2024 ESG Report FINAL - Report - Page 78
Notes
1 For details on Valero's 2025 and 2035 GHG emissions targets see
pages 19, 21 and 77 (SASB Code EM-RM-110a.2).
2 Low-carbon fuels reduce life cycle GHG emissions. For renewable
diesel, life cycle GHG emissions reductions depend on the life
cycle analysis methodology or pathway used, carbon intensity of
the feedstocks, and energy intensity in the supply chain, such as
feedstock gathering mileage or distribution mileage of 昀椀nished
product. Renewable diesel's life cycle analysis carbon intensity was
calculated using methodologies approved by the jurisdictions where
renewable diesel was sold and veri昀椀ed by third parties. Our renewable
diesel can result in up to 80% lower life cycle GHG emissions,
compared with traditional diesel. In the case of corn ethanol, life
cycle GHG emissions reductions could be impacted by the type of
feedstocks used, the energy intensity in the supply chain or whether
carbon capture and storage is utilized. Ethanol's life cycle analysis
carbon intensity was sourced from the Argonne National Laboratory
GREET model. When compared with the benchmark carbon intensity
of gasoline presented in this model, our ethanol can result in at least
30% lower life cycle GHG emissions.
3 Free cash 昀氀ow is de昀椀ned as net cash provided by operating
activities less capital expenditures of VLO and DGD, deferred
turnaround and catalyst cost expenditures, investments in joint
ventures, and changes in current assets and liabilities. Average free
cash 昀氀ow re昀氀ects 2012 through the most recent annual 昀椀ling. EBITDA
is net income (loss) before depreciation and amortization expense,
“interest and debt expense, net of capitalized interest”, income tax
expense (bene昀椀t), and income (loss) from discontinued operations.
Re昀椀ning peer group includes PSX, MPC, DINO, and PBF. See page 80 for
non-GAAP disclosures.
4 Third-party scenarios and other third-party reports or data
discussed in these reports re昀氀ect the modeling, beliefs, assumptions
and outputs of their respective authors, not Valero, and their use,
reference to, or inclusion herein is not an endorsement by Valero of
their underlying assumptions, likelihood or probability. Any reference
to Valero's support of, alignment with, work with, or collaboration with
a third-party organization within this document does not constitute
or imply an endorsement by Valero of any or all of the positions or
activities of such organization.
5 Intergovernmental Panel of Climate Change (IPCC) (2022), Climate
Change 2022: Mitigation of Climate Change. Contribution of Working
Group III to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al
Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas,
R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz, J. Malley, (eds.)].
Cambridge University Press, Cambridge, UK and New York, NY, USA. doi:
10.1017/9781009157926.
6 International Energy Agency (IEA) (2022), World Energy Outlook
2022, IEA, Paris https://www.iea.org/reports/world-energyoutlook-2022, License: CC BY 4.0 (report); CC BY NC SA 4.0 (Annex A).
7 The COP28 agreement, available at: https://unfccc.int/sites/
default/昀椀les/resource/cma2023_L17_adv.pdf at paragraph 28.
8 See https://unric.org/en/climate-highlights-of-cop28/ and https://
unfccc.int/sites/default/昀椀les/resource/cma2023_L17_adv.pdf at
paragraph 29.
9 The U.S. Department of Energy’s Pathways to Commercial Liftoff:
Chemicals & Re昀椀ning, available at: https://liftoff.energy.gov/wpcontent/uploads/2023/09/20230921-Pathways-to-CommercialLiftoff-Chemicals-Re昀椀ning.pdf.
10 Consumer Reports, How Much Do Cold Temperatures Affect
an Electric Vehicle’s Driving Range? (January 2024): https://www.
consumerreports.org/cars/hybrids-evs/how-much-do-coldtemperatures-affect-an-evs-driving-range-a5751769461/.
11 Consumer Reports, CR Tests Show Electric Car Range Can Fall
Far Short of Claims, January 2024: https://www.consumerreports.
org/cars/hybrids-evs/how-temperature-affects-electric-vehiclerange-a4873569949/.
78
12 EV charging in cold temperatures could pose challenges
for drivers, Idaho National Laboratory, June 2020:https://inl.
govintegrated-energy/electric-vehicles/.
13 ASTM D7566 -21, Standard Speci昀椀cation for Aviation Turbine
Fuel Containing Synthesized Hydrocarbons, approved July 1, 2021,
published July 2021.
14 EV's average carbon intensity in the U.S. is calculated using the
U.S. Department of Energy, Of昀椀ce of Energy Ef昀椀ciency and Renewable
Energy, Vehicle Technologies Of昀椀ce, FOTW #1208, Oct 18, 2021; and
other EV's life cycle analysis calculations conducted internally by
Valero.
15 Is it starch or cellulose? National Renewable Energy Laboratory
(NREL) offers answers that could unlock incentives for making
cellulosic ethanol (June 16, 2021) https://www.energy.gov/eere/
bioenergy/articles/it-starch-or-cellulose-nrel-offers-answers-couldunlock-incentives-making.
16 See https://www.darlingii.com/media for details on restaurants
that provide used cooking oil.
17 California Air Resources Board, September 28, 2023, Then vs Now –
Fossil Fuels Used in CA, slide 20. https://ww2.arb.ca.gov/sites/default/
昀椀les/barcu/board/books/2023/092823/23-8-1pres.pdf.
18 See LCFS Pathway Certi昀椀ed Carbon Intensities: https://ww2.arb.
ca.gov/resources/documents/lcfs-pathway-certi昀椀ed-carbonintensities.
19 Source: U.S. Department of Energy, agency websites, industry
consultants and Valero estimates.
20 EPA Summary table of Lifecycle Greenhouse Gas Emissions
for Select Pathways (pdf), https://www.epa.gov/sites/default/
昀椀les/2016-07/documents/select-ghg-results-table-v1.pdf
21 See Detailed Analysis for Indirect Land Use Change from the 2015
LCFS re-adoption, p. I-25. https://ww2.arb.ca.gov/sites/default/files/
classic/fuels/lcfs/iluc_assessment/iluc_analysis.pdf
22 EPA “Summary Lifecycle Analysis Greenhouse Gas Results for the
U.S. Renewable Fuels Standard Program” (May 2023), disaggregated
GHG emissions for corn starch ethanol (dry mill, natural gas, 2022
average) and soybean oil transesteri昀椀ed biodiesel.
23 CARB “Current Fuel Pathways” (July 2, 2024), average of current
(non-retired) certi昀椀ed CIs for corn ethanol and soybean oil renewable
diesel.
24 ECCC “Clean Fuel Regulations – Credit Market Data Report” (June
2024), average approved CIs for ethanol and hydrogenation-derived
renewable diesel.
25 ECCC “Fuel Life Cycle Assessment Model Methodology” (June
2024). Indirect land use change is “excluded from the Model Database
due to … [its] negligible contribution or limitations such as lack of data,
methods or high uncertainty.” (Section 2.3.1)
26 Argonne National Laboratory “Development of R&D GREET 2023
Rev1 to Estimate Greenhouse Gas Emissions of Sustainable Aviation
Fuels for 40B Provision of the In昀氀ation Reduction Act” (April 2024), LCA
results using default parameters for corn ATJ-E and soybean HEFA
(Table 1).
27 Treasury Notice 2024-37, “Sustainable Aviation Fuel Credit;
Lifecycle Greenhouse Gas Emissions Reduction Percentage and
Certi昀椀cation of Requirements Related to the Clean Air Act; Climate
Smart Agriculture; Safe Harbors.” Safe harbor for Climate Smart
Agriculture (CSA) CI reduction of 10 gCO2e/MJ when using CSA corn
feedstock and 5 gCO2e/MJ when using CSA soybean feedstock
(Section 4).
28 ICAO “CORSIA Default Life Cycle Emissions Values for CORSIA
Eligible Fuels” (June 2022), default pathways for ETJ-SAF produced
from U.S. corn grain and HEFA-SAF produced from U.S. soybean oil.
