Mission NewEnergy Ltd

US Biofuel Producers Increase in Oct As Profitability Improved,

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

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

Better credit costs, demand stimulated greater activity – expert

NEW YORK, Jan 3 (Reuters) – U.S. sustainable diesel and biodiesel manufacturers ramped up operations in October to multi-month highs, assisted by more powerful margins for the biofuels, according to information assembled by advisory group AEGIS Hedging.

Renewable diesel producers made use of 77% of their overall operable capacity in October, the greatest since July 2024, the information revealed. Biodiesel plant usage rose to 89%, the highest since June 2023.

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

Both sustainable diesel and biodiesel are more expensive to produce than diesel, making providers dependent on federal government incentives such as tax credits. Among the 2, renewable diesel has actually become the preferred fuel for providers, as it gains better incentives 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 almost 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as a lot of new biofuel plants opened in the previous 3 years were geared towards it.

Still, oversupply pushed 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 increased mainly by a surge in the worth of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of renewable fuels at AEGIS.

D4 Renewable Identification Numbers, provided for biodiesel and eco-friendly diesel production, rose from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola stated.

Margins were likewise assisted by stronger demand for diesel, which hit a 1 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., also rose from listed below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

“You really had everything rowing in the best instructions in October,” Capozzola stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)