2026 Valero Report on Guiding Principles - Report - Page 12
Indirect GHG emissions from the consumption of
energy and steam purchased by the organization
for its use (Scope 2): To calculate Scope 2 emissions,
we follow the guidance from two approaches in the
GHG Protocol: market-based and location-based. We
calculate Scope 2 for our three segments: re昀椀ning,
ethanol and renewable diesel.
Scope 1 Intensity: To calculate the GHG emissions
from the re昀椀ning process per unit of throughput, we
divide the global re昀椀nery Scope 1 emissions in million
metric tons CO2e (as described above) by thousand
barrels of oil equivalent (BOE). In the past we have
compared our Scope 1 intensity with the re昀椀ning
peer group, including PSX, MPC, DINO and PBF. Since
2019, relative to peers' performance, Valero's Scope 1
intensity was the lowest of the peer group. However,
our peers are no longer disclosing their Scope 1
emissions with ample time to conduct a veri昀椀cation
by a third-party independent assessor prior to the
publishing of this report.
Displacements: This represents the tonnage
reduction of GHG emissions equivalent (CO2e) that
result from the substitution of petroleum fuels with
the production of, blending of, and credits from lowcarbon fuels, including, but not limited to, products
that we currently produce or are expected to produce
as part of our publicly available GHG emissions target
(such as ethanol, cellulosic ethanol, renewable diesel,
renewable naphtha, renewable propane, and SPK or
neat SAF), as well as low-carbon fuels and credits we
procure. This calculation is based on a comparison of
low-carbon fuels LCA and the fossil fuel benchmark
LCA, which could vary depending on the product and/
or the jurisdiction.
For our production of renewable diesel, the
carbon intensity (CI) estimations are based on the
market-based CI assigned to the product from the
veri昀椀cations and audits from jurisdictions where
renewable diesel production was sold. On neat
SAF, the CI calculations are based on the Carbon
Offsetting and Reduction Scheme for International
Aviation (CORSIA) from the International Civil Aviation
Organization (ICAO). In the case of our production of
ethanol, the CI estimations are based on the Argonne
National Laboratory GREET3.0 2021 model. Regarding
the CI estimations for ethanol and biodiesel that
we procured, including credits, to ful昀椀ll our blending
obligations, we used the Argonne National Laboratory
GREET3.0 2021 (ethanol) and 2019 (biodiesel) models,
as well as published papers. When calculating the
displacements from blending and to avoid double
counting, our low-carbon fuel production that
contributes to our blending obligation is excluded.
In accordance with the Sustainability Accounting
Standards Board's (SASB) Standards Application
Guidance 3.0 Reporting Boundaries, as the operator
of the consolidated entity, displacements include
the entire production of renewable diesel, renewable
naphtha, renewable propane, and SPK or neat SAF of
the consolidated entities that we operate.
Independent Assessment of our Re昀椀ning Strategy
Under multiple carbon-constrained scenarios, independent assessments have
found Valero's overall re昀椀ning portfolio to be resilient.
Responding to the requests of certain stakeholders regarding independent assessments of the resilience of
our strategy under hypothetical oil and biofuel demand scenarios, we have issued three reports following the
recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and using multiple demand
scenarios. Our 昀椀rst TCFD report, the Review of Climate-related Risks and Opportunities, was published in September
2018. At that time, we engaged HSB Solomon Associates (Solomon), a leading re昀椀ning benchmarking data provider
and advisory 昀椀rm, to conduct an independent analysis under multiple demand scenarios, including the potential
transition to a lower-carbon economy consistent with one of the International Energy Agency's (IEA) 2°C scenarios.
In the 2021 TCFD Report and Scenario Analysis, Solomon examined our re昀椀ning business and reviewed the resilience
of our strategy under the IEA’s Sustainable Development Scenario (SDS), referred to as a well-below 2°C scenario.
And in the 2022 TCFD Report, Solomon conducted an independent scenario analysis based on the assumptions of
the IEA Net Zero by 2050 Scenario, as applied by Solomon. The assessments in such reports found Valero’s overall
re昀椀ning portfolio to be resilient.17
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