By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports and checking out 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 provisionary anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 companies including leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export business 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 seek to balance out 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 very first 6 months of this year plunged 51% from a year previously to 567,440 loads, Chinese customs information revealed.

June shipments diminished to simply over 50,000 heaps, the most affordable 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 deliveries to the EU, followed by Belgium and Spain, Chinese custom-mades figures showed.

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

Many of China's biodiesel producers are privately-run little plants employing 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 examining 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 local producers.

Anticipating the tariffs, traders stocked up on used cooking oil (UCO), lifting rates of the feedstock, while prices of biodiesel sank in view of diminishing demand for the Chinese supply.

"With significant costs of UCO partly supported by strong U.S. and European need, and free-falling item costs, business are having a hard time surviving," said Gary Shan, primary marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a primary kind of biodiesel, have cut in half versus last year's average to the current $1,200 to $1,300 per metric load and are off a peak of $3,000 in 2022, Shan included.

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

OUTLETS

While lots of smaller sized plants are likely to shutter indefinitely, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out new outlets including the marine fuel market at home and in the crucial hub of Singapore, which is using more biodiesel for ship fuel mixing, according to the biofuel executives.

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

Companies would likewise speed up planning and structure of sustainable aviation fuel (SAF) plants, executives stated. China is anticipated to reveal an SAF required before the end of 2024.

They have actually also been scouting for brand-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 officials added.

(Reporting by Chen Aizhu