Renewable diesel manufacturers utilization at 77%, highest considering that July - AEGIS

Biodiesel manufacturers usage rate hit 89% in Oct, highest given that June 2023

Better credit costs, more powerful diesel need spurred higher activity - analyst

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

Renewable diesel manufacturers utilized 77% of their total operable capacity in October, the highest since July 2024, the data revealed. Biodiesel plant utilization increased to 89%, the highest because 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 need development slowed, leaving the and requiring a number of biodiesel plant closures.

Both renewable diesel and biodiesel are more pricey to produce than diesel, making suppliers dependent on government rewards such as tax credits. Among the 2, renewable diesel has actually emerged as the preferred fuel for providers, as it gains better rewards and can replace diesel completely.

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

Still, oversupply pushed 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 increased mainly by a surge in the worth of credits needed for compliance with federal biofuel requireds, stated Zander Capozzola, vice president of sustainable fuels at AEGIS.

D4 Renewable Identification Numbers, released 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 stated.

Margins were likewise assisted by stronger need for diesel, which hit an one-year high in October, raising prices for both the conventional 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., also 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