US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel producers utilization at 77%, greatest because July – AEGIS

Biodiesel producers utilization rate hit 89% in Oct, greatest since June 2023

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

NEW YORK CITY, Jan 3 (Reuters) – U.S. eco-friendly diesel and biodiesel producers increase operations in October to multi-month highs, assisted by more powerful margins for the biofuels, according to information put together by advisory group AEGIS Hedging.

Renewable diesel made use of 77% of their overall operable capability in October, the greatest since July 2024, the data revealed. Biodiesel plant utilization increased to 89%, the highest because June 2023.

Rising utilization rates and enhancing margins are a welcome relief for the biofuels industry, after operators endured a rough start to 2024 as demand growth slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.

Both renewable diesel and biodiesel are more pricey to produce than diesel, making suppliers depending on federal government rewards 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 entirely.

Total biodiesel production capability 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 capacity rose almost 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as many brand-new biofuel plants opened in the previous 3 years were geared towards it.

Still, oversupply pressed eco-friendly 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 boosted generally by a surge 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 renewable diesel production, increased from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola said.

Margins were also assisted by stronger demand for diesel, which hit an one-year high in October, raising rates for both the traditional 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., likewise increased from listed below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

“You truly had everything rowing in the ideal direction in October,” Capozzola stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)