
Mission Biotechnologies Sdn. Bhd
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US Biofuel Producers Ramped up in Oct As Profitability Improved,
Renewable diesel producers usage at 77%, greatest because July – AEGIS
Biodiesel manufacturers utilization rate struck 89% in Oct, greatest because June 2023
Better credit prices, more powerful diesel need stimulated greater activity – analyst
NEW YORK CITY, Jan 3 (Reuters) – U.S. renewable diesel and biodiesel producers 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 producers utilized 77% of their total operable capacity in October, the greatest since July 2024, the information showed. Biodiesel plant usage increased to 89%, the greatest because June 2023.
Rising usage rates and enhancing margins are a welcome relief for the biofuels industry, after operators withstood a to 2024 as need growth slowed, leaving the marketplace oversupplied and requiring a variety of biodiesel plant closures.
Both sustainable diesel and biodiesel are more pricey to produce than diesel, making providers dependent on government incentives such as tax credits. Among the 2, eco-friendly diesel has become the favored fuel for suppliers, as it gains better incentives and can substitute diesel completely.
Total biodiesel production capability fell 4.2% year-over-year to about 2 billion gallons in October, according to data released by the U.S. Energy Information Administration on Tuesday.
Renewable diesel output capability rose almost 19% year-over-year to 4.58 billion gallons in October, the EIA information showed, as most brand-new biofuel plants opened in the previous 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 enhanced mainly by a rise in the worth of credits needed for compliance with federal biofuel requireds, said Zander Capozzola, vice president of eco-friendly fuels at AEGIS.
D4 Renewable Identification Numbers, provided for biodiesel and renewable 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 also helped by more powerful demand for diesel, which hit a 1 year high in October, raising prices for both the traditional 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., likewise rose from below 60 cents each in Sept to over 70 cents each in October, according to AEGIS.
“You actually had whatever rowing in the best instructions in October,” Capozzola stated. (Reporting by Shariq Khan in New York City; Editing by David Gregorio)