Renewable diesel producers usage at 77%, greatest considering that July - AEGIS

Biodiesel producers utilization rate struck 89% in Oct, greatest since June 2023

Better credit prices, more powerful diesel demand spurred greater activity - analyst

NEW YORK, Jan 3 (Reuters) - U.S. sustainable diesel and biodiesel manufacturers ramped up operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to information assembled by advisory group AEGIS Hedging.

Renewable diesel producers utilized 77% of their total operable capacity in October, the greatest because July 2024, the data showed. Biodiesel plant utilization rose to 89%, the highest considering that June 2023.

Rising usage rates and improving 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 forcing a variety of biodiesel plant closures.

Both renewable diesel and biodiesel are more costly to produce than diesel, making suppliers depending on government rewards such as tax credits. Among the 2, renewable diesel has become the favored fuel for suppliers, as it reaps much better rewards 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 capability rose nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information revealed, as the majority of new biofuel plants opened in the previous three years were geared towards it.

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

D4 Renewable Identification Numbers, released 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 likewise assisted by more powerful need for diesel, which struck a 1 year high in October, raising rates for both the standard fuel and its options, he stated.

Prices for credits under the Low Carbon Fuel Standard program of California, where most biofuels are consumed in the U.S., likewise rose from listed 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 said. (Reporting by Shariq Khan in New York City