Renewable diesel producers usage at 77%, greatest considering that July - AEGIS
Biodiesel manufacturers utilization rate struck 89% in Oct, greatest since June 2023
Better credit prices, more powerful diesel need spurred higher activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel producers ramped up operations in October to multi-month highs, assisted by more powerful 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 since July 2024, the data showed. Biodiesel plant usage increased to 89%, the greatest considering that June 2023.
Rising utilization rates and enhancing margins are a welcome relief for the biofuels market, 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 sustainable 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 become the favored fuel for providers, as it reaps better incentives and can replace diesel completely.
Total biodiesel production capacity 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 capacity increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as many new biofuel plants opened in the past three years were geared towards it.
Still, 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 primarily by a rise in the value of credits required for compliance with federal biofuel requireds, said Zander Capozzola, vice president of sustainable 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 said.
Margins were likewise assisted by more powerful demand for diesel, which struck a 1 year high in October, raising costs for both the standard 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., likewise rose 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 right direction in October," Capozzola stated. (Reporting by Shariq Khan in New York
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US Biofuel Producers Ramped up in Oct As Profitability Improved,
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