By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports and exploring producing other 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 impose provisional anti-dumping duties of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business including leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export service that was worth $2.3 billion last year.

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

Exports to the bloc have actually fallen greatly since mid-2023 amid investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 heaps, Chinese customizeds data revealed.

June shipments shrank to simply over 50,000 tons, the most affordable since mid-2019, according to customizeds information.

At their peak, exports to the EU reached a record 1.8 million tons in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the top importer in 2023, taking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures showed.

Chinese manufacturers of biodiesel have actually delighted in fat revenues recently, taking advantage of the EU's green energy policy that gives subsidies to business that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.

A lot of China's biodiesel manufacturers are privately-run little plants employing ratings of employees 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 products.

However, the boom was brief. The EU began in August in 2015 examining 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 thought to be priced synthetically low and undercutting regional manufacturers.

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

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

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

With low prices, biodiesel plants have cut their operations to a lowest level 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, diminishing biodiesel sales are increasing 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 tons, with the United States, Singapore and the Netherlands the leading locations.

OUTLETS

While lots of smaller plants are likely to shutter production indefinitely, bigger 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 mixing, according to the biofuel executives.

Among the manufacturers, Longyan Zhuoyue, agreed 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 said. China is expected to announce an SAF mandate before completion of 2024.

They have actually likewise been searching for new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local requireds for the alternative fuel, the officials added.

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