US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel manufacturers utilization at 77%, highest considering that July – AEGIS

Biodiesel manufacturers usage rate hit 89% in Oct, highest considering that June 2023

Better credit rates, stronger diesel need spurred higher activity – analyst

NEW YORK CITY, Jan 3 (Reuters) – U.S. eco-friendly diesel and biodiesel manufacturers increase 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 producers made use of 77% of their overall operable capability in October, the highest since July 2024, the information revealed. Biodiesel plant utilization rose to 89%, the highest given that June 2023.

Rising usage rates and improving margins are a welcome relief for the biofuels industry, after operators sustained a rough start to 2024 as need development slowed, leaving the marketplace oversupplied and forcing a variety of plant closures.

Both renewable diesel and biodiesel are more pricey to produce than diesel, making providers based on federal government incentives such as tax credits. Among the 2, eco-friendly diesel has emerged as the preferred fuel for providers, as it reaps better rewards and can replace diesel totally.

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 capability increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as the majority of brand-new biofuel plants opened in the past three years were geared 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, profitability for the industry in October was boosted primarily by a surge in the worth of credits needed for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, issued 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 stated.

Margins were also helped by more powerful need for diesel, which hit a 1 year high in October, raising costs 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 increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

“You actually had whatever rowing in the right direction in October,” Capozzola stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)