By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers 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 purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

The EU will enforce provisional anti-dumping responsibilities of in 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 larger manufacturers are considering the marine fuel market in China and Singapore, the world's leading marine fuel center, as they seek to balance out already falling biodiesel exports to the EU, biofuel executives stated.

Exports to the bloc have fallen greatly given that mid-2023 amidst examinations. Volumes in the very first 6 months of this year plunged 51% from a year previously to 567,440 lots, Chinese customs data showed.

June deliveries diminished to just over 50,000 loads, the lowest considering that mid-2019, according to customs information.

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, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures revealed.

Chinese producers of biodiesel have enjoyed fat profits in recent years, making the most of the EU's green energy policy that grants aids to business that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

However, the boom was short-lived. The EU began in August last year examining Indonesian biodiesel that was thought of circumventing duties by going through China and Britain, followed by a 14 probe into Chinese biodiesel believed to be priced artificially low and damaging regional manufacturers.

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

"With substantial rates of UCO partly supported by strong U.S. and European demand, and free-falling product prices, business are having a difficult time making it through," stated Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a primary kind of biodiesel, have actually cut in half versus in 2015's average to the existing $1,200 to $1,300 per metric ton 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 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 predict are set to touch a new high this year. UCO exports skyrocketed by two-thirds year-on-year in the very 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 likely to shutter production forever, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out 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 mixing, 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 accelerate preparation and structure of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to announce an SAF mandate before completion of 2024.

They have actually also 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