Renewable diesel manufacturers utilization at 77%, greatest given that July - AEGIS

Biodiesel producers usage rate struck 89% in Oct, greatest because June 2023

Better credit prices, stronger diesel demand stimulated higher activity - analyst

NEW YORK, Jan 3 (Reuters) - U.S. eco-friendly diesel and biodiesel manufacturers ramped up operations in October to highs, helped by more powerful margins for the biofuels, according to data assembled by advisory group AEGIS Hedging.

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

Rising utilization rates and improving margins are a welcome relief for the biofuels market, after operators sustained a rough start to 2024 as demand development slowed, leaving the market oversupplied and forcing a variety of biodiesel plant closures.

Both eco-friendly diesel and biodiesel are more costly to produce than diesel, making providers dependent on government rewards such as tax credits. Among the 2, sustainable diesel has actually become the favored fuel for suppliers, as it gains better incentives and can substitute diesel totally.

Total biodiesel production capability fell 4.2% year-over-year to about 2 billion gallons in October, according to data launched 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 data revealed, as many new biofuel plants opened in the past 3 years were tailored towards it.

Still, oversupply pushed eco-friendly diesel output capability 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 increased primarily by a rise in the worth of credits required for compliance with federal biofuel requireds, said Zander Capozzola, vice president of renewable fuels at AEGIS.

D4 Renewable Identification Numbers, released for biodiesel and eco-friendly diesel production, rose 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 likewise helped by more powerful need for diesel, which hit a 1 year high in October, raising prices for both the conventional fuel and its options, he said.

Prices for credits under the Low Carbon Fuel Standard program of California, where most biofuels are consumed in the U.S., likewise 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 right instructions in October," Capozzola stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)