By Chen Aizhu

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

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

Some bigger producers are eyeing the marine fuel market in China and Singapore, the world’s leading marine fuel center, as they seek to offset already falling biodiesel exports to the EU, biofuel executives said.

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

June deliveries diminished to simply over 50,000 loads, the most affordable given that mid-2019, according to custom-mades information.

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 top 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 enjoyed fat revenues recently, maximizing the EU’s green energy policy that grants subsidies to companies that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

A lot 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 items like soaps and processing leather items.

However, the boom was brief. The EU started in August last year investigating Indonesian biodiesel that was believed of circumventing tasks 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 regional producers.

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

“With hefty rates of UCO partly supported by strong U.S. and European demand, and free-falling product costs, companies are having a difficult time making it through,” said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated vegetable oil, or HVO, a main kind of biodiesel, have halved versus in 2015’s average to the present $1,200 to $1,300 per metric load and are off a peak of $3,000 in 2022, Shan added.

With low prices, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability on average 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 increasing China’s UCO exports, which experts forecast 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 top locations.

OUTLETS

While many smaller plants are most likely to shutter production indefinitely, larger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market in the house and in the essential center of Singapore, which is using more biodiesel for ship fuel blending, 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 air travel fuel (SAF) plants, executives stated. China is expected to reveal an SAF required before the end of 2024.

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

(Reporting by Chen Aizhu