Renewable diesel producers utilization at 77%, highest considering that July - AEGIS
Biodiesel producers utilization rate struck 89% in Oct, greatest since June 2023
Better credit costs, more powerful diesel need stimulated greater activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel manufacturers ramped up operations in October to multi-month highs, helped by more powerful margins for the biofuels, according to data put together by advisory group AEGIS Hedging.
Renewable diesel producers utilized 77% of their overall operable capability in October, the highest since July 2024, the data revealed. Biodiesel plant utilization rose to 89%, the greatest given that June 2023.
Rising utilization rates and enhancing margins are a welcome relief for the biofuels industry, after operators withstood a rough start to 2024 as need growth slowed, leaving the market oversupplied and forcing a variety of biodiesel plant closures.
Both eco-friendly diesel and biodiesel are more expensive to produce than diesel, making suppliers depending on federal government rewards such as tax credits. Among the 2, sustainable diesel has emerged as the favored fuel for suppliers, as it gains much better incentives and can entirely.
Total biodiesel production capacity 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 nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as most brand-new biofuel plants opened in the past 3 years were tailored 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, success for the industry in October was increased generally by a rise in the value of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of sustainable 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, improving profitability for making the fuels, Capozzola said.
Margins were likewise assisted by more powerful demand for diesel, which hit a 1 year high in October, raising prices for both the conventional fuel and its alternatives, 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 listed below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You really had everything rowing in the ideal direction in October," Capozzola said. (Reporting by Shariq Khan in New York
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US Biofuel Producers Increase in Oct As Profitability Improved,
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