By Chen Aizhu
SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are looking for brand-new outlets in Asia for their exports and exploring producing other biofuels as supply to the European Union, their greatest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and experts stated.
The EU will impose provisional anti-dumping tasks of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 companies consisting of 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 top marine fuel center, as they look for to offset already falling biodiesel exports to the EU, biofuel executives said.
Exports to the bloc have actually fallen greatly because mid-2023 amidst investigations. Volumes in the first six months of this year plunged 51% from a year previously to 567,440 lots, Chinese custom-mades data showed.
June shipments shrank to simply over 50,000 tons, the most affordable given that mid-2019, according to customs data.
At their peak, exports to the EU reached a record 1.8 million tons 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 delighted in fat revenues over the last few years, taking advantage 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.
Many of China's biodiesel manufacturers are privately-run small plants utilizing scores of employees processing waste oil collected 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 short-term. The EU began in August last year investigating Indonesian biodiesel that was believed of circumventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced synthetically low and damaging regional producers.
Anticipating the tariffs, traders stocked up on utilized cooking oil (UCO), raising rates of the feedstock, while costs of biodiesel sank in view of shrinking need for the Chinese supply.
"With substantial rates of UCO partly supported by strong U.S. and European demand, and free-falling product costs, companies are having a difficult time enduring," stated Gary Shan, chief marketing officer of Henan Junheng.
Prices of hydrotreated grease, or HVO, a main type of biodiesel, have halved versus last year's average to the current $1,200 to $1,300 per metric ton and are off a peak of $3,000 in 2022, Shan added.
With low rates, biodiesel plants have cut their operations to an all-time low of under 20% of existing capacity on average in July, down from a peak of 50% last seen in early 2023, according to Sublime China Information and JLC.
Meanwhile, shrinking biodiesel sales are improving China's UCO exports, which experts anticipate 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 leading locations.
OUTLETS
While lots of smaller plants are most likely to shutter production forever, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in the house and in the crucial center of Singapore, which is utilizing 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 also speed up planning and building of sustainable aviation fuel (SAF) plants, executives said. China is expected to reveal an SAF mandate before completion of 2024.
They have actually likewise been hunting 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
1
China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite
Trent Spears edited this page 7 days ago