mission-newenergy-limited

1 US Biofuel Producers Increase in Oct As Profitability Improved,

Renewable diesel producers utilization at 77%, highest because July - AEGIS

Biodiesel manufacturers usage rate struck 89% in Oct, highest considering that June 2023

Better credit rates, stronger diesel demand stimulated higher activity - analyst

NEW YORK CITY, Jan 3 (Reuters) - U.S. renewable diesel and biodiesel producers increase operations in October to multi-month highs, assisted by stronger margins for the biofuels, according to data put together by advisory group AEGIS Hedging.

Renewable diesel manufacturers made use of 77% of their total operable capability in October, the greatest because July 2024, the information showed. Biodiesel plant usage increased to 89%, the greatest since 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 demand development slowed, leaving the marketplace oversupplied and forcing a number of biodiesel plant closures.

Both sustainable diesel and biodiesel are more expensive to produce than diesel, making providers dependent on government rewards such as tax credits. Among the 2, renewable diesel has actually emerged as the preferred fuel for providers, as it reaps much better incentives and can substitute diesel totally.

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 increased nearly 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as many brand-new biofuel plants opened in the past 3 years were geared towards it.

Still, oversupply pressed eco-friendly diesel output capacity 6% lower in October from a record 4.90 billion gallons in June.

In addition to plant closures, profitability for the industry in October was improved mainly by a surge in the worth of credits required for compliance with federal biofuel mandates, stated Zander Capozzola, vice president of eco-friendly fuels at AEGIS.

D4 Renewable Identification Numbers, provided for biodiesel and renewable diesel production, increased from a low of 56 cents each in September to over 71 cents in October, enhancing profitability for making the fuels, Capozzola said.

Margins were also assisted by more powerful demand for diesel, which hit a 1 year high in October, raising prices for both the conventional fuel and its options, he said.

Prices for credits under the Low Carbon program of California, where most biofuels are consumed in the U.S., likewise rose from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.

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