
Mission Biofuels Sdn. Bhd
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US Biofuel Producers Increase in Oct As Profitability Improved,
Renewable diesel producers usage at 77%, highest considering that July – AEGIS
Biodiesel manufacturers usage rate struck 89% in Oct, highest because June 2023
Better credit costs, more powerful diesel demand stimulated higher activity – expert
NEW YORK, Jan 3 (Reuters) – U.S. eco-friendly 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 overall operable capacity in October, the highest since July 2024, the data revealed. Biodiesel plant utilization rose to 89%, the highest because June 2023.
Rising usage rates and enhancing margins are a welcome relief for the biofuels market, after operators sustained a rough start to 2024 as need development slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.
Both eco-friendly diesel and biodiesel are more pricey to produce than diesel, making providers depending 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 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 information launched by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capacity rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA data revealed, as most biofuel plants opened in the past 3 years were tailored towards it.
Still, oversupply pushed 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 improved primarily by a surge in the worth of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of sustainable fuels at AEGIS.
D4 Renewable Identification Numbers, issued for biodiesel and sustainable diesel production, rose from a low of 56 cents each in September to over 71 cents in October, improving profitability for making the fuels, Capozzola said.
Margins were also assisted by stronger demand for diesel, which hit an one-year high in October, raising rates for both the standard fuel and its alternatives, he said.
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 actually had everything rowing in the best instructions in October, » Capozzola stated. (Reporting by Shariq Khan in New York; Editing by David Gregorio)