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 greatest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

The EU will impose provisional anti-dumping duties of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 business consisting of leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export service that deserved $2.3 billion last year.

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

Exports to the bloc have fallen dramatically since mid-2023 amidst investigations. Volumes in the first six months of this year plunged 51% from a year earlier to 567,440 lots, Chinese custom-mades information showed.

June shipments diminished to just over 50,000 loads, the lowest since mid-2019, according to custom-mades 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 leading importer in 2023, soaking in 84% of China's biodiesel to the EU, followed by Belgium and Spain, Chinese customizeds figures showed.

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

Many of China's biodiesel producers are privately-run small plants utilizing scores of employees processing waste oil gathered from countless Chinese restaurants. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather items.

However, the boom was brief. The EU began in August in 2015 examining Indonesian biodiesel that was thought of circumventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and damaging local producers.

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

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

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

With low rates, biodiesel plants have actually cut their operations to a lowest level 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, shrinking biodiesel sales are boosting China's UCO exports, which experts predict are set to touch a 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 leading destinations.

OUTLETS

While numerous 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 important hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would also accelerate preparation and structure of sustainable air travel fuel (SAF) plants, executives said. China is anticipated to announce an SAF mandate before completion of 2024.

They have likewise been scouting for brand-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 officials added.

(Reporting by Chen Aizhu