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US Biofuel Producers Ramped up in Oct As Profitability Improved,

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

Biodiesel producers usage rate struck 89% in Oct, greatest given that June 2023

Better credit rates, more powerful diesel demand spurred greater activity – analyst

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

Renewable diesel manufacturers utilized 77% of their total operable capability in October, the highest considering that July 2024, the data revealed. Biodiesel plant usage rose to 89%, the highest considering that June 2023.

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

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

Total biodiesel production capability 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 capacity increased almost 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as the majority of new biofuel plants opened in the previous three years were geared towards it.

Still, oversupply pressed eco-friendly 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 enhanced mainly by a surge in the worth of credits required for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of renewable fuels at AEGIS.

D4 Renewable Identification Numbers, released for biodiesel and renewable diesel production, rose from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola stated.

were likewise assisted by stronger need for diesel, which hit an one-year high in October, raising rates for both the standard fuel and its alternatives, he stated.

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

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