US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel producers usage at 77%, highest because July – AEGIS

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

Better credit prices, stronger diesel need spurred higher activity – expert

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

Renewable diesel manufacturers used 77% of their overall operable capacity in October, the highest because July 2024, the information showed. Biodiesel plant usage rose to 89%, the greatest because June 2023.

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

Both renewable diesel and biodiesel are more pricey to produce than diesel, making suppliers reliant on federal government incentives such as tax credits. Among the 2, sustainable diesel has actually emerged as the favored fuel for suppliers, as it enjoys much 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 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 showed, as most new biofuel plants opened in the past 3 years were tailored towards it.

Still, oversupply pushed 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 market in October was increased generally by a surge in the worth of credits required for compliance with federal biofuel mandates, said Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, issued for and eco-friendly diesel production, rose from a low of 56 cents each in September to over 71 cents in October, enhancing success for making the fuels, Capozzola stated.

Margins were likewise assisted by more powerful demand for diesel, which hit an one-year high in October, raising rates 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 increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

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