By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their greatest buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts stated.

The EU will enforce provisional anti-dumping responsibilities of in between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 companies consisting of leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export organization that was worth $2.3 billion in 2015.

Some bigger manufacturers are eyeing the marine fuel market in China and Singapore, the world's leading marine fuel center, as they seek to balance out currently falling biodiesel exports to the EU, biofuel executives stated.

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

June deliveries shrank to just over 50,000 lots, the lowest considering that mid-2019, according to customs information.

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

Chinese producers of biodiesel have actually delighted in fat revenues recently, maximizing the EU's green energy policy that grants subsidies to companies that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

However, the boom was temporary. The EU began in August last year investigating Indonesian biodiesel that was presumed 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 rates of the feedstock, while costs of biodiesel sank in view of diminishing demand for the Chinese supply.

"With substantial costs of UCO partially supported by strong U.S. and European need, and free-falling product prices, companies are having a difficult time enduring," said Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a main type of biodiesel, have cut in half versus last year's average to the present $1,200 to $1,300 per metric lot 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, down from a peak of 50% last seen in early 2023, according to Chinese consultancies Sublime China Information and JLC.

Meanwhile, diminishing biodiesel sales are enhancing China's UCO exports, which analysts anticipate 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 tons, with the United States, Singapore and the Netherlands the top destinations.

OUTLETS

While numerous 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 the house 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, agreed in January with COSCO Shipping to utilize more biodiesel in marine fuel.

Companies would also accelerate planning and structure of sustainable air travel fuel (SAF) plants, executives said. China is anticipated to reveal an SAF required before the end of 2024.

They have also been scouting 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 added.

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