By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are looking for brand-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 enforce 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 was worth $2.3 billion last year.

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

Exports to the bloc have fallen sharply given that mid-2023 amid investigations. Volumes in the first 6 months of this year plunged 51% from a year previously to 567,440 loads, Chinese custom-mades information revealed.

June deliveries diminished to just over 50,000 loads, the most affordable since mid-2019, according to customs 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, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures revealed.

Chinese manufacturers of biodiesel have actually delighted in fat profits recently, making the most of the EU's green energy policy that grants 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 employees processing waste oil gathered from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value items like soaps and processing leather items.

However, the boom was short-term. The EU began in August in 2015 investigating Indonesian biodiesel that was thought of preventing responsibilities 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 producers.

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

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

Prices of hydrotreated grease, or HVO, a main type of biodiesel, have actually halved versus in 2015'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 rates, 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, shrinking biodiesel sales are improving China's UCO exports, which analysts 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 heaps, with the United States, Singapore and the Netherlands the leading locations.

OUTLETS

While numerous smaller plants are most likely to shutter production forever, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-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 mixing, according to the biofuel executives.

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

Companies would likewise speed up planning and building of sustainable air travel fuel (SAF) plants, executives stated. China is expected to announce an SAF mandate before the end 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 mandates for the alternative fuel, the officials included.

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