Mission Biofuels India Private Ltd

US Biofuel Producers Increase in Oct As Profitability Improved,

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

Biodiesel producers utilization rate struck 89% in Oct, highest because 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 ramped up 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 utilized 77% of their overall operable capacity in October, the highest given that July 2024, the data revealed. Biodiesel plant utilization rose to 89%, the highest since June 2023.

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

Both renewable diesel and biodiesel are more costly to produce than diesel, making suppliers based on government incentives such as tax credits. Among the 2, eco-friendly diesel has actually emerged as the favored fuel for providers, 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 released by the U.S. Energy Information Administration on Tuesday.

Renewable diesel output capacity increased almost 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as most brand-new biofuel plants opened in the previous three years were tailored towards it.

Still, oversupply pressed sustainable diesel output capacity 6% lower in October from a record 4.90 billion gallons in June.

In addition to plant closures, success for the industry in October was boosted primarily by a surge in the worth of credits required for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of eco-friendly 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, improving profitability for making the fuels, Capozzola stated.

Margins were likewise assisted by stronger demand for diesel, which struck an one-year high in October, raising rates for both the conventional 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 increased from listed 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; Editing by David Gregorio)