Renewable diesel manufacturers usage at 77%, greatest because July - AEGIS

Biodiesel producers utilization rate struck 89% in Oct, highest since June 2023

Better credit prices, more powerful diesel need spurred greater activity - expert

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

Renewable diesel manufacturers used 77% of their overall operable capability in October, the highest since July 2024, the data revealed. Biodiesel plant utilization rose to 89%, the greatest considering that June 2023.

Rising utilization rates and enhancing 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 sustainable diesel and biodiesel are more pricey to produce than diesel, making providers depending on federal government rewards such as tax credits. Among the 2, renewable diesel has become the favored fuel for suppliers, as it reaps much better rewards and can replace diesel totally.

Total biodiesel production capacity 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 information revealed, as a lot of brand-new biofuel plants opened in the previous 3 years were geared towards it.

Still, oversupply pressed renewable diesel output capacity 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 boosted mainly by a surge in the value of credits required for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of renewable fuels at AEGIS.

D4 Renewable Identification Numbers, issued for biodiesel and eco-friendly 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.

were likewise assisted by more powerful demand for diesel, which struck a 1 year high in October, raising costs for both the standard 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., likewise rose from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

"You truly had whatever rowing in the ideal instructions in October," Capozzola stated. (Reporting by Shariq Khan in New York City