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 buyer, dries up ahead of anti-dumping tariffs, biofuel executives and experts said.

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

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

Exports to the bloc have fallen dramatically given that mid-2023 amid examinations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customizeds information showed.

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

At their peak, exports to the EU 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 deliveries to the EU, followed by Belgium and Spain, Chinese customs figures showed.

Chinese manufacturers of biodiesel have enjoyed fat earnings in the last few years, making the most of the EU’s green energy policy that grants aids to business that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

A lot of China’s biodiesel manufacturers are privately-run small plants utilizing scores of workers processing waste oil collected from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.

However, the boom was brief. 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 thought to be priced artificially low and undercutting local manufacturers.

Anticipating the tariffs, traders stockpiled on used cooking oil (UCO), raising rates of the feedstock, while costs of biodiesel sank in view of shrinking demand for the Chinese supply.

“With hefty prices of UCO partly supported by strong U.S. and European demand, and free-falling item costs, companies are having a hard time enduring,” said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a main kind of biodiesel, have actually cut in half versus in 2015’s average to the existing $1,200 to $1,300 per metric heap 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 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 boosting 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 loads, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While numerous smaller plants are most likely to shutter production indefinitely, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets consisting of the marine fuel market at home and in the important center of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would likewise speed up preparation and building of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to announce an SAF mandate before the end of 2024.

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

(Reporting by Chen Aizhu