US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel manufacturers usage at 77%, highest given that July – AEGIS

Biodiesel producers usage rate struck 89% in Oct, highest considering that June 2023

Better credit rates, stronger diesel demand stimulated higher activity – analyst

NEW YORK, Jan 3 (Reuters) – U.S. sustainable diesel and biodiesel producers increase operations in October to multi-month highs, helped by stronger margins for the biofuels, according to information put together by advisory group AEGIS Hedging.

Renewable diesel producers used 77% of their total operable capacity in October, the greatest considering that July 2024, the data revealed. Biodiesel plant utilization increased to 89%, the greatest since June 2023.

Rising utilization rates and enhancing margins are a welcome relief for the biofuels market, after operators sustained a rough start to 2024 as need growth slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.

Both eco-friendly diesel and are more pricey to produce than diesel, making suppliers depending on government rewards such as tax credits. Among the 2, eco-friendly diesel has actually become the preferred fuel for providers, as it enjoys much better rewards and can substitute diesel completely.

Total biodiesel production capacity fell 4.2% year-over-year to about 2 billion gallons in October, according to data released by the U.S. Energy Information Administration on Tuesday.

Renewable diesel output capability rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as many brand-new biofuel plants opened in the previous three years were geared towards it.

Still, oversupply pressed renewable diesel output capacity 6% lower in October from a record 4.90 billion gallons in June.

In addition to plant closures, profitability for the industry in October was improved generally by a rise in the worth of credits needed for compliance with federal biofuel mandates, said Zander Capozzola, vice president of renewable fuels at AEGIS.

D4 Renewable Identification Numbers, provided for biodiesel and sustainable diesel production, increased from a low of 56 cents each in September to over 71 cents in October, improving profitability for making the fuels, Capozzola said.

Margins were also assisted by more powerful need for diesel, which struck an one-year high in October, raising rates for both the conventional fuel and its options, he said.

Prices for credits under the Low Carbon Fuel Standard program of California, where most biofuels are consumed in the U.S., also increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

“You really had whatever rowing in the ideal instructions in October,” Capozzola said. (Reporting by Shariq Khan in New York; Editing by David Gregorio)