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 most significant purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

The EU will enforce provisionary anti-dumping duties 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 service that deserved $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 look for to offset already falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have actually fallen dramatically considering that mid-2023 amidst examinations. Volumes in the very first six months of this year plunged 51% from a year previously to 567,440 lots, Chinese customs information revealed.

June shipments shrank to simply over 50,000 heaps, the least expensive since mid-2019, according to customizeds 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 leading importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures showed.

Chinese manufacturers of biodiesel have taken pleasure in fat revenues in current 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.

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

However, the boom was temporary. The EU started in August last year investigating Indonesian biodiesel that was suspected of circumventing tasks by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and undercutting local producers.

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

"With large costs of UCO partially supported by strong U.S. and European need, and free-falling item costs, business are having a bumpy ride making it through," said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a primary type of biodiesel, have cut in half versus last year's average to the current $1,200 to $1,300 per metric ton and are off a peak of $3,000 in 2022, Shan included.

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

Meanwhile, shrinking biodiesel sales are boosting 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 tons, with the United States, Singapore and the Netherlands the leading destinations.

OUTLETS

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

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

Companies would also accelerate preparation and structure of sustainable aviation fuel (SAF) plants, executives stated. China is anticipated to announce an SAF mandate before the end of 2024.

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

(Reporting by Chen Aizhu