Chinese biodiesel producers are actively seeking new markets in Asia and exploring the production of alternative biofuels as their primary export destination, the European Union (EU), imposes significant anti-dumping tariffs. Starting Friday, the EU will implement provisional duties ranging from 12.8% to 36.4% on biodiesel imports from China, affecting over 40 companies, including major producers like Zhejiang Jiaao and Henan Junheng.
This move comes as exports to the EU have sharply declined, with volumes dropping 51% in the first half of 2024 compared to the previous year, totaling 567,440 tons. June shipments fell to just over 50,000 tons, the lowest level since mid-2019. At their peak in 2023, exports to the EU reached 1.8 million tons, accounting for 90% of China’s biodiesel exports, with the Netherlands being the largest importer.
Chinese biodiesel producers have benefited from the EU’s green energy policies in recent years, but the situation has changed dramatically due to investigations into alleged dumping practices and circumvention of duties. As a result, many producers are now looking toward the marine fuel market in China and Singapore to offset declining biodiesel exports.
The tightening market has led to increased prices for used cooking oil (UCO), the primary feedstock for biodiesel, while prices for biodiesel itself have plummeted. The price of hydrotreated vegetable oil (HVO) has halved compared to last year, leading to significant reductions in production capacity. In July, biodiesel plants operated at less than 20% of their capacity, down from 50% earlier in 2023.
Meanwhile, the decrease in biodiesel sales has resulted in a surge in UCO exports, which are expected to reach record levels this year, with a 66% year-on-year increase in the first half of 2024, primarily to the U.S., Singapore, and the Netherlands.