Valero Energy (VLO) Risk Factor Changes

Certain employees at five of our U.S.

We are subject to various hazards and other incidents common to the industry, including explosions, fires, toxic emissions, transportation hazards, severe weather events, and natural disasters/acts of nature (includin…

Our ability to obtain credit and capital depends in large measure on capital markets and liquidity factors that we do not control.

Along with our own data and information in the normal course of our business, we collect and retain certain data that is subject to specific laws and regulations.

Data privacy and security issues expose us to increased liability and operational changes and costs.

customer, supplier, or investor confidence; and (vii) damage to our business and competitiveness.

Our information systems and network infrastructure have been and continue to be subject to frequent unauthorized access attempts and other cyber attacks, including ransom-related incidents, which could result in incre…

We are subject to extensive tax liabilities imposed by multiple jurisdictions, including income taxes; indirect taxes (e.g., excise, duty, sales, use, gross receipts, and value-added taxes); and payroll, franchise, wi…

and regulations, or have launched investigations and requested information, based on pricing practices in the fossil fuel industry, which we have been and may again be subject to.

The states of New York and Vermont have also enacted legislation establishing various cost recovery programs designed to upgrade infrastructure and fund community initiatives they designate as purported climate mitiga…

We could face increased climate‐related litigation with respect to our operations, disclosures, or products.

Because environmental, health, and safety laws and regulations have become more complex and stringent and new or revised laws and regulations are continuously being enacted or proposed, and are being interpreted and a…

The Renewable and Low-Carbon Fuel Programs and the U.S.

We are also exposed to the volatility in the market price of RINs, LCFS credits, and other credits, as described in Note 20 of Notes to Consolidated Financial Statements.

regulation, or policy, as noted above, and it is not currently possible to predict the ultimate effects thereof on us.

Certain U.S.

We are subject to risks arising from legal, regulatory, and political developments regarding climate- and environmental-related matters, or that are adverse to or restrict refining and marketing operations.

The methodologies, standards, and requirements for tracking and reporting many climate- and other sustainability-related matters, such as GHG emissions, have not been standardized or harmonized, and many continue to e…

We are subject to risks arising from climate- and other sustainability-related advocacy and pressure.

A reduction in the demand for our products could result from events and trends such as increases in fuel efficiency, decreases in travel or fuel consumption levels, and a transition by consumers to alternative fuel ve…

Our investments in joint ventures and other entities limit our ability to manage risk.

We engage in capital and other strategic projects based on many factors, including the forecasted project economics; legal, regulatory, and political environments; the expected return on the capital to be deployed; an…

The refining and marketing industry is highly competitive with respect to both feedstock supply and refined petroleum product markets.

In addition to our own logistics assets, we use the services of third parties to transport feedstocks to our refineries and plants and to transport our products to market.

We have operations and business activities, including marketing activities, outside of the U.S., particularly in Canada, the U.K., Ireland, Mexico, and Peru, and are subject to disruptions and developments in or other…

We are subject to risks arising from our operations and business activities outside of the U.S.

Our Ethanol segment relies on corn sourced from local farmers and commercial elevators in the Mid-Continent region of the U.S.

We source our petroleum-based and low-carbon fuel feedstocks, as well as many other critical supplies, such as catalyst, chemicals, treating materials, and metal-based consumables, from suppliers throughout the world.

The availability and prices of our feedstocks and other critical supplies expose us to risks.

For example, the real-time market structure of the largest grid operator in Texas exposes many of our refineries and operations located in Texas to “scarcity pricing” during periods of supply and demand imbalance.

We are subject to risks arising from the availability and prices of natural gas, electricity, and water.

Many of these factors are interrelated, beyond our control, can vary globally and regionally, and may change quickly, adding to market volatility, while others may have longer-term effects that are uncertain.

Our financial results are affected by the margin (i.e., the difference) between our product prices and the prices for crude oil, corn, and other feedstocks that we purchase, which can vary greatly based on global and…

Our financial results are affected by volatile margins, which are dependent upon factors beyond our control, including the prices we pay to acquire feedstocks and the market prices at which we can sell our products.

BUSINESS, INDUSTRY, AND OPERATIONS RISKS

Our ability to adequately insure losses or liabilities arising from various hazards exposes us to risks.

Our business may be negatively affected by work stoppages, slowdowns, or strikes, as well as by new legislation or an inability to attract and retain sufficient labor, and increased costs related thereto.

Severe weather events, such as storms, hurricanes, droughts, wildfires, and floods, can impact the supply of, or increase our costs to obtain, feedstocks and other critical supplies (including water), and disrupt our…

We are subject to risks arising from severe weather events.

In addition to voluntary disclosures in response to investor and stakeholder requests, many governments have also proposed or adopted regulations that impose disclosure obligations with respect to various climate-rela…

Governments and private parties are also increasingly filing lawsuits or initiating regulatory action based on allegations that certain public statements and disclosures by companies regarding climate-related matters…

future.

As described under “ITEMS 1.

Government authorities across the world have also announced, imposed, or are considering, taxes or penalties on fossil fuel companies for profits or windfalls, or margins above a certain level, carbon border adjustmen…

Moreover, there have been various international climate accords and multilateral agreements aimed at reducing GHG emissions.

In addition to these U.S.

The current U.S.

The U.S.

and other U.S.

Many government authorities across the world have imposed, and may impose in the future, laws, regulations, and policies designed to facilitate less petroleum-dependent modes of transportation (e.g., increases in fuel…

instances, this has resulted in, and could again result in, the cancellation or restructuring of projects and costs and charges related thereto.

In addition, challenges to or opposition of fossil fuel infrastructure projects continue to make the approval and completion of such projects more difficult and costly.

Large capital and other strategic projects can take many years to complete, and the legal regulatory, and political environments or other market conditions may change or deteriorate over time.

Competitors that produce their own supply of feedstocks, own their own retail sites, operate in different regions, or have greater financial resources may have a competitive advantage.

exposure to political, geographic, regulatory, tax, and economic risks associated with international sourcing of supplies.

Although the other joint venture member in DGD supplies some of DGD’s waste feedstock at competitive pricing, DGD must still secure a significant amount of its waste and renewable feedstock requirements from other sou…

government regulations and opposition to pipeline construction and electricity generation and transmission projects have also resulted in, and could continue to result in, the underinvestment in, or unavailability of,…

to face, increasing pressure regarding our efforts and disclosures with respect to GHG emissions reductions/displacements (including our methodologies and timelines with respect thereto) and other sustainability-relat…

These activities have also contributed to increasing societal, investor, and legislative focus and pressure on additional actions and disclosures related to, among others, climate-related matters, GHG emissions and re…

In recent years, a number of advocacy groups, both in the U.S.

We are exposed to risks arising from various labor-related matters.

We do not maintain insurance coverage that fully protects against all potential losses and liabilities.

In addition to voluntary disclosures in response to investor and stakeholder requests discussed above, many governments have also proposed or adopted regulations that impose disclosure obligations with respect to vari…

claims related to costs of complying with the LCFS.

thereunder, or under voluntary certifications.

exclusively from feedstock that was produced or grown in the U.S., Mexico, or Canada, and important guidance with respect to certain aspects of such credits has yet to be finalized.

The risks and uncertainties with respect to the final RFS Set II rules are also interrelated with and compounded by U.S.

Regarding the RFS, in June 2025, the EPA announced proposed rules (RFS Set II) that would, among other things, impose increased RVOs for 2026 and 2027, particularly with respect to biomass-based diesel, while also pro…

As described under “ITEMS 1.

Many of these matters and developments are subject to considerable uncertainty due to a number of factors, including technological and economic feasibility, legal challenges, and changes in law,

Certain government authorities across the world have, in recent years, imposed, announced, or considered various laws, regulations, policies, and actions designed to facilitate less petroleum-dependent modes of transp…

In recent years, a number of climate- and other sustainability-related advocacy groups, both in the U.S.

market penetration of alternative fuel vehicles or otherwise decrease the demand for our products.

We also regularly assess our facilities and operations in light of market dynamics and the regulatory environment and have taken, and may in the future take, strategic actions to optimize our portfolio of assets, incl…

costs and charges related thereto, a decreased market outlook, and/or impacts under our capital allocation framework.

In addition, challenges to or opposition of certain fossil fuel and infrastructure projects (including pipelines), as well as certain low-carbon projects (such as carbon sequestration and carbon capture and storage),…

Our pursuit of capital and other strategic projects and actions exposes us to various risks.

Differences in competitors’ businesses or resources may at times provide them a competitive advantage.

it could have a material adverse effect on our business, financial condition, results of operations, and liquidity.

imports into the U.S.

The U.S.

expected to result in, additional capital expenditures and/or ongoing costs.

Our operations depend on the reliable supply of natural gas, electricity, and water.

and other countries.