By Chen Aizhu
SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel manufacturers are seeking 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 analysts said.
The EU will enforce provisionary anti-dumping duties of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 companies consisting of leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export business that deserved $2.3 billion last year.
Some larger manufacturers are eyeing the marine fuel market in China and Singapore, the world's top marine fuel center, as they seek to offset currently falling biodiesel exports to the EU, biofuel executives said.
Exports to the bloc have fallen greatly considering that mid-2023 in the middle of examinations. Volumes in the first 6 months of this year plunged 51% from a year previously to 567,440 tons, Chinese custom-mades data revealed.
June deliveries diminished to just over 50,000 lots, the lowest given that mid-2019, according to custom-mades information.
At their peak, exports to the EU reached a record 1.8 million heaps in 2023, representing 90% of all Chinese biodiesel exports that year. The Netherlands was the top importer in 2023, soaking in 84% of China's biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures showed.
of biodiesel have delighted in fat earnings in the last few years, making the many of the EU's green energy policy that approves subsidies 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 small plants utilizing scores of workers processing waste oil gathered from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value products like soaps and processing leather items.
However, the boom was short-lived. 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 believed to be priced synthetically low and undercutting regional manufacturers.
Anticipating the tariffs, traders stocked up on utilized cooking oil (UCO), raising prices of the feedstock, while prices of biodiesel sank in view of shrinking demand for the Chinese supply.
"With significant costs of UCO partly supported by strong U.S. and European demand, and free-falling product prices, business are having a difficult time surviving," stated Gary Shan, primary marketing officer of Henan Junheng.
Prices of hydrotreated vegetable oil, or HVO, a main kind of biodiesel, have actually cut in half versus last year's average to the existing $1,200 to $1,300 per metric load and are off a peak of $3,000 in 2022, Shan included.
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 Chinese consultancies Sublime China Information and JLC.
Meanwhile, shrinking biodiesel sales are enhancing China's UCO exports, which analysts anticipate are set to touch a brand-new high this year. UCO exports skyrocketed by two-thirds year-on-year in the very first half of 2024 to 1.41 million loads, with the United States, Singapore and the Netherlands the leading locations.
OUTLETS
While lots of smaller plants are likely to shutter production forever, bigger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are exploring brand-new outlets consisting of the marine fuel market in your home and in the crucial hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.
One of the producers, Longyan Zhuoyue, agreed 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 said. China is expected to announce an SAF mandate before completion 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 regional mandates for the alternative fuel, the officials added.
(Reporting by Chen Aizhu
1
China's Biodiesel Producers Seek Brand new Outlets As Hefty EU Tariffs Bite
Chloe Rosen edited this page 1 month ago