Renewable diesel producers usage at 77%, greatest given that July - AEGIS
Biodiesel producers utilization rate hit 89% in Oct, greatest considering that June 2023
Better credit rates, stronger diesel demand spurred higher activity - expert
NEW YORK, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel manufacturers increase operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to information put together by advisory group AEGIS Hedging.
Renewable diesel manufacturers used 77% of their total operable capacity in October, the greatest since July 2024, the data showed. Biodiesel plant utilization increased to 89%, the highest because June 2023.
Rising utilization rates and improving margins are a welcome relief for the biofuels industry, after operators withstood a rough start to 2024 as demand development slowed, leaving the market oversupplied and forcing a variety of biodiesel plant closures.
Both renewable diesel and biodiesel are more expensive to produce than diesel, making suppliers based on government incentives such as tax credits. Among the 2, eco-friendly diesel has actually become the preferred fuel for suppliers, as it enjoys better incentives and can replace diesel totally.
Total biodiesel production capacity 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 increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as a lot of new 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 market in October was boosted generally by a rise in the worth of credits required for compliance with federal biofuel mandates, said Zander Capozzola, vice president of renewable fuels at AEGIS.
D4 Renewable Identification Numbers, provided for biodiesel and eco-friendly diesel production, increased from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola said.
Margins were also assisted by more powerful demand for diesel, which struck an one-year high in October, raising costs for both the standard 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 instructions in October," Capozzola said. (Reporting by Shariq Khan in New York City
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US Biofuel Producers Ramped up in Oct As Profitability Improved,
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