US Biofuel Producers Increase in Oct As Profitability Improved,

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

Biodiesel producers hit 89% in Oct, greatest since June 2023

Better credit rates, stronger diesel demand spurred greater activity – expert

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

Renewable diesel producers utilized 77% of their overall operable capability in October, the greatest given that July 2024, the information revealed. Biodiesel plant usage rose to 89%, the greatest given that June 2023.

Rising usage rates and improving margins are a welcome relief for the biofuels industry, after operators sustained a rough start to 2024 as demand development slowed, leaving the marketplace oversupplied and forcing a variety of biodiesel plant closures.

Both renewable diesel and biodiesel are more expensive to produce than diesel, making suppliers depending on government rewards such as tax credits. Among the 2, sustainable diesel has actually emerged as the preferred fuel for suppliers, as it reaps much better rewards and can replace diesel completely.

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

Renewable diesel output capability rose almost 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as many new biofuel plants opened in the past 3 years were tailored towards it.

Still, oversupply pushed renewable diesel output capability 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 increased generally by a surge in the worth of credits needed for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of sustainable fuels at AEGIS.

D4 Renewable Identification Numbers, released for biodiesel and sustainable diesel production, rose 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 assisted by more powerful need for diesel, which struck a 1 year high in October, raising rates for both the standard fuel and its options, he stated.

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

«You actually had whatever rowing in the right direction in October,» Capozzola stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)