US Biofuel Producers Ramped up in Oct As Profitability Improved,

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

Biodiesel producers usage rate hit 89% in Oct, highest because June 2023

Better credit costs, more powerful diesel demand stimulated greater activity – analyst

NEW YORK CITY, Jan 3 (Reuters) – U.S. renewable diesel and biodiesel producers increase 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 total operable capacity in October, the greatest since July 2024, the information showed. 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 demand development slowed, leaving the market oversupplied and requiring a variety of biodiesel plant closures.

Both eco-friendly diesel and biodiesel are more expensive 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 gains much better rewards and can substitute 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 almost 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as a lot of brand-new biofuel plants opened in the past 3 years were geared towards it.

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

In addition to plant closures, profitability for the industry in October was increased primarily by a surge in the worth of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, provided for biodiesel and sustainable diesel production, rose from a low of 56 cents each in September to over 71 cents in October, for making the fuels, Capozzola said.

Margins were likewise assisted by stronger demand for diesel, which hit an one-year high in October, raising prices for both the traditional fuel and its alternatives, he stated.

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