By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their most significant buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

The EU will enforce provisionary anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 business consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export company that deserved $2.3 billion in 2015.

Some bigger producers are considering the marine fuel market in China and Singapore, the world's leading marine fuel center, as they seek to offset currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen sharply since mid-2023 in the middle of examinations. Volumes in the first 6 months of this year plunged 51% from a year previously to 567,440 loads, Chinese custom-mades information revealed.

June shipments diminished to just over 50,000 tons, the most affordable because 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, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese manufacturers of biodiesel have taken pleasure in fat earnings recently, making the many of the EU's green energy policy that gives aids 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 utilizing ratings of workers processing waste oil collected 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 began in August in 2015 investigating Indonesian biodiesel that was suspected of preventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and damaging local producers.

Anticipating the tariffs, traders stockpiled on used cooking oil (UCO), raising costs of the feedstock, while rates 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 difficult time enduring," stated Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a primary type of biodiesel, have actually cut in half versus in 2015's average to the present $1,200 to $1,300 per metric load and are off a peak of $3,000 in 2022, Shan included.

With low costs, biodiesel plants have cut their operations to an all-time low of under 20% of existing capacity 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 improving China's UCO exports, which analysts 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 heaps, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While numerous smaller plants are likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in your home and in the crucial hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would also speed up 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 also been scouting for new biodiesel clients 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; Editing by Ana Nicolaci da Costa)