Renewable diesel manufacturers utilization at 77%, greatest considering that July - AEGIS
Biodiesel manufacturers utilization rate hit 89% in Oct, highest considering that June 2023
Better credit costs, stronger diesel need spurred greater activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel producers increase operations in October to multi-month highs, helped by stronger margins for the biofuels, according to information compiled by advisory group AEGIS Hedging.
Renewable diesel manufacturers utilized 77% of their overall operable capability in October, the highest since July 2024, the data showed. Biodiesel plant to 89%, the highest because June 2023.
Rising usage rates and enhancing margins are a welcome relief for the biofuels industry, after operators withstood a rough start to 2024 as demand development slowed, leaving the market oversupplied and forcing a variety of biodiesel plant closures.
Both eco-friendly diesel and biodiesel are more pricey to produce than diesel, making suppliers based on government rewards such as tax credits. Among the 2, renewable diesel has emerged as the favored fuel for providers, as it gains 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 increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as most brand-new biofuel plants opened in the previous three years were geared towards it.
Still, oversupply pressed 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 generally by a surge in the worth of credits required for compliance with federal biofuel mandates, stated Zander Capozzola, vice president 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 also assisted by more powerful need for diesel, which hit a 1 year high in October, raising costs for both the conventional 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., also rose from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You really had whatever rowing in the best direction in October," Capozzola said. (Reporting by Shariq Khan in New York City
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US Biofuel Producers Ramped up in Oct As Profitability Improved,
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