US Biofuel Producers Increase in Oct As Profitability Improved,

Comments · 5 Views

Renewable diesel producers usage at 77%, greatest considering that July - AEGIS

Renewable diesel manufacturers usage at 77%, greatest since July - AEGIS


Biodiesel manufacturers utilization rate struck 89% in Oct, highest since June 2023


Better credit rates, stronger diesel demand spurred 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 compiled by advisory group AEGIS Hedging.


Renewable diesel manufacturers made use of 77% of their overall operable capability in October, the greatest considering that July 2024, the information showed. Biodiesel plant utilization rose to 89%, the highest since 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 market oversupplied and requiring a number of biodiesel plant closures.


Both sustainable diesel and biodiesel are more expensive to produce than diesel, making providers based on federal government incentives such as tax credits. Among the 2, renewable diesel has become the favored fuel for suppliers, as it enjoys much better incentives 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 capacity rose 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 tailored 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, profitability for the market in October was improved mainly by a rise in the worth of credits required for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of renewable fuels at AEGIS.


D4 Renewable Identification Numbers, provided for biodiesel and eco-friendly 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 stated.


Margins were likewise helped by stronger demand for diesel, which hit a 1 year high in October, raising rates for both the traditional 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 below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.


"You actually had everything rowing in the best direction in October," Capozzola stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)

Comments