By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers 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 enforce provisional anti-dumping duties of 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 company 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 currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen dramatically since mid-2023 amid investigations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 lots, Chinese customizeds information revealed.

June shipments shrank 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 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 deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese manufacturers of biodiesel have delighted in fat profits recently, maximizing the EU's green energy policy that approves aids to business that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

Much of China's biodiesel manufacturers are privately-run little plants employing scores of workers processing waste oil gathered from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather items.

However, the boom was short-term. The EU started in August last year examining 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 local producers.

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

"With hefty costs of UCO partially supported by strong U.S. and European demand, and free-falling item prices, companies are having a bumpy ride surviving," said Gary Shan, primary marketing officer of Henan Junheng.

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

With low costs, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability typically in July, down from a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

Meanwhile, diminishing 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 lots, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While many smaller plants are most likely to shutter production forever, larger manufacturers 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 essential hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

Among the producers, Longyan Zhuoyue, concurred 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 expected to reveal an SAF required before completion of 2024.

They have actually also been searching for 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 authorities added.

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