Valero Energy Corp. released first quarter financial results on April 22, reporting improved results for its ethanol operations and record operating income for its renewablediesel segment. The company also discussed plans for a carbon capture and storage (CCS) project linked to eight of its ethanol plants.

Valero’s ethanol segment reported a $56 million operating loss for the first quarter, compared to a $197 million operating loss reported for the same period of 2020. The operating loss for the first quarter of 2021 includes estimated excess energy costs of $54 million related to the impacts from Winter Storm Uri.

Ethanol production volumes averaged 3.6 million gallons per day for the first quarter of 2021. Down 541,000 gallons per day when compared to the first quarter of 2021. Moving into the second quarter, Valero Vice President of Investor Relations Homer Bhullar said Valero’s ethanol segment is expected to produce 4.2 million gallons per day with operating expenses expected to average 38 cents per gallon.

Joe Gorder, chairman and CEO of Valero, discussed the company’s March 2021 announcement that it is partnering with BlackRock and Navigator to develop a carbon CCS system in the Midwest that would allow carbon dioxide captured at eight Valero ethanol plants to be sequestered underground. In addition to creating benefits through the 45Q tax credit, Gorder said the project will allow Valero to capture higher value for the resulting lower-carbon ethanol in certain markets, such as California’s Low Carbon Fuel Standard market. He said the CCS system is expected to be capable of storing 5 million metric tons of carbon dioxide per year.

Valero’s renewable diesel segment, which consists of the Diamond Green Diesel joint venture, reported $203 million in operating income for the first quarter, up from $198 million during the same period of last year. Renewable diesel sales volumes averaged 867,000 gallons per day during the three-month period. Gorder said the segment continues to provide solid earnings and set records for operating income and renewable diesel product margin during the first quarter.

According to Gorder, the expansion project at the existing DGD plant in Louisiana remains on budget and is expected to be operational by the fourth quarter of this year. The project is expected to increase renewable diesel production capacity at the site by 400 million gallons per year, bringing the total capacity of the plant to 690 million gallons per year.

Development of the DGD plant under development in Port Arthur, Texas, is also continuing to move forward, Gorder said. That 470 MMgy facility is expected to be operational during the second half of 2023. The project will boost DGD’s annual capacity to 1.2 billion gallons of renewable diesel and 50 million gallons of renewable naphtha.

Overall, Valero reported a net loss attributable to Valero stockholders of $704 million, or $1.73 per share, for the first quarter, compared to a net loss of $1.9 billion, or $4.54 per share, for the same period of 2020.