By Chen Aizhu

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

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

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

Exports to the bloc have fallen greatly given that mid-2023 amidst examinations. Volumes in the first six months of this year plunged 51% from a year previously to 567,440 lots, Chinese customs information revealed.

June deliveries diminished to just over 50,000 tons, the most affordable considering that mid-2019, according to custom-mades data.

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 taken pleasure in fat earnings in current years, maximizing 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.

Many of China's biodiesel manufacturers are privately-run small 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 goods like soaps and processing leather products.

However, the boom was short-term. The EU began in August last year investigating Indonesian biodiesel that was presumed of circumventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced synthetically low and undercutting local manufacturers.

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

"With substantial costs of UCO partly supported by strong U.S. and European demand, and free-falling product costs, companies are having a hard time enduring," stated 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 present $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan added.

With low rates, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capacity typically in July, down from 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 predict 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 loads, with the United States, Singapore and the Netherlands the top locations.

OUTLETS

While numerous smaller plants are most likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market at home and in the important hub of Singapore, which is utilizing more biodiesel for ship fuel mixing, according to the biofuel executives.

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

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

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

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