Agro Diesel (India) Private Ltd

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  • Founded Date November 26, 1941
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China’s Biodiesel Producers Seek new Outlets As Hefty EU Tariffs Bite

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 biggest buyer, dries up ahead of anti-dumping tariffs, biofuel executives and experts stated.

The EU will enforce provisionary anti-dumping responsibilities of between 12.8% and 36.4% on Chinese biodiesel from Friday, striking over 40 business including leading producers Jiaao, Henan Junheng and Longyan Zhuoyue Group in an export organization that deserved $2.3 billion in 2015.

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 already falling biodiesel exports to the EU, biofuel executives said.

Exports to the bloc have actually fallen greatly considering that mid-2023 amidst investigations. Volumes in the very first six months of this year plunged 51% from a year previously to 567,440 heaps, Chinese customizeds data showed.

June shipments shrank to just over 50,000 loads, the most affordable because 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 shipments to the EU, followed by Belgium and Spain, Chinese customizeds figures revealed.

Chinese producers of biodiesel have actually taken pleasure in fat profits in the last few years, maximizing the EU’s green energy policy that gives aids to companies that are using biodiesel as a sustainable transportation fuel such as Repsol, Shell and Neste.

A number of China’s biodiesel manufacturers are privately-run small plants using scores of employees processing waste oil collected from millions of Chinese dining establishments. Before the biodiesel export boom, they were making lower-value items like soaps and processing leather products.

However, the boom was short-lived. The EU started in August in 2015 examining Indonesian biodiesel that was suspected of preventing responsibilities by going through China and Britain, followed by a 14-month anti-dumping probe into Chinese biodiesel thought to be priced artificially low and damaging regional producers.

Anticipating the tariffs, traders stockpiled on used cooking oil (UCO), raising rates of the feedstock, while prices 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 need, and free-falling product rates, 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 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 added.

With low prices, biodiesel plants have actually cut their operations to a lowest level 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, diminishing 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 destinations.

OUTLETS

While numerous smaller sized plants are most likely to shutter production indefinitely, bigger 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 essential hub of Singapore, which is utilizing more biodiesel for ship fuel blending, according to the biofuel executives.

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

Companies would also accelerate planning and structure of sustainable air travel fuel (SAF) plants, executives said. China is anticipated to announce an SAF required before completion of 2024.

They have also been scouting 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 authorities included.

(Reporting by Chen Aizhu; Editing by Ana Nicolaci da Costa)

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