Renewable diesel manufacturers utilization at 77%, highest considering that July - AEGIS
Biodiesel producers utilization rate hit 89% in Oct, highest since June 2023
Better credit costs, stronger diesel demand stimulated higher activity - analyst
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 data assembled by advisory group AEGIS Hedging.
Renewable diesel producers used 77% of their overall operable capability in October, the greatest given that July 2024, the information revealed. Biodiesel plant utilization rose to 89%, the greatest because June 2023.
Rising usage rates and enhancing margins are a welcome relief for the biofuels industry, after operators sustained a rough start to 2024 as demand growth slowed, leaving the market oversupplied and forcing a variety 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, renewable diesel has actually emerged as the preferred fuel for providers, as it enjoys much better rewards 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 launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as most brand-new biofuel plants opened in the previous 3 years were tailored towards it.
Still, oversupply pressed 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 market in October was improved generally by a rise in the worth 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 sustainable diesel production, increased from a low of 56 cents each in September to over 71 cents in October, improving success for making the fuels, Capozzola said.
Margins were also assisted by stronger need for diesel, which struck a 1 year high in October, raising rates for both the standard 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., also rose from listed below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You really had everything rowing in the ideal direction in October," Capozzola stated. (Reporting by Shariq Khan in New York City
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US Biofuel Producers Ramped up in Oct As Profitability Improved,
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