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1 China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite

By Chen Aizhu

SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are looking for 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 experts said.

The EU will impose provisional anti-dumping tasks of between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business including leading producers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export organization that deserved $2.3 billion in 2015.

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

Exports to the bloc have actually fallen sharply considering that mid-2023 amidst examinations. Volumes in the very first 6 months of this year plunged 51% from a year previously to 567,440 tons, Chinese custom-mades information revealed.

June deliveries diminished to simply over 50,000 heaps, the most affordable considering that mid-2019, according to customs 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 showed.

Chinese manufacturers of biodiesel have actually delighted in fat revenues in the last few years, maximizing the energy policy that approves aids 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 little plants employing ratings of employees processing waste oil collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value items like soaps and processing leather products.

However, the boom was short-term. The EU began in August in 2015 investigating Indonesian biodiesel that was presumed of circumventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and undercutting regional manufacturers.

Anticipating the tariffs, traders stocked up on utilized 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 partially supported by strong U.S. and European need, and free-falling item costs, business are having a bumpy ride surviving," said Gary Shan, chief marketing officer of Henan Junheng.

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

With low costs, biodiesel plants have cut their operations to a lowest level of under 20% of existing capacity usually 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 improving China's UCO exports, which analysts forecast 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 locations.

OUTLETS

While many smaller 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 important hub of Singapore, which is utilizing more biodiesel for ship fuel mixing, 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 aviation fuel (SAF) plants, executives stated. China is anticipated to announce an SAF required before completion of 2024.

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

(Reporting by Chen Aizhu