By Chen Aizhu

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

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

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

Exports to the bloc have actually fallen greatly considering that mid-2023 in the middle of examinations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customizeds information revealed.

June shipments shrank to just over 50,000 tons, the least expensive because 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 leading importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures showed.

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

Much of China's biodiesel producers are privately-run small plants using ratings of workers processing waste oil collected from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather products.

However, the boom was temporary. The EU began in August in 2015 investigating Indonesian biodiesel that was presumed of preventing tasks by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and undercutting local manufacturers.

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

"With substantial costs of UCO partly supported by strong U.S. and European need, and free-falling item rates, business are having a difficult time surviving," said Gary Shan, 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 current $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan included.

With low costs, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability typically 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 experts predict are set to touch a 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 destinations.

OUTLETS

While many smaller plants are most likely to shutter production forever, bigger producers 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 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 speed up preparation and building of sustainable aviation fuel (SAF) plants, executives said. China is expected to reveal an SAF required before the end of 2024.

They have likewise been scouting 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)