Renewable diesel producers utilization at 77%, highest given that July - AEGIS
Biodiesel manufacturers utilization rate struck 89% in Oct, greatest considering that June 2023
Better credit prices, more powerful diesel need spurred greater activity - expert
NEW YORK, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel manufacturers increase operations in October to multi-month highs, helped by more powerful margins for the biofuels, according to information assembled by advisory group AEGIS Hedging.
Renewable diesel producers made use of 77% of their overall operable capability in October, the highest since July 2024, the data showed. Biodiesel plant usage rose to 89%, the greatest since June 2023.
Rising utilization rates and improving margins are a welcome relief for the biofuels market, after operators sustained a rough start to 2024 as need development slowed, leaving the market oversupplied and a number of biodiesel plant closures.
Both sustainable diesel and biodiesel are more pricey to produce than diesel, making suppliers reliant on federal government rewards such as tax credits. Among the 2, sustainable diesel has emerged as the favored fuel for suppliers, as it enjoys much better incentives and can replace diesel totally.
Total biodiesel production capacity fell 4.2% year-over-year to about 2 billion gallons in October, according to information launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capability rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as a lot of new biofuel plants opened in the past three years were tailored towards it.
Still, oversupply pushed renewable 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 mainly by a surge in the worth of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of eco-friendly fuels at AEGIS.
D4 Renewable Identification Numbers, issued for biodiesel and sustainable 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 stronger demand for diesel, which hit an one-year high in October, raising costs for both the traditional fuel and its alternatives, 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 whatever rowing in the best instructions 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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