The U.S. Foreign-Trade Zones Board, operating under the U.S. Commerce Department, has approved a foreign-trade zone (FTZ) subzone for the Benicia refinery operated by Valero Refining Co. in California.
The FTZ will operate as a subzone of the Port of San Francisco’s Foreign Trade Zone No. 3. Subzones are typically areas near but not located inside an existing FTZ, so they require the FTZ Board to extend the duty-free zone to these areas individually.
Valero, based in San Antonio, Texas, said it expects the FTZ status at the Benicia refinery to improve its net operating efficiencies and costs, as well as help it to retain jobs in the area.
Securing a refinery FTZ means Valero will be in a better position to compete with imported petroleum finished-products. Valero will pay for unrefined products and then only a duty on the refined products it ships through the United States, as any products it exports from the FTZ will be duty-free in terms of U.S. collection. The FTZ status also helps Valero support more grades of crude and create a wider range of petroleum products at its Benicia refinery.
Valero owns 16 refineries in the United States, Canada, and Aruba, 10 of which operate as foreign-trade subzones. Its refineries produce products ranging from gasoline, diesel, and jet fuel to asphalt and lubricants.
The gasoline the refinery produces at the San Francisco FTZ subzone must also meet the California Air Resources Board’s standards.
Valero refinery in SF gets FTZ status
