VALERO ENERGY CORP/TX (VLO) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that VALERO ENERGY CORP/TX surfaced in its latest filing.

• DGD’s foreign feedstock supplies have recently been impacted, and could continue to be impacted, by U.S. tariffs.
• U.S.-produced renewable diesel and SAF have recently been subject to duties in several foreign jurisdictions.
• Recent changes in Mexico’s federal judiciary, hydrocarbon laws and regulations, and procedures for challenging tax authority rulings.
• Certain low-carbon projects in our Renewable Diesel segment have experienced changes in forecasted legal, regulatory, and political environments.
• Our operations in California are described in Note 2 of Notes to Consolidated Financial Statements with respect to strategic actions to optimize our asset portfolio.
• Joint ventures like DGD Plants where significant decisions require approval from the other joint venture member, including acquiring or disposing of assets above a certain dollar threshold, making certain changes to its business plan, raising debt or equity capital, and altering its distribution policy.
• Third-party equity holders of VIEs have taken actions that have affected our business, legal position, financial condition, results of operations, and liquidity.
• The current U.S. administration has taken or proposed actions to modify, rescind, invalidate, revoke, or eliminate many climate and environmental regulations.
• California’s Senate Bill No. 2 and Assembly Bill No. 1 present considerable uncertainty and risks for us.
• Mexico has implemented an informal, nationwide retail price cap on regular gasoline that could be expanded to other fuels, or could become legally binding.
• The EPA announced proposed RFS Set II rules that would impose increased RVOs for 2026 and 2027, particularly with respect to biomass-based diesel, reduce by 50 percent the number of RINs that may be generated for U.S. domestically produced renewable fuels made from foreign feedstocks, reduce the equivalency values for biomass-based diesel and renewable diesel produced through hydrogenation, and partially waive cellulosic biofuel volumes for 2025.
• In 2025, the EPA issued decisions on hundreds of SRE petitions, granting full or partial exemptions on a majority spanning RFS compliance years 2016-2024.2025
• EPA outlined a process for refineries granted SREs that had already retired RINs for compliance to have their RINs un-retired and returned.
• In September 2025, the EPA issued a supplemental notice proposing to reallocate to RFS obligated parties either 100 percent or 50 percent of the SRE exempted volumes granted for 2023 and 2024, as well as those projected for 2025.September 2025
• The OBBB restricts eligibility for the clean fuel production credit for fuel produced on or after January 1, 2026 to fuels derived exclusively from feedstock produced or grown in the U.S., Mexico, or Canada.January 1, 2026
• In June 2025, California approved an amendment to the LCFS seeking to reduce the CI of California’s transportation fuel pool by 30 percent by 2030 and by 90 percent by 2045, and imposing a cap on the issuance of credits for biomass-based diesel produced from soybean, canola, or sunflower oil.June 2025
• Certain Canadian provinces have imposed requirements under their low-carbon fuels standards that limit the amount of imported ethanol and renewable diesel that can be claimed under the programs.
• Effective January 1, 2025, the U.K. imposed additional feedstock and reporting requirements impacting SAF compared to the “Refuel EU” requirements.January 1, 2025
• We have been named as a co-defendant in a lawsuit in state court by a county in Oregon seeking significant damages and abatement under various tort theories (including deceptive disclosures).
• We have been named as a co-defendant in a federal class-action lawsuit in California alleging antitrust and consumer protection claims related to costs of complying with the LCFS.
• The states of New York and Vermont have enacted legislation establishing cost recovery programs under which 'responsible parties,' deemed to include refiners and other fossil fuel companies, bear costs on a strict liability basis.
• California adopted climate-related disclosure obligations in October 2023, including GHG emissions, climate-related financial-risk reporting, and statements regarding GHG emissions reductions and carbon offsets.October 2023
• New York recently adopted GHG reporting requirements that require extremely burdensome and detailed disclosures, including the quantity and type of fuel and feedstock related to emissions.
• The U.K. has adopted and the EU has provisionally adopted burdensome disclosures related to environmental, climate, social, supply chain, human rights, and other sustainability-related matters, including the EU's Corporate Sustainability Reporting Directive and Corporate Sustainability Due Diligence Directive.
• California’s Oil Refinery Cost Disclosure Act (SB 1322) requires refineries in California to report monthly on crude oil volume and cost, wholesale gasoline quantity and price, and gross gasoline margin per barrel.
• In September 2025, the EPA proposed to effectively cease its Greenhouse Gas Reporting Program.September 2025
• The OBBB contains significant changes to U.S. tax law.
• Colonial Pipeline cybersecurity incident in May 2021.May 2021
• Directive issued by the U.S. Transportation Security Administration following the Colonial Pipeline cybersecurity incident.
• U.S. Cyber Incident Reporting for Critical Infrastructure Act.
• We are subject to the EU General Data Protection Regulation.
• We are subject to the U.K. Data Protection Act 2018.
• We are subject to Quebec’s Bill 64.
• We are subject to the California Consumer Privacy Act, as amended by the California Privacy Rights Act.
• The U.S. Federal Trade Commission has adopted rules requiring the reporting of certain data breaches.
• Certain employees at five U.S. refineries, the Canada and U.K. refineries, and the Montreal terminal are covered by collective bargaining or similar agreements with unique and independent expiration dates.
• Past strikes, lockouts, work stoppages, or other labor actions or disruptions have occurred for certain periods.