US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel manufacturers utilization at 77%, greatest because July – AEGIS

Biodiesel manufacturers usage rate hit 89% in Oct, greatest given that June 2023

Better credit costs, more powerful diesel need spurred higher activity – expert

NEW YORK CITY, Jan 3 (Reuters) – U.S. sustainable diesel and biodiesel manufacturers increase operations in October to multi-month highs, assisted by more powerful margins for the biofuels, according to data put together by advisory group AEGIS Hedging.

Renewable diesel manufacturers made use of 77% of their total operable capacity in October, the highest since July 2024, the information revealed. Biodiesel plant utilization rose to 89%, the greatest given that June 2023.

Rising usage rates and enhancing 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 forcing a number of biodiesel plant closures.

Both and biodiesel are more expensive to produce than diesel, making suppliers depending on government incentives such as tax credits. Among the 2, sustainable diesel has emerged as the favored fuel for suppliers, as it reaps better rewards and can replace diesel entirely.

Total biodiesel production capability 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 increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as the majority of brand-new biofuel plants opened in the past three years were geared towards it.

Still, oversupply pressed renewable 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 increased generally by a surge in the worth of credits needed for compliance with federal biofuel mandates, 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.

Margins were likewise assisted by stronger demand for diesel, which hit a 1 year high in October, raising rates for both the traditional 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 rose from listed 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 stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)