By Chen Aizhu

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

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

Some larger manufacturers are considering the marine fuel market in China and Singapore, the world's leading marine fuel center, as they seek to offset already falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have actually fallen sharply because mid-2023 in the middle of examinations. Volumes in the very first six months of this year plunged 51% from a year previously to 567,440 heaps, Chinese custom-mades information revealed.

June shipments diminished to just over 50,000 lots, the least expensive considering that mid-2019, according to customs 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 top importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese manufacturers of biodiesel have taken pleasure in fat earnings in current years, taking advantage of the EU's green energy policy that grants subsidies to business that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

However, the boom was temporary. The EU began in August last year examining Indonesian biodiesel that was suspected of circumventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced artificially low and undercutting regional producers.

Anticipating the tariffs, traders equipped up on used cooking oil (UCO), raising prices of the feedstock, while costs of biodiesel sank in view of diminishing need for the Chinese supply.

"With large rates of UCO partly supported by strong U.S. and European need, and free-falling product costs, business are having a bumpy ride surviving," said Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated vegetable oil, or HVO, a main kind of biodiesel, have cut in half versus last year'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 an all-time low of under 20% of existing capacity typically 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 enhancing China's UCO exports, which experts anticipate 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 loads, with the United States, Singapore and the Netherlands the top locations.

OUTLETS

While numerous smaller sized plants are most likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets consisting of 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, concurred in January with COSCO Shipping to use more biodiesel in marine fuel.

Companies would also accelerate planning and structure of sustainable aviation fuel (SAF) plants, executives stated. China is expected to reveal an SAF required before the end of 2024.

They have actually also been hunting 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 officials added.

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