US Biofuel Producers Increase in Oct As Profitability Improved,
Renewable diesel manufacturers utilization at 77%, greatest considering that July - AEGIS
Biodiesel producers utilization rate struck 89% in Oct, greatest since June 2023
Better credit prices, stronger diesel demand spurred greater activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. eco-friendly diesel and biodiesel manufacturers increase operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to data compiled by advisory group AEGIS Hedging.
Renewable diesel manufacturers utilized 77% of their overall operable capability in October, the greatest considering that July 2024, the data revealed. Biodiesel plant utilization rose to 89%, the highest considering that 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 need development slowed, leaving the market oversupplied and requiring a number of biodiesel plant closures.
Both renewable diesel and biodiesel are more costly to produce than diesel, making providers based on federal government incentives such as tax credits. Among the 2, eco-friendly diesel has become the favored fuel for providers, as it reaps much better rewards and can substitute diesel totally.
Total biodiesel production capability fell 4.2% year-over-year to about 2 billion gallons in October, according to data launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capability increased almost 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as most new biofuel plants opened in the previous 3 years were tailored 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, profitability for the market in October was enhanced primarily by a surge in the worth of credits required for compliance with federal biofuel requireds, stated Zander Capozzola, vice 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.
Margins were likewise helped 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 stated.
Prices for credits under the Low Carbon Fuel Standard program of California, where most biofuels are consumed in the U.S., likewise rose from 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 stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)