing, 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 also accelerate preparation and structure of sustainable air travel fuel (SAF) plants, executives said. China is expected to announce an SAF mandate before the end of 2024.

They have also been hunting 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 authorities included.

(Reporting by Chen Aizhu