Valero reports strong Q2 for renewable fuels
July 27, 2023
BY Erin Krueger
Valero Energy Corp. released second quarter financial results on July 27, reporting improved operating income for both its renewable diesel and ethanol business segments. The company also said its sustainable aviation fuel (SAF) project is progressing on schedule.
Valero’s ethanol segment reported $127 million in operating income for the second quarter, up from $101 million reported for the same period of last year. Ethanol production volumes reached 4.4 million gallons per day, up 582,000 gallons per day when compared to the second quarter of 2022. Homer Bhullar, vice president of investor relations at Valero, said ethanol production volumes are expected to be maintained at 4.4 million gallons per day in the third quarter.
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Valero’s renewable diesel segment consists of the Diamond Green Diesel joint venture, developed in partnership with Darling Ingredients Inc. The segment reported $440 million in operating profit for the second quarter, up from $152 million during the same period of last year. Segment sales volumes averaged 4.4 million gallons per day, double the 2.2 million gallons per day produced during the second quarter of 2022. Valero attributed the higher sales volumes to the impact of additional volumes from the startup of the DGD Port Arthur plant during the fourth quarter of 2022. Bhullar said renewable diesel sales for the full year are expected to reach approximately 1.2 billion gallons.
Lane Riggs, president and CEO of Valero, said DGD’s SAF project at Port Arthur is progressing on schedule. The project aims to upgrade 50 percent of the current 470 million gallons of annual renewable diesel production capacity to SAF production. According to Riggs, the project is expected to be complete in 2025. “With the completion of this project, DGD is expected to become one of the largest manufacturers of SAF in the world,” he said.
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Overall, Valero reported second quarter net income attributable to shareholders of $1.9 billion, or $5.40 per share, compared to $4.7 billion, or $11.57 per share, during the same period of last year.
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