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 analysts stated.

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

Some larger manufacturers are eyeing the marine fuel market in China and Singapore, the marine fuel center, as they seek to offset already falling biodiesel exports to the EU, biofuel executives stated.

Exports to the bloc have fallen dramatically because mid-2023 in the middle of examinations. Volumes in the very first six months of this year plunged 51% from a year earlier to 567,440 tons, Chinese custom-mades data showed.

June deliveries shrank to just over 50,000 lots, the most affordable since mid-2019, according to customizeds 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, soaking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese producers of biodiesel have actually taken pleasure in fat earnings over the last few years, making the many of the EU's green energy policy that gives subsidies to companies that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

Much of China's biodiesel manufacturers are privately-run small plants employing ratings of workers processing waste oil collected 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 suspected of circumventing 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 damaging regional producers.

Anticipating the tariffs, traders stocked up on utilized cooking oil (UCO), raising rates of the feedstock, while prices of biodiesel sank in view of shrinking need for the Chinese supply.

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

Prices of hydrotreated veggie oil, or HVO, a primary type of biodiesel, have actually halved versus last year's average to the current $1,200 to $1,300 per metric load and are off a peak of $3,000 in 2022, Shan added.

With low rates, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability on average 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 experts anticipate 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 top destinations.

OUTLETS

While lots of smaller plants are most likely to shutter production indefinitely, larger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets including the marine fuel market in your home and in the important hub 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 likewise accelerate 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 actually also been hunting for brand-new biodiesel clients 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; Editing by Ana Nicolaci da Costa)