Valero Energy Corp. released second quarter financial results on July 29, reporting improved earnings for both its ethanol and renewable diesel business segments. Ethanol production volumes and renewable diesel sales volumes were both up for the quarter.

Valero’s ethanol segment reported $99 million of operating income for the second quarter, up from $91 million during the same period of last year. Ethanol production volumes averaged 4.2 million gallons per day, up 1.9 million gallons per day when compared to the second quarter of 2020.

During an earnings call, Joe Gorder, chairman and CEO of Valero, said the ethanol segment performed well during the second quarter as demand for ethanol increased. He also noted that the carbon sequestration project with BlackRock and Navigator is moving ahead. Valero is expected to be the anchor shipper, he said, with eight plants connected to the proposed carbon capture and sequestration (CCS) system. The project is expected to lower the carbon intensity of Valero’s ethanol products while also providing solid economic returns, Gorder said.

The renewable diesel segment, which consists of the Diamond Green Diesel joint venture, reported $248 million of operating income for the second quarter, up from $129 million reported for the same period of last year. Renewable diesel sales volumes averaged 923,000 gallons per day, up 128,000 gallons per day when compared to the second quarter of 2020.

“Our renewable diesel segment continues to perform exceptionally well,” said Gorder. “The segment once again set records for renewable diesel operating income and sales volumes, highlighting DGD’s ability to process a wide range of discounted feedstocks, combined with Valero’s operational and technical expertise.”

According to Gorder, the expansion project at Diamond Green Diesel’s St. Charles facility in Norco, Louisiana, is on budget and is scheduled to be operational in the fourth quarter of this year. The project will boost renewable diesel production capacity by 400 MMgy, bringing the total capacity of the St. Charles facility to 690 MMgy of renewable diesel and 30 MMgy of renewable naphtha. Work is also continuing on the Diamond Green Diesel facility in Port Arthur, Texas, he said, with the 470 MMgy facility scheduled to be operational in the first half of 2023. Once fully operational, the two facilities are expected to have a combined renewable diesel capacity of 1.2 billion gallons, along with 50 MMgy of renewable naphtha.

Moving into the remainder of the year, Homer Bhullar, vice president of investor relations and finance at Valero, said Valero’s ethanol segment is expected to produce 3.7 million gallons per day in the third quarter with an operating expense averaging 43 cents per gallon. Sales volumes for the renewable diesel segment are expected to average 1 million barrels per day for the full year 2021, with operating expenses at 50 cents per gallon.

Overall, Valero reported net income attributable to Valero stockholders of $162 million, or 39 cents per share, for the second quarter, compared to $1.3 billion, or $3.07 per share, during the same period of last year.