China’s Biodiesel Producers Seek new Outlets As Hefty EU Tariffs Bite
By Chen Aizhu
SINGAPORE, Aug 16 (Reuters) – Chinese biodiesel producers are seeking new outlets in Asia for their exports and checking out 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 enforce provisionary anti-dumping tasks of in between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business including leading manufacturers Zhejiang Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export service that deserved $2.3 billion in 2015.
Some bigger producers are considering the marine fuel market in China and Singapore, the world’s leading marine fuel center, as they seek to balance out currently falling biodiesel exports to the EU, biofuel executives stated.
Exports to the bloc have fallen greatly because mid-2023 amidst investigations. Volumes in the first 6 months of this year plunged 51% from a year earlier to 567,440 tons, Chinese customs information revealed.
June shipments shrank to just over 50,000 loads, the least expensive 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 top importer in 2023, soaking in 84% of China’s biodiesel deliveries to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.
Chinese manufacturers of biodiesel have taken pleasure in fat profits recently, maximizing the EU’s green energy policy that gives subsidies to business that are utilizing biodiesel as a sustainable transport fuel such as Repsol, Shell and Neste.
Many of China’s biodiesel producers are privately-run little plants employing scores of workers processing waste oil gathered from of Chinese restaurants. Before the biodiesel export boom, they were making lower-value goods like soaps and processing leather products.
However, the boom was brief. The EU began in August in 2015 examining Indonesian biodiesel that was thought of circumventing duties by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel believed to be priced artificially low and damaging local producers.
Anticipating the tariffs, traders stockpiled on utilized cooking oil (UCO), lifting rates of the feedstock, while rates of biodiesel sank in view of diminishing demand for the Chinese supply.
“With substantial costs of UCO partially supported by strong U.S. and European need, and free-falling item costs, companies are having a difficult time enduring,” stated Gary Shan, chief marketing officer of Henan Junheng.
Prices of hydrotreated veggie oil, or HVO, a main kind of biodiesel, have actually cut in half versus last year’s average to the current $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 typically in July, below 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 forecast are set to touch a new high this year. UCO exports skyrocketed by two-thirds year-on-year in the first half of 2024 to 1.41 million loads, with the United States, Singapore and the Netherlands the leading locations.
OUTLETS
While numerous smaller sized plants are most likely to shutter production forever, bigger manufacturers 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 important center of Singapore, which is utilizing more biodiesel for ship fuel mixing, according to the biofuel executives.
One of the producers, Longyan Zhuoyue, concurred in January with COSCO Shipping to utilize more biodiesel in marine fuel.
Companies would likewise speed up preparation and structure of sustainable aviation fuel (SAF) plants, executives stated. China is expected to reveal an SAF required before the end of 2024.
They have also been scouting for new biodiesel customers outside the EU bloc, in Australia, Japan, South Korea and Southeast Asia where there are regional mandates for the alternative fuel, the officials included.
(Reporting by Chen Aizhu; Editing by Ana Nicolaci da Costa)
