By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking 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 provisional anti-dumping tasks of in 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 was worth $2.3 billion in 2015.

Some larger manufacturers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel hub, as they seek to balance out currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen greatly given that mid-2023 amid investigations. Volumes in the first six months of this year plunged 51% from a year previously to 567,440 heaps, Chinese custom-mades information showed.

June deliveries shrank to simply over 50,000 lots, the least expensive considering that mid-2019, according to custom-mades 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 leading importer in 2023, soaking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese custom-mades figures showed.

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

A lot of China's biodiesel producers are privately-run little plants utilizing ratings of workers processing waste oil collected from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather products.

However, the boom was short-lived. The EU started in August last year investigating Indonesian biodiesel that was believed of circumventing duties 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 stockpiled on used cooking oil (UCO), raising rates of the feedstock, while rates of biodiesel sank in view of diminishing demand for the Chinese supply.

"With large rates of UCO partly supported by strong U.S. and European demand, and free-falling product costs, business are having a difficult time enduring," said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated vegetable oil, or HVO, a main kind of biodiesel, have actually halved versus in 2015's average to the existing $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan added.

With low prices, biodiesel plants have cut their operations to an all-time low of under 20% of existing capability on average 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 improving China's UCO exports, which experts predict are set to touch a brand-new high this year. UCO exports skyrocketed by two-thirds year-on-year in the first half of 2024 to 1.41 million loads, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While lots of smaller sized 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 including the marine fuel market in your home and in the essential 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 likewise speed up preparation and structure of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to reveal an SAF mandate before the end of 2024.

They have actually also been scouting for new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local requireds for the alternative fuel, the authorities added.

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