Texas fuels business Valero Energy Corporation looks likely to shut down its Benicia refinery in California by the end of April 2026, in a move that could impact the merchant carbon dioxide market in the state.
It has submitted notice to the California Energy Commission of its current intent to idle, restructure, or cease refining operations at the site
gasworld understands that industrial gas major Linde has a 200 tonnes per day CO2 plant in the same location. The facility is believed to source feedstock CO2 from nearby refining operations – including the Benicia refinery.
Refineries like Benicia play an important role in supplying CO2. Instead of letting the CO₂ produced during refining go to waste, it’s captured and put to use in industries such as food and beverage, healthcare, and manufacturing.
Lane Riggs, Chairman, CEO and President of Valero, said, “We understand the impact that this may have on our employees, business partners, and community and will continue to work with them through this period.”
The Benicia refinery produces 170,000 barrels of fuel product a day, including jet fuel, gasoline, and diesel. It also generates around 50 megawatts of power from its cogeneration unit.
If the closure goes ahead, it could not only remove fuel and power from the market but also cut CO2 supply.
In a recent gasworld webinar, Bruce Woerner of Woerner CO2 Consulting said that California was already about to become a high-risk region for a potential CO2 shortage in the US.
He pointed to tightening market conditions on the US West Coast this year, citing ethanol plant losses and the upcoming closure of the Phillips 66 refinery in Los Angeles, which currently supplies around 500 tonnes per day of CO2.
“[This closure] will impact almost 500 tonnes a day of CO2 in a market that’s already very tight,” Woerner explained. “[That makes California] ground zero for what could be a potential looming problem.”
However, with the potential shutdown of the Valero refinery, another critical source of CO₂ could disappear from California’s merchant supply, adding further pressure.
