By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are looking for brand-new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their most significant buyer, dries up ahead of anti-dumping tariffs, biofuel executives and experts stated.

The EU will enforce provisionary anti-dumping responsibilities 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 company that was worth $2.3 billion in 2015.

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

Exports to the bloc have actually fallen sharply given that mid-2023 amid examinations. Volumes in the first six months of this year plunged 51% from a year earlier to 567,440 lots, Chinese custom-mades data revealed.

June deliveries shrank to simply over 50,000 loads, the lowest given that mid-2019, according to custom-mades data.

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

Chinese producers of biodiesel have actually enjoyed fat earnings in the last few years, taking advantage of the EU's green energy policy that grants aids 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 small plants using scores of workers processing waste oil collected from countless Chinese restaurants. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.

However, the boom was short-term. The EU began in August last year examining Indonesian biodiesel that was thought 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 manufacturers.

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

"With substantial rates of UCO partly supported by strong U.S. and European need, and free-falling item costs, business are having a tough time making it through," stated Gary Shan, primary marketing officer of Henan Junheng.

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

With low rates, biodiesel plants have cut their operations to a lowest level of under 20% of existing capability typically 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 increasing China's UCO exports, which analysts 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 leading locations.

OUTLETS

While lots of smaller plants are likely to shutter production forever, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out new outlets including the marine fuel market in your home and in the crucial center 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 also 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 also been hunting for brand-new biodiesel clients outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional requireds for the alternative fuel, the authorities added.

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