Renewable diesel manufacturers utilization at 77%, highest because July - AEGIS

Biodiesel producers utilization rate hit 89% in Oct, greatest considering that June 2023

Better credit costs, stronger diesel demand spurred greater activity - expert

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

Renewable diesel manufacturers utilized 77% of their total operable capability in October, the greatest since July 2024, the data revealed. Biodiesel plant usage increased to 89%, the greatest considering that June 2023.

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

Both eco-friendly diesel and biodiesel are more expensive to produce than diesel, making providers dependent on federal government rewards such as tax credits. Among the 2, sustainable diesel has actually emerged as the favored fuel for suppliers, as it reaps much better rewards and can replace diesel completely.

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 most new biofuel plants opened in the past three 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, success for the industry in October was increased mainly by a surge in the value of credits needed for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of renewable fuels at AEGIS.

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

Margins were likewise assisted by stronger need for diesel, which hit an one-year high in October, raising rates 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., 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 best instructions in October," Capozzola stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)