US Biofuel Producers Ramped up in Oct As Profitability Improved,
Renewable diesel manufacturers usage at 77%, greatest since July - AEGIS
Biodiesel producers usage rate hit 89% in Oct, highest because June 2023
Better credit costs, stronger diesel need spurred higher activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel manufacturers ramped up operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to data assembled by advisory group AEGIS Hedging.
Renewable diesel producers utilized 77% of their overall operable capability in October, the greatest since July 2024, the information showed. Biodiesel plant utilization increased to 89%, the greatest considering that June 2023.
Rising usage rates and improving margins are a welcome relief for the biofuels market, 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 pricey to produce than diesel, making providers depending on federal government incentives such as tax credits. Among the 2, sustainable diesel has actually become the favored fuel for suppliers, as it reaps much better rewards and can replace diesel entirely.
Total biodiesel production capacity fell 4.2% year-over-year to about 2 billion gallons in October, according to data released 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 revealed, as most brand-new biofuel plants opened in the previous three 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, success for the industry in October was enhanced generally by a rise in the value of credits needed for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of renewable fuels at AEGIS.
D4 Renewable Identification Numbers, released 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 stated.
were likewise assisted by more powerful demand for diesel, which struck an one-year high in October, raising rates for both the standard fuel and its alternatives, 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 truly had whatever rowing in the right direction in October," Capozzola said. (Reporting by Shariq Khan in New York; Editing by David Gregorio)