By Chen Aizhu
SINGAPORE, Aug 16 (Reuters) - Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their most significant purchaser, dries up ahead of anti-dumping tariffs, biofuel executives and analysts stated.
The EU will enforce provisional anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, hitting over 40 companies consisting of 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 considering the marine fuel market in China and Singapore, the world's top marine fuel hub, as they seek to offset currently falling biodiesel exports to the EU, biofuel executives said.
Exports to the bloc have actually fallen sharply given that mid-2023 in the middle of investigations. Volumes in the very first six months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customs data showed.
June deliveries diminished to simply over 50,000 heaps, the least expensive given that mid-2019, according to customs 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 leading importer in 2023, taking in 84% of China's biodiesel shipments to the EU, followed by Belgium and Spain, Chinese custom-mades figures showed.
Chinese producers of biodiesel have actually delighted in fat revenues recently, maximizing the EU's green energy policy that grants subsidies to business that are using biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.
A number of China's biodiesel producers are privately-run little plants utilizing scores of employees processing waste oil collected from countless Chinese dining establishments. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather items.
However, the boom was brief. The EU started in August in 2015 investigating Indonesian biodiesel that was believed of preventing tasks 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), raising costs of the feedstock, while costs of biodiesel sank in view of diminishing demand for the Chinese supply.
"With substantial prices of UCO partly supported by strong U.S. and European demand, and free-falling product costs, business are having a difficult time enduring," said Gary Shan, primary marketing officer of Henan Junheng.
Prices of hydrotreated vegetable oil, or HVO, a main type of biodiesel, have halved versus in 2015's average to the existing $1,200 to $1,300 per metric lot and are off a peak of $3,000 in 2022, Shan included.
With low prices, biodiesel plants have actually cut their operations to an all-time low of under 20% of existing capacity usually 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 improving China's UCO exports, which experts anticipate are set to touch a brand-new high this year. UCO exports skyrocketed by two-thirds year-on-year in the first half of 2024 to 1.41 million tons, with the United States, and the Netherlands the leading destinations.
OUTLETS
While many smaller sized plants are most likely to shutter production indefinitely, larger manufacturers 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 crucial hub of Singapore, which is utilizing more biodiesel for ship fuel mixing, according to the biofuel executives.
One of the manufacturers, Longyan Zhuoyue, agreed in January with COSCO Shipping to use more biodiesel in marine fuel.
Companies would likewise accelerate planning and structure of sustainable air travel fuel (SAF) plants, executives stated. China is anticipated to announce an SAF required before the end of 2024.
They have also been searching for brand-new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are local mandates for the alternative fuel, the authorities added.
(Reporting by Chen Aizhu
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China's Biodiesel Producers Seek new Outlets As Hefty EU Tariffs Bite
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