Renewable diesel producers usage at 77%, highest since July - AEGIS
Biodiesel producers usage rate hit 89% in Oct, highest considering that June 2023
Better credit prices, stronger diesel need stimulated higher activity - expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. renewable diesel and biodiesel producers increase operations in October to multi-month highs, helped by stronger margins for the biofuels, according to data compiled by advisory group AEGIS Hedging.
Renewable diesel manufacturers made use of 77% of their total operable capability in October, the greatest given that July 2024, the data showed. Biodiesel plant utilization rose to 89%, the greatest because June 2023.
Rising utilization 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 number of biodiesel plant closures.
Both and biodiesel are more pricey to produce than diesel, making providers dependent on federal government incentives such as tax credits. Among the 2, renewable diesel has actually emerged as the preferred fuel for providers, as it reaps much better incentives and can substitute diesel entirely.
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 almost 19% year-over-year to 4.58 billion gallons in October, the EIA data showed, as the majority of new biofuel plants opened in the past 3 years were geared 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, profitability for the industry in October was enhanced generally by a surge in the worth of credits required for compliance with federal biofuel requireds, said Zander Capozzola, vice president of sustainable 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 a 1 year high in October, raising rates for both the conventional 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 increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
"You truly had whatever rowing in the right instructions in October," Capozzola said. (Reporting by Shariq Khan in New York City
1
US Biofuel Producers Ramped up in Oct As Profitability Improved,
Bruno Easterbrook edited this page 1 week ago