By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are looking for brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their most significant buyer, 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, striking over 40 companies including leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export business that deserved $2.3 billion last year.

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

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

June deliveries diminished to simply over 50,000 heaps, the most affordable because 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, 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 actually taken pleasure in fat earnings in the last few years, taking advantage of the EU's green energy policy that gives subsidies to companies that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

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

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

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

"With hefty costs of UCO partly supported by strong U.S. and European need, and free-falling item costs, companies are having a bumpy ride enduring," said Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated veggie oil, or HVO, a main type of biodiesel, have halved versus last year's average to the existing $1,200 to $1,300 per metric ton and are off a peak of $3,000 in 2022, Shan included.

With low costs, biodiesel plants have actually cut their operations to an all-time low of under 20% of existing capability 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, diminishing biodiesel sales are increasing China's UCO exports, which experts predict are set to touch a brand-new high this year. UCO exports soared by two-thirds year-on-year in the 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 sized plants are most likely to shutter production forever, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out brand-new outlets including the marine fuel market at home and in the crucial center of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would likewise speed up planning and building of sustainable air travel fuel (SAF) plants, executives said. China is expected to reveal an SAF mandate before completion of 2024.

They have likewise been searching for brand-new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Asia where there are regional requireds for the alternative fuel, the authorities added.

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