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1 US Biofuel Producers Ramped up in Oct As Profitability Improved,

Renewable diesel manufacturers usage at 77%, highest since July - AEGIS

Biodiesel producers usage rate struck 89% in Oct, highest because June 2023

Better credit rates, stronger diesel demand stimulated greater activity - expert

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

Renewable diesel producers utilized 77% of their total operable capability in October, the highest because July 2024, the information revealed. Biodiesel plant utilization rose to 89%, the greatest since June 2023.

Rising utilization rates and improving margins are a welcome relief for the biofuels market, after operators sustained a rough start to 2024 as demand development slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.

Both sustainable diesel and biodiesel are more pricey to produce than diesel, making providers depending on federal government incentives such as tax credits. Among the 2, eco-friendly diesel has emerged as the preferred fuel for suppliers, as it gains better incentives and can replace diesel entirely.

Total biodiesel production 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 capability increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as a lot of brand-new biofuel plants opened in the past three years were geared towards it.

Still, oversupply pushed eco-friendly diesel output capability 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 improved mainly by a surge in the worth of credits required for compliance with federal biofuel mandates, said Zander Capozzola, vice president of renewable 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, enhancing success for making the fuels, Capozzola stated.

Margins were also assisted by stronger need for diesel, which hit a 1 year high in October, raising prices for both the standard 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 really had whatever rowing in the ideal direction in October," Capozzola stated. (Reporting by Shariq Khan in New York