Renewable diesel producers utilization at 77%, highest since July - AEGIS

Biodiesel manufacturers utilization rate hit 89% in Oct, greatest given that June 2023

Better credit prices, more powerful diesel need stimulated higher activity - analyst

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

Renewable diesel manufacturers made use of 77% of their total operable capacity in October, the greatest because July 2024, the data revealed. Biodiesel plant usage rose to 89%, the highest since June 2023.

Rising utilization rates and enhancing margins are a welcome relief for the biofuels industry, after operators endured a rough start to 2024 as need 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 based on government incentives such as tax credits. Among the 2, sustainable diesel has emerged as the favored fuel for suppliers, as it enjoys better incentives and can replace diesel completely.

Total biodiesel production capacity 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 nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as most brand-new biofuel plants opened in the past three years were tailored towards it.

Still, oversupply pressed sustainable diesel output capability 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 improved primarily by a surge in the worth of credits needed for compliance with federal biofuel mandates, said Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, issued for biodiesel and eco-friendly diesel production, rose from a low of 56 cents each in September to over 71 cents in October, improving success for making the fuels, Capozzola said.

were also assisted by more powerful need for diesel, which struck a 1 year high in October, raising costs 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 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 stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)