US Biofuel Producers Ramped up in Oct As Profitability Improved,

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

Biodiesel manufacturers usage rate struck 89% in Oct, greatest since June 2023

Better credit costs, more powerful diesel demand spurred higher activity – expert

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

producers utilized 77% of their total operable capacity in October, the greatest considering that July 2024, the data showed. Biodiesel plant usage rose to 89%, the highest considering that June 2023.

Rising usage rates and enhancing margins are a welcome relief for the biofuels market, after operators endured a rough start to 2024 as demand development slowed, leaving the market oversupplied and requiring a number of biodiesel plant closures.

Both eco-friendly diesel and biodiesel are more pricey to produce than diesel, making providers depending on government incentives such as tax credits. Among the 2, sustainable diesel has emerged as the favored fuel for suppliers, as it gains better rewards and can substitute diesel entirely.

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

Renewable diesel output capacity rose almost 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as many new biofuel plants opened in the previous three years were tailored towards it.

Still, oversupply pressed sustainable diesel output capacity 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 improved generally by a surge in the worth of credits needed for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, released for biodiesel and eco-friendly 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 stated.

Margins were also helped by more powerful need for diesel, which hit a 1 year high in October, raising prices for both the conventional 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 increased from listed 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)