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 biggest purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and experts said.
The EU will impose provisionary anti-dumping responsibilities 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 business that deserved $2.3 billion in 2015.
Some bigger producers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel center, as they look for to offset currently falling biodiesel exports to the EU, biofuel executives stated.
Exports to the bloc have fallen dramatically given that mid-2023 amid investigations. Volumes in the very first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customs information revealed.
June shipments shrank to simply over 50,000 lots, the most affordable because mid-2019, according to customs information.
At their peak, exports to the EU reached a record 1.8 million tons in 2023, 90% of all Chinese biodiesel exports that year. The Netherlands was the top importer in 2023, soaking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese customs figures showed.
Chinese producers of biodiesel have actually taken pleasure in fat earnings in recent years, maximizing the EU's green energy policy that grants subsidies to companies 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 using scores of workers processing waste oil collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.
However, the boom was brief. The EU started in August last year investigating Indonesian biodiesel that was presumed of circumventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced synthetically low and undercutting regional manufacturers.
Anticipating the tariffs, traders stockpiled on utilized cooking oil (UCO), lifting rates of the feedstock, while rates of biodiesel sank in view of shrinking need for the Chinese supply.
"With large rates of UCO partly supported by strong U.S. and European need, and free-falling product costs, companies are having a difficult time making it through," stated Gary Shan, primary marketing officer of Henan Junheng.
Prices of hydrotreated grease, or HVO, a main type of biodiesel, have actually halved versus last year's average to the existing $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan included.
With low rates, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capacity on average 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 boosting 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 top locations.
OUTLETS
While lots of smaller sized plants are likely to shutter production indefinitely, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring new outlets including the marine fuel market at home and in the important 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 also accelerate planning and structure of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to reveal an SAF mandate before the end of 2024.
They have also 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
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China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite
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