mission-newenergy-limited

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 seeking brand-new outlets in Asia for their exports and checking out producing other biofuels as supply to the European Union, their greatest buyer, dries up ahead of anti-dumping tariffs, biofuel executives and analysts said.

The EU will impose 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 service that deserved $2.3 billion last year.

Some bigger 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.

to the bloc have actually fallen dramatically because mid-2023 in the middle of examinations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese custom-mades information revealed.

June deliveries shrank to simply over 50,000 heaps, the most affordable considering that mid-2019, according to customizeds data.

At their peak, exports to the EU reached a record 1.8 million loads 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 producers of biodiesel have actually enjoyed fat revenues in the last few years, maximizing the EU's green energy policy that grants subsidies to business that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

Much of China's biodiesel producers are privately-run little plants using ratings of employees processing waste oil gathered 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 short-lived. The EU began in August last year examining Indonesian biodiesel that was believed 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 local producers.

Anticipating the tariffs, traders stocked up on utilized cooking oil (UCO), lifting prices of the feedstock, while costs of biodiesel sank in view of shrinking need for the Chinese supply.

"With significant prices of UCO partly supported by strong U.S. and European need, and free-falling item rates, companies are having a hard time surviving," said Gary Shan, chief marketing officer of Henan Junheng.

Prices of hydrotreated grease, or HVO, a main kind of biodiesel, have actually halved versus in 2015's average to the present $1,200 to $1,300 per metric heap and are off a peak of $3,000 in 2022, Shan added.

With low rates, biodiesel plants have actually cut their operations to a lowest level of under 20% of existing capability 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 brand-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 destinations.

OUTLETS

While lots of smaller plants are likely to shutter production indefinitely, larger producers like Zhejiang Jiaao, Leoking Enviro Group and Longyan Zhuoyue are checking out new outlets including the marine fuel market in your home and in the crucial center of Singapore, which is using more biodiesel for ship fuel blending, according to the biofuel executives.

Among the manufacturers, Longyan Zhuoyue, agreed in January with COSCO Shipping to utilize more biodiesel in marine fuel.

Companies would also speed up preparation and building of sustainable aviation fuel (SAF) plants, executives said. China is anticipated to announce an SAF required 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 officials added.

(Reporting by Chen Aizhu