Renewable diesel manufacturers usage at 77%, highest considering that July - AEGIS
Biodiesel producers utilization rate struck 89% in Oct, greatest considering that June 2023
Better credit prices, stronger diesel demand stimulated higher activity - expert
NEW YORK, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel producers ramped up operations in October to multi-month highs, helped by more powerful margins for the biofuels, according to data compiled by advisory group AEGIS Hedging.
Renewable diesel producers used 77% of their overall operable capacity in October, the highest given that July 2024, the information revealed. Biodiesel plant utilization increased to 89%, the highest considering that June 2023.
Rising usage rates and improving 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 requiring a number of biodiesel plant closures.
Both eco-friendly diesel and biodiesel are more costly to produce than diesel, making suppliers based on federal government incentives such as tax credits. Among the 2, eco-friendly diesel has actually emerged as the favored fuel for providers, as it reaps better rewards and can replace diesel completely.
Total biodiesel production capability fell 4.2% year-over-year to about 2 billion gallons in October, according to data 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 information showed, as the majority of brand-new biofuel plants opened in the past 3 years were geared 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, success for the market in October was increased mainly by a surge in the worth of credits needed for compliance with federal biofuel requireds, stated Zander Capozzola, vice of eco-friendly fuels at AEGIS.
D4 Renewable Identification Numbers, released for biodiesel and eco-friendly diesel production, increased 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 more powerful need for diesel, which struck an one-year high in October, raising rates for both the traditional 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 below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You actually 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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