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 duties of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 business including 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 considering the marine fuel market in China and Singapore, the world's leading marine fuel hub, as they look for to balance out currently falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have fallen sharply since mid-2023 amidst investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 loads, Chinese custom-mades data revealed.

June deliveries shrank to just over 50,000 heaps, the lowest given that mid-2019, according to customizeds 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, taking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese custom-mades figures revealed.

Chinese manufacturers of biodiesel have actually enjoyed fat profits in recent years, maximizing the EU's green energy policy that grants aids to business that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

A number of China's biodiesel producers are privately-run small plants using scores of workers processing waste oil collected from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value items like soaps and processing leather items.

However, the boom was brief. The EU began in August last year examining Indonesian biodiesel that was thought of preventing duties 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 used cooking oil (UCO), raising costs of the feedstock, while prices of biodiesel sank in view of shrinking demand for the Chinese supply.

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

Prices of hydrotreated grease, or HVO, a primary type of biodiesel, have cut in half versus last year's average to the current $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 actually cut their operations to a lowest level of under 20% of existing capacity 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 increasing China's UCO exports, which analysts anticipate 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 top destinations.

OUTLETS

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

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

Companies would likewise accelerate preparation and building of sustainable aviation fuel (SAF) plants, executives stated. China is anticipated to announce an SAF required before the end of 2024.

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

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