Renewable diesel producers utilization at 77%, highest given that July - AEGIS
Biodiesel producers usage rate struck 89% in Oct, highest because June 2023
Better credit costs, more powerful diesel demand spurred higher expert
NEW YORK CITY, Jan 3 (Reuters) - U.S. renewable diesel and biodiesel producers increase operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to information assembled by advisory group AEGIS Hedging.
Renewable diesel producers used 77% of their overall operable capability in October, the highest considering that July 2024, the information showed. Biodiesel plant utilization increased to 89%, the highest considering that 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 demand development slowed, leaving the market oversupplied and requiring a variety of biodiesel plant closures.
Both sustainable diesel and biodiesel are more costly to produce than diesel, making providers reliant on federal government incentives such as tax credits. Among the 2, sustainable diesel has actually emerged as the preferred fuel for providers, as it enjoys much better rewards 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 launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capacity increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as most new biofuel plants opened in the previous three years were tailored 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 industry in October was enhanced primarily by a surge in the value 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, increased from a low of 56 cents each in September to over 71 cents in October, enhancing success for making the fuels, Capozzola said.
Margins were also helped by stronger demand for diesel, which hit a 1 year high in October, raising prices for both the conventional fuel and its options, 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 truly had everything rowing in the right instructions in October," Capozzola said. (Reporting by Shariq Khan in New York
1
US Biofuel Producers Increase in Oct As Profitability Improved,
Christena Kirklin edited this page 3 months ago