US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel manufacturers utilization at 77%, highest because July – AEGIS

Biodiesel manufacturers utilization rate hit 89% in Oct, highest given that June 2023

Better credit rates, stronger diesel need stimulated greater activity – expert

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

Renewable diesel manufacturers utilized 77% of their total operable capacity in October, the highest given that July 2024, the information showed. Biodiesel plant utilization rose to 89%, the greatest considering that June 2023.

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

Both sustainable diesel and biodiesel are more expensive to produce than diesel, making providers based on government incentives such as tax credits. Among the 2, sustainable diesel has actually emerged as the favored fuel for providers, as it enjoys better rewards and can substitute diesel completely.

Total biodiesel production capability fell 4.2% year-over-year to about 2 billion gallons in October, according to 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 data revealed, as a lot of brand-new biofuel plants opened in the past 3 years were geared towards it.

Still, oversupply pressed eco-friendly diesel output capability 6% lower in October from a record 4.90 billion gallons in June.

In addition to plant closures, success for the industry in October was increased mainly by a rise in the value of credits needed for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of sustainable fuels at AEGIS.

D4 Renewable Identification Numbers, provided for biodiesel and renewable 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 likewise helped by stronger need for diesel, which hit a 1 year high in October, raising costs 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 rose from listed below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

“You really had everything rowing in the best direction in October,” Capozzola stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)