Renewable diesel manufacturers usage at 77%, highest given that July - AEGIS
Biodiesel producers usage rate struck 89% in Oct, highest since June 2023
Better credit rates, more powerful diesel demand stimulated greater activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. renewable diesel and biodiesel manufacturers ramped up operations in October to multi-month highs, assisted 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 capacity in October, the greatest given that July 2024, the information showed. Biodiesel plant utilization rose to 89%, the greatest given that June 2023.
Rising utilization rates and improving margins are a welcome relief for the biofuels industry, after operators withstood a rough start to 2024 as demand development slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.
Both renewable diesel and biodiesel are more costly to produce than diesel, making providers based on government rewards such as tax credits. Among the 2, eco-friendly diesel has actually emerged as the preferred fuel for providers, as it reaps much better rewards and can substitute diesel totally.
Total biodiesel production capacity fell 4.2% year-over-year to about 2 billion gallons in October, according to data launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capacity increased almost 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as many new biofuel plants opened in the previous three years were tailored towards it.
Still, oversupply pushed sustainable diesel output capacity 6% lower in October from a record 4.90 billion gallons in June.
In addition to plant closures, profitability for the industry in October was improved generally by a surge in the worth of credits required for compliance with federal biofuel mandates, 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 success for making the fuels, Capozzola said.
Margins were also helped by stronger need for diesel, which hit an one-year high in October, raising rates for both the conventional fuel and its alternatives, he stated.
Prices for credits under the Fuel Standard program of California, where most biofuels are consumed in the U.S., also increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You truly had everything rowing in the ideal instructions in October," Capozzola said. (Reporting by Shariq Khan in New York City
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US Biofuel Producers Increase in Oct As Profitability Improved,
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