2025 Valero Report on Guiding Principles - Flipbook - Page 72
Notes
1 See page 5 of our annual report on Form 10-K for the year
ended December 31, 2024 for more information on SAF.
2 Low-carbon fuels reduce life cycle GHG emissions. 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 these fuels were sold and veri昀椀ed by
third parties. Neat SAF’s life cycle analysis carbon intensity was
sourced from the International Civil Aviation Organization’s (ICAO)
Carbon Offsetting and Reduction Scheme for International
Aviation (CORSIA) default carbon intensities associated with
various feedstocks utilized in our neat SAF production. Our
renewable diesel can result in up to 80% lower life cycle GHG
emissions, compared with traditional diesel. Similarly, our neat
SAF can also result in up to 80% lower life cycle GHG emissions,
compared with the CORSIA baseline for traditional jet. 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 Tier 1 process safety event (PSE) rate and Tier 2 PSE rate as
de昀椀ned by the American Petroleum Institute (API) Recommended
Practice 754 – Process Safety Performance Indicators. Total
recordable incident rate or TRIR includes recordable injuries per
200,000 working hours, as de昀椀ned by the U.S. Department of
Labor’s Occupational Safety and Health Administration.
4 Number of incidents reportable to regulatory agencies
(includes application of a severity/volume enhancer to
increase the number of incidents recorded for more signi昀椀cant
environmental events).
5 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.
Average free cash 昀氀ow as a percentage of market cap for PBF
re昀氀ects years 2013 to 2024 due to its December 2012 IPO. Re昀椀ning
peer group includes PSX, MPC, DINO, and PBF. See non-GAAP
disclosures beginning on page 74.
6 Third-party scenarios and other third-party reports,
conclusions or data discussed in this report re昀氀ect the modeling,
beliefs, assumptions and outputs of their respective authors, not
Valero, and their use, reference to, or inclusion herein does not
constitute or imply 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 within this report does not constitute or imply an
endorsement by Valero of any or all of the positions or activities
of such third party.
7 ASTM D7566, Standardized Speci昀椀cation for Aviation Turbine
Fuel Containing Synthesized Hydrocarbons.
8 EV's average carbon intensity in the U.S. is calculated using
the Department of Energy publication FOTW #1374, December
23, 2024: Model Year 2024 Electric Vehicles Offer Consumers a
Wide Range in EV ef昀椀ciency; the U.S. Environmental Protection
Agency’s e-Grid 2023 for U.S. average CO 2 emissions from power
generation; and EV's life cycle analysis calculations conducted
internally by Valero.
9 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-answerscould-unlock-incentives-making
72
10 See https://www.darlingii.com/en/solutions/feed for details on
animal fat and used cooking oil
11 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
12 See LCFS Pathway Certi昀椀ed Carbon Intensities: https://ww2.arb.
ca.gov/resources/documents/lcfs-pathway-certi昀椀ed-carbonintensities , and the Certi昀椀ed Fuel Pathway Table within the page
for total pathways certi昀椀ed from January 2019 until December
2024.
13 Source: U.S. Department of Energy, agency websites, industry
consultants and Valero estimates.
14 California 2030 Transportation Fuel Goal pending Of昀椀ce of
Administrative Law approval of amendments adopted by CARB in
November 2024.
15 Refers to Carbon Offsetting and Reduction Scheme for
International Aviation or CORSIA.
16 European Union’s ReFuelEU Aviation Regulation.
17 EU Member States that will be covered by ReFuelEU Aviation.
18 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
19 See Detailed Analysis for Indirect Land Use Change from the
2015 LCFS re-adoption, p. I-25. https://ww2.arb.ca.gov/sites/default/
昀椀les/classic/fuels/lcfs/iluc_assessment/iluc_analysis.pdf
20 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.
21 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.
22 ECCC “Clean Fuel Regulations – Credit Market Data Report”
(June 2024), average approved CIs for ethanol and hydrogenationderived renewable diesel.
23 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).
24 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).
25 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 gCO 2 e/MJ when using CSA corn
feedstock and 5 gCO 2 e/MJ when using CSA soybean feedstock
(Section 4).
26 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.
27 Heller, Marc, “Fight grows over converting farmland to solar
昀椀elds,” GREENWIRE, June 3, 2024.
28 See GHG Emissions Methodologies on pages 18-19 for details
on all calculations featured in this section. For details on Valero's
2025 Short-Term Target, 2035 Medium-Term Target and 2050
Long-Term Ambition, see pages 18, 19, 70 and 71 (SASB Code EM-RM110a.2).
29 AFFFs stands for aqueous 昀椀lm-forming foams, which contain
PFAS or per-and poly-昀氀uoroalkyl substances.
30 Cal/OSHA is a program administered by the State of California
Department of Industrial Relations.
31 Re昀椀ning industry employees (U.S. Bureau of Labor Statistics,
year 2023).
