By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking 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 impose provisionary anti-dumping tasks of between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business consisting of leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export business that was worth $2.3 billion last year.

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

Exports to the bloc have actually fallen sharply since mid-2023 in the middle of investigations. Volumes in the very first 6 months of this year plunged 51% from a year previously to 567,440 tons, Chinese customizeds information showed.

June shipments shrank to simply over 50,000 tons, the most affordable considering 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, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures revealed.

Chinese producers of biodiesel have enjoyed fat profits in current years, making the most of the EU's green energy policy that approves aids to companies that are utilizing biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

However, the boom was short-lived. The EU started in August last year examining Indonesian biodiesel that was suspected of preventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced synthetically low and damaging local producers.

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

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

Prices of hydrotreated veggie oil, 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 lot and are off a peak of $3,000 in 2022, Shan added.

With low costs, biodiesel plants have actually cut their operations to an all-time low of under 20% of existing capacity 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 improving China's UCO exports, which experts 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 heaps, with the United States, Singapore and the Netherlands the leading destinations.

OUTLETS

While lots of smaller plants are most likely to shutter production indefinitely, bigger manufacturers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market in your home and in the essential hub of Singapore, which is utilizing 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 likewise speed up planning and building of sustainable air travel fuel (SAF) plants, executives stated. China is expected to announce an SAF required before the end of 2024.

They have also been searching for new biodiesel clients 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)