Diamond Green Diesel’s 4th-quarter operating income down 68%
In its financials released Jan. 25, Valero Energy reported $84 million in operating income during the fourth quarter of 2023 for its renewable diesel segment, which consists of the Diamond Green Diesel joint venture with Darling Ingredients.
Operating income for the fourth quarter of 2022 was $261 million.
This represents a 68 percent decrease compared to the same three-month period the year prior.
According to Valero, the significant decrease in operating income was due to lower renewable diesel margins in the fourth quarter of 2023.
Renewable diesel sales volumes averaged 3.8 million gallons per day in the fourth quarter of 2023, which was 1.3 million gallons per day higher than the fourth quarter of 2022.
The higher sales volumes were due to additional renewable diesel production from Diamond Green Diesel’s new plant in Port Arthur, Texas, which came online in the fourth quarter of 2022.
Valero also provided an update on the sustainable aviation fuel (SAF) project at the Port Arthur plant, which was approved in early 2023.
The SAF project remains on schedule, according to Valero, with completion expected in the first quarter of 2025.
Total cost for the project is slated to be $315 million.
The project will give the plant the option to upgrade approximately 50 percent of its current annual renewable diesel production capacity of 470 million gallons per year to SAF.
With the completion of this project, Valero said Diamond Green Diesel is expected to become one of the largest manufacturers of SAF in the world.
“Our discipline on growth through return-driven investments in our core refining and low-carbon fuels businesses should continue to strengthen our competitive advantage and drive long-term shareholder returns,” said Lane Riggs, Valero’s president and CEO.
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