By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their biggest purchaser, 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 deserved $2.3 billion in 2015.

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

Exports to the bloc have fallen greatly considering that mid-2023 in the middle of investigations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 loads, Chinese customs information showed.

June deliveries shrank to just over 50,000 lots, the most affordable because mid-2019, according to custom-mades data.

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

Chinese producers of biodiesel have actually enjoyed fat profits in the last few years, maximizing the EU's green energy policy that gives subsidies to companies that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

A number of China's biodiesel manufacturers are privately-run little plants utilizing scores of workers processing waste oil collected from countless 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 started in August last year investigating Indonesian biodiesel that was thought of preventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced artificially low and undercutting regional producers.

Anticipating the tariffs, traders equipped up on utilized cooking oil (UCO), raising costs of the feedstock, while costs of biodiesel sank in view of shrinking need for the Chinese supply.

"With substantial costs of UCO partly supported by strong U.S. and European need, and free-falling item costs, business are having a difficult time surviving," said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a main type of biodiesel, have cut in half versus last year's average to the existing $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 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 enhancing China's UCO exports, which analysts anticipate 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 most likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets consisting of the marine fuel market in the house and in the important center of Singapore, which is using 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 likewise speed up planning and building of sustainable aviation fuel (SAF) plants, executives stated. China is anticipated to announce an SAF required before the end of 2024.

They have actually also been hunting for brand-new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional mandates for the alternative fuel, the officials added.

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