1 US Biofuel Producers Increase in Oct As Profitability Improved,
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Renewable diesel producers usage at 77%, highest considering that July - AEGIS

Biodiesel producers utilization rate hit 89% in Oct, highest given that June 2023

Better credit costs, stronger diesel demand spurred higher activity - analyst

NEW YORK CITY, Jan 3 (Reuters) - U.S. eco-friendly diesel and biodiesel producers ramped up operations in October to multi-month highs, helped by stronger margins for the biofuels, according to data compiled by advisory group AEGIS Hedging.

Renewable diesel manufacturers utilized 77% of their overall operable capacity in October, the greatest considering that July 2024, the data revealed. Biodiesel plant utilization increased to 89%, the highest considering that June 2023.

Rising utilization rates and improving margins are a welcome relief for the biofuels market, after operators withstood a rough start to 2024 as need development slowed, leaving the marketplace oversupplied and requiring a number of biodiesel plant closures.

Both renewable diesel and biodiesel are more pricey to produce than diesel, making suppliers based on federal government incentives such as tax credits. Among the 2, eco-friendly diesel has actually become the favored fuel for providers, as it gains much better incentives and can replace diesel completely.

Total biodiesel production capacity 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 increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as a lot of brand-new biofuel plants opened in the previous three years were tailored towards it.

Still, oversupply pushed sustainable diesel output capability 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 enhanced mainly by a surge in the value of credits required for compliance with federal biofuel mandates, stated 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 likewise assisted by more powerful need for diesel, which hit an one-year high in October, raising prices for both the conventional fuel and its options, he stated.

Prices for credits under the Low Carbon Fuel Standard program of California, where most biofuels are consumed in the U.S., also from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

"You actually had whatever rowing in the best instructions in October,” Capozzola stated. (Reporting by Shariq Khan in New York City