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 greatest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and experts stated.

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

Some bigger producers are considering the marine fuel market in China and Singapore, the world's top marine fuel center, as they look for to balance out currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have actually fallen sharply considering that mid-2023 in the middle of investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customizeds information revealed.

June deliveries shrank to simply over 50,000 loads, the lowest given that mid-2019, according to customs information.

At their peak, exports to the EU reached a record 1.8 million lots 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 customs figures revealed.

Chinese producers of biodiesel have taken pleasure in fat profits over the last few years, maximizing the EU's green energy policy that gives aids to business 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 employing scores of workers processing waste oil collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather items.

However, the boom was temporary. The EU began in August last year investigating Indonesian biodiesel that was believed 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 prices of the feedstock, while rates of biodiesel sank in view of diminishing need for the Chinese supply.

"With hefty rates of UCO partly supported by strong U.S. and European demand, and free-falling product costs, companies are having a difficult time enduring," stated Gary Shan, chief 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 existing $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan added.

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

OUTLETS

While numerous smaller sized plants are most likely to shutter production indefinitely, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market at home and in the important hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would also accelerate planning and building of sustainable air travel fuel (SAF) plants, executives said. China is expected to reveal an SAF mandate before the end of 2024.

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

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