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1 US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel manufacturers usage at 77%, greatest because July - AEGIS

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

Better credit prices, more powerful diesel demand stimulated greater activity - expert

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

Renewable diesel manufacturers made use of 77% of their overall operable capability in October, the greatest considering that July 2024, the information showed. Biodiesel plant usage increased to 89%, the greatest because June 2023.

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

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

Total biodiesel production capacity 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 capacity rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as the majority of brand-new biofuel plants opened in the previous 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, success for the market in October was boosted generally by a surge in the value of 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 sustainable diesel production, rose from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola stated.

Margins were also assisted by more powerful demand for diesel, which struck a 1 year high in October, raising rates for both the conventional 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., also increased from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

"You really had whatever rowing in the best instructions in October," Capozzola stated. (Reporting by Shariq Khan in New York City