Good day, everyone, and welcome to today's Clean Energy Fuels Fourth Quarter 2024 Earnings Conference Call. Please note, today's call will be recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Chief Financial Officer, Robert Vreeland. Please go ahead.

Thank you, operator. Earlier this afternoon, Clean Energy released financial results for the fourth quarter and year ending December 31, 2024. If you did not receive the release, it is available on the Investor Relations section of the company's website at www.cleanenergyfuels.com, where the call is also being webcast. There will be a replay available on the website for 30 days. Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict. Such forward-looking statements are not a guarantee of performance and the company's actual results could differ materially from those contained in such statements. Several factors that could cause or contribute to such differences are described in detail in the Risk Factors section of Clean Energy's Form 10-K that we are filing today. These forward-looking statements speak only as of the date of this release. The company undertakes no obligation to publicly update any forward-looking statements or supply new information regarding the circumstances after the date of this release. The company's non-GAAP EPS and adjusted EBITDA will be reviewed on this call and excludes certain expenses that the company's management does not believe are indicative of the company's core business operating results. Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for or superior to GAAP results. The directly comparable GAAP information, reasons why management uses non-GAAP information, the definition of non-GAAP EPS and adjusted EBITDA, and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release, which has been furnished to the SEC on Form 8-K today. With that, I will turn the call over to our President and Chief Executive Officer, Andrew Littlefair.

Thank you, Bob. I'm pleased to report that we closed the fourth quarter and the year with strong results. In the fourth quarter, we sold 62 million gallons of renewable natural gas, a 9% increase from a year ago, and generated $109 million in revenue and $24 million of adjusted EBITDA. For the full year 2024, we sold 237 million gallons of RNG, an increase of almost 5% over 2023, and reported $77 million of adjusted EBITDA. 2024 marked a decade since the first full year of RNG sales after Clean Energy first introduced RNG as a transportation fuel when we sold 20 million gallons in 2014. We, and the entire RNG industry, have come a long way in the commercialization of this clean, affordable, and readily available fuel for the large vehicle market. Amidst a volatile political and regulatory backdrop, our business has continued to perform well. This performance is anchored by our consistent recurring revenue fuel distribution business. Through our network of over 600 stations, we supply reliable, affordable clean fuel services to our customers. Our downstream RNG fueling business performed very well in 2024, bringing in almost $89 million of EBITDA. I would note that the new administration's focus on a domestically produced and diversified energy supply, RNG checks all the boxes by being a biofuel made from capturing harmful waste emissions and converting them into a productive transportation fuel. And RNG just makes common sense, which is what the administration is looking for as they move forward with all their policy initiatives. Rural areas are benefiting from the investment of hundreds of millions of dollars in new RNG projects at dairy farms and landfills across the country, and all of us are benefiting from cleaner air and fewer emissions coming from buses, shuttles, and trucks operating in RNG. On our last call, I told you about our customer, the large transit agency in Long Island, New York, NiceBus, and how we converted their existing fleet of buses from traditional compressed natural gas or CNG to RNG, allowing them to benefit from a significant reduction in the greenhouse gas emissions. That trend of our transit agency customers converting to a lower emissions fuel continued over the last quarter. City buses in Fort Worth, El Paso and Laredo, Texas, and Grand Rapids, Michigan, which previously operated on CNG, are now operating on RNG. Experience and deep customer relationships are important in this business. Operators of large fleets that move passengers or goods must have confidence in their fueling capability for those buses and trucks. And they want to be able to operate with the lowest emissions fuel that makes economic sense. Clean Energy prides itself on the support we provide customers, whether it's converting them to lower emission fuels or when they want to test a different fuel like hydrogen. We have now won contracts to build hydrogen stations for three different transit agencies that have decided to test fuel cell buses. We're seeing this type of confidence in us in the heavy-duty trucking space. As you've heard me say before, adoption of our RNG by heavy-duty trucking sector using the Cummins X15 engine is our most exciting growth opportunity. You might have heard Cummins CEO, Jennifer Rumsey, make a bullish statement about the X15N on their recent earnings call. But I want to remind you that the early adoption of the X15N in 2025 will be with a lot of singles versus home runs right out of the gate. Those coming to bat with some of the first orders of trucks equipped with the new engine are a combination of existing natural gas truck operators as well as new fleets to natural gas fueling. Some of these are leading names in the business. We continue to hear positive feedback from the fleets that have been testing the X15, and now some are beginning to purchase them. For example, our long-time customer Food Express, which tested a truck last year equipped with a beta engine, has now begun to order trucks equipped with the full production X15N. The world's largest construction materials company Cemex has placed an order for trucks equipped with the X15N that will initially fuel in our existing Southern California network before their designated station is built. Mullen, one of Canada's largest trucking companies, has begun to deploy their first trucks with the X15N. FedEx will soon be receiving trucks with the X15N that will fuel at a station in Oklahoma City operated by Clean Energy since we built it almost 10 years ago. Many carriers have expressed a desire to move forward with ordering trucks with the X15N once Freightliner rolls out their offering later this year. The wider the breadth of the adoption of the X15N, the better for the market. And certainly, we have the fueling infrastructure to accommodate many truck operations across the U.S. and Canada. In recent years, as trucking companies and their shipper customers have evaluated cleaner alternatives to diesel, their decision-making process has been impacted by policy volatility and uncertainty. The previous administration's myopic focus on battery-electric vehicles forced fleets to consider a technology that is not ready for most heavy-duty trucking applications. In most cases, fleets found insurmountable challenges with battery-electric and its infrastructure and continue to operate on diesel. And to make matters worse, California pushed its advanced clean trucks and advanced clean fleet rules that mandated the manufacturing and purchasing of zero-emission vehicles, resulting in confusion, uncertainty, and inaction. As of last summer, heavy-duty truck sales in California were down 50% compared to 2023. This means older, higher-emission trucks are staying on the road longer. That is not progress. And recently, California reversed its Advanced Clean Fleet mandate, but there still need to be some more clarifying steps taken. Carriers and shippers alike have goals to continue to reduce emissions, no matter what administration is in place, and that has not and will not change. The examples of fleets that are moving forward with an RNG solution that I just mentioned are signs that low-emission objectives can be balanced with the practical realities of commerce and available technology. We are optimistic that the federal state policies going forward will support more of a technology-neutral path to lower transportation sector emissions. RNG is very well-positioned to provide this common-sense solution to fleets. And with the right engine and an ultra-clean fuel available at a nationwide infrastructure, we believe that all the pieces have finally fallen into place for significant adoption. The alternative fuel tax credit has been important for the natural gas transportation sector since the credit began in 2005. It has helped support the adoption of cleaner natural gas vehicles and fueling infrastructure as a replacement for diesel. The credit expired at the end of last year. However, it has been retroactively approved several times in the past. We, along with our industry partners, will continue to push through this important credit. It offers key support to our customers and industry. I will touch on this more later, but we did not include any AFTC revenue in our 2025 outlook because it is currently not in effect. Turning to our upstream dairy RNG production projects, we have six projects operating, two that are well underway in construction and four that began construction at the end of 2024 as part of our development arrangement with our partner Maas Energy. Our six operating projects are expected to produce 4 million to 6 million gallons of RNG in 2025. The two projects further along in construction are expected to be in service by the end of this year and could contribute additional RNG production in 2025 depending on the timing of completion. Four projects with Maas Energy more likely will come online in 2026. As you know, the Section 45Z Clean Fuel Production credit established under the Inflation Reduction Act is still pending finalization. It is designed to incent the production of transportation fuels with low lifecycle emissions. LNG has a deeply negative life-cycle emissions score because of the methane emissions that it captures and prevents from escaping to the atmosphere. This credit will play a role in supporting continued growth of low-carbon fuels production. We in the RNG industry have already been active in educating the new administration about the benefits domestically produced RNG has as they move forward to finalize and even improve this credit. And like the AFTC, we have not included 45Z in our 2025 outlook because the rules have not yet been finalized. Bob will go into more detail on the financials soon, but I would like to comment on our 2025 outlook. First off, you'll notice on our GAAP outlook our potential exit from 55 Pilot Flying J locations, where we leased space from Pilot, which almost exclusively houses LNG fueling equipment. When we signed this deal 15 years ago, LNG was the best solution for long-haul natural gas trucking. Since then, CNG tanks and range have improved substantially, and now there really isn't a market for LNG trucks. We will likely remove this equipment and save some money on leases and operations, although we will take a non-cash hit. We'll probably spend some money to remove the equipment. Importantly, we have a good relationship with Pilot, and we plan to continue that relationship. I also want to make note of our 2025 adjusted EBITDA outlook of $50 million to $55 million compared to our 2024 adjusted EBITDA of $77 million and remind everyone of why there is a decrease for 2025. Our 2025 outlook does not include AFTC, which contributed nearly $24 million to our results last year. As well, RIN prices are currently 30% lower than some of the higher values we saw in 2024. Those two factors account for a reduction of approximately $34 million year-over-year to our adjusted EBITDA. And we will see AFTC may well be extended in one of the tax bills that will be moving through Congress later this year. So, I hope we are being a tad conservative not adding in AFTC and the 45Z as well as planning for lower RIN pricing and modest growth in this calendar year coming from the X15N adoption. But I do want to strongly remind you that as we begin 2025, we have a strong balance sheet. And as I have just given you a few examples earlier in my remarks, we have a robust recurring business positioning us for growth opportunities in front of us in both fuel distribution and RNG production. And with that, I'll turn the call over to Bob.

Thank you, Andrew, and good afternoon to everyone. For the fourth quarter of 2024, we reported a GAAP net loss of $29.8 million on revenues of $109.3 million. On an adjusted non-GAAP basis, we reported net income of $3.6 million for the fourth quarter of 2024. For the year 2024, we reported a GAAP net loss of $83.1 million, which is at the low end of our GAAP guidance range for 2024 of $81 million, and this is despite having a non-cash write-down of a couple of equity security investments for $8 million in the fourth quarter of 2024. Also, keep in mind that the 2024 results are non-cash stock-based Amazon warrant charges of approximately $61 million of that $83 million loss. Our adjusted EBITDA of $76.6 million for the year 2024 exceeded the top-end of our 2024 guidance range of $72 million, which was a nice upside finish for the year. In the fourth quarter, we continued to experience strong results from our fueling operations plus we saw an increase in fuel volumes in the fourth quarter, so we got the double effect of continued good margins on higher-volume. The results of our RNG Upstream business for 2024 came in as expected, right in the middle of our guidance range from a GAAP and a non-GAAP EBITDA standpoint. From a cash standpoint, we finished 2024 with $217 million in unrestricted cash and investments, with $100 million available to draw on our debt facility plus there's $129 million of cash off-balance sheet in our RNG JVs with BP and Maas Energy. Our long-term debt was $303 million at the end of 2024. Our capital expenditures for 2024 were $57 million, that's net of grant money received and net of contributions that we received from our joint development partner Tourmaline for the build-out of CNG stations in Western Canada. In 2025, we expect CapEx spend to be about $30 million reflecting mainly the completion of Amazon dedicated stations in 2024. Capital expenditures for RNG Upstream projects that we own plus contributions that we made into RNG joint ventures was approximately $48 million for 2024. This is a little shy of previous estimates, purely due to the timing of when the projects needed funding. In 2025, we estimate RNG Upstream capital expenditures to be $104 million. We presented our 2025 earnings outlook in our press release that was filed on Form 8-K today, so you can see the GAAP guidance and the non-GAAP adjusted EBITDA guidance with a reconciliation between the two amounts. We also break our guidance down further between our fuel distribution business and our RNG upstream business, that RNG upstream business includes both our share of equity-method investments in RNG production and Clean Energy-owned RNG production projects. I'd like to make some important points for 2025; number one, and to repeat ourselves, our 2025 guidance does not include the alternative-fuel tax credit, which in 2024 was approximately $24 million of AFTC revenue. Both GAAP and non-GAAP included the $24 million of alternative-fuel tax credit revenue in 2024. So to be comparative, excluding the AFTC from 2024 would take the GAAP loss to $107 million and adjusted EBITDA to $53 million as starting points when comparing to our outlook for 2025. And then second, Andrew alluded to this that we're seeing about a 20% decline in average RIN prices for 2025 that results in an approximate $10 million reduction in RIN revenue for 2025 versus 2024. RIN price volatility, of course, is certainly part of our environment, and we do quite well on RIN revenues, but just wanted to point out this dynamic for 2025. We are estimating RINs in the $2.40 range for 2025 versus the average that we saw in 2024 of around $3.10. For the California LCFS, we see a little upside, we hope, when we look at 2025, where we are estimating California LCFS prices in the low $70s for 2025 versus in 2024, where we saw an average of around $61. This could be a $2 million upside in LCFS revenue over 2024. Third, it's important to understand that we are not anticipating significant incremental volumes from the launch of the X15N Cummins engine for 2025; the most important milestones to observe will be the initial adoption by a wide breadth of fleets, indicating the adoption is taking hold, which should have significant implications down the road. For 2025, we are anticipating 3 million to 5 million fuel gallons being attributed to the X15N, but importantly, we see this coming from over 25 fleets. This is a key indicator toward the future and we believe is very exciting and frankly something that was non-existent up until this year. RNG volumes are projected to be around 246 million gallons versus 2024 of 237 million gallons and like we have talked about last year, in our estimate for the 2025, the 246, we do not include an estimate for RNG gallons that we will fuel to customers outside our network, and on occasion, that does happen. In 2024, for example, we had about 9 million gallons of what I’ll call kind of wholesale RNG gallons, but we're not budgeting that in 2025. So from a comparability standpoint, excluding the 9 million gallons from 2024, that would bring the growth rate for 2025 closer to 7.5%. We may get some of those gallons and we serve the market well that way because we're a big mover of RNG. We don't forecast it. So it can look non-comparable sometimes. And then as we mentioned previously on our RNG upstream expectations for 2025, our volume expectations are that we would produce 4 million to 6 million gallons in 2025. That's the gross gallons being produced at principally the six operating projects. And as a reminder, we take all of those gallons into our fueling network. We're not estimating any revenues from our dairy projects for the production tax credit as Andrew indicated, and we will see how the guidance or the rules come down on that and as to whether we get to put any in 2025. Lastly, on the RNG upstream, approximately 50% of the earnings and our guidance outlook for the upstream is coming from our large dairy in Idaho, where we are providing operating services while we construct, so that's a little bit of a drag on the GAAP and adjusted EBITDA amounts. That project is expected to come online at the end of 2025 and then we will begin the monetization process in '26, and of course, expect to curtail and exceed those operating costs that we're experiencing to date and in '25. Our consolidated revenue, we're looking at to be around $400 million for 2025, which our revenues, of course, are also impacted by not having any alternative-fuel tax credit in the 2025 guidance and also somewhat on the net lower environmental credit revenue that has an impact on that revenue. So we're expecting around $400 million for 2025. Lastly, you will note a larger depreciation expense that's estimated for 2025, and that is primarily associated with our possible exit from the pilot stations that Andrew mentioned and the accelerated depreciation that would occur for the sites that we exit. With that, operator, let's turn the call over to questions.

And we'll move first to Saumya Jain with UBS. Your line is open.

Hi. How are you guys looking at the clarifications under 45Z? How much credit, I guess, do you think you'll be eligible for? And how are you considering the OAL pause?

The OAL piece from CARB.

Yes.

Yes, so for those that don't know about CARB, we spent the last 18 months, everybody did working on the new rules for CARB, and then the office of, I guess it's administration legal or some legal office called into question sort of the process. We tend to think that's really technical. We've been talking to leadership in Sacramento and CARB and other offices, and we feel like this is really a technical thing that everybody seems to be acknowledging that they want to try to get resolved here quickly. So we tend to think that in the next few weeks or so that will get resolved and those rules will get put back into place. It always moves a little slower than I think, but we are told and ensured that there was nothing nefarious. This is just really highly technical in nature. And so let's hope that they get that set. Therefore, we believe that the pricing will come back and we'll be back into the '70s. Lower '70s like we've seen, right after the OAL came out a couple of days ago, the credit touched 55, and it's come back to, I don't know, 66 or something now. So I tend to think that we'll be back in the 70s, and then we think that the remainder of the year will work off those credits and we'll see a higher price, and it wouldn't surprise me that we'll touch something closer to 80 towards the latter part of the year.

All right, got it.

And the first part of the question.

First part of the question was on the PTC, and kind of what value we're...

Well, right now, I mean, the Biden administration rushed that out at the very end, and frankly, let's just be real candid about it, they picked a brand new GRESB model that didn't fully appreciate the methane capture like we do with the GRESB model that's used by CARB and they kind of used a methane maneuver more like a beef-cattle, which we don't use in the RNG business, and so it really limits the value of the credit because we don't get as low carbon as we should. So right now, that would range between $1 and $2 with our projects probably closer to $1. We tend to believe that if that was done correctly, it should be higher than that, something closer to $3 or $4, $5 based on the carbon intensity, the negative nature of our carbon intensity. So we'll see how that shakes out. But that's one of these things that the new administration is trying to get their footing on just how do they feel about certain biofuels and certain mandates and certain credits. We generally feel that the administration wants to be constructive for these kinds of a program that encourage fuel from the foreign states that are renewable in nature and that are from these kinds of programs, we'll see how that goes.

Thank you. And do you see any volumes in the transportation sector maybe going towards power generation for data centers?

Are you talking about on RNG now, right? So, I think transportation still accounts for somewhere between 75% and 80% of the RNG, and I have wondered if some of these big power uses for data centers might not be really elegantly satisfied with RNG, but it's at a significantly lower price. So we'll see how much of it gets siphoned off into that market. But I'm sure some will over time, because when you start talking about nuclear plants and other kinds of production facilities that are required, bringing in a low-carbon fuel like RNG just might be a really elegant answer. So we'll see how that goes. But there really isn't a better use than transportation for RNG. I mean, transportation is a hard-to-decarbonize sector, you can't use wind, you can't use solar, we've seen the situation around batteries. And so RNG into heavy-duty diesel transportation is really a very good use for RNG, and therefore, that's why you're rewarded handsomely for it.

Got it. Thank you.

You bet.

We'll move next to Eric Stine with Craig Hallum. Your line is open.

Hi, Andrew. Hi, Bob.

Hi.

Hi.

So maybe just starting with volumes. I'm wondering if for the fourth quarter, if you can just talk about from a high level of volume growth in your key sectors and then also for 2025, where you're kind of thinking about from a volume perspective? I know that's tempered a bit just because of the 15-liter and that coming on later in the year.

Yes, Eric, for the fourth quarter, it was in our fueling area. And so sector you're going to be kind of mainly in the fleet category as well as some of the RNG that we flow to our transit customers. So that's what was driving some of that growth. And then in - for '25, we see modest growth kind of throughout, I would say that as normal, with then kind of adder from the X15N. It's not a lot, but it's all incremental. So it is meaningful, but we're seeing for the most part growth throughout maybe the refuse is a little bit muted, but that's a very mature market.

Yes, understood. And then maybe just sticking on the volume topic. It sounds like what you are, if not done, very close to being done with this at least initial Amazon station build-out. Curious what you're seeing from non-Amazon fleets that still utilized those stations? What type of growth have you been able to, kind of, separate that out and track how that's going?

We're seeing some - again, look, I think it's important to note at this point in the call, Eric, and you know this because you follow it closely. You're really coming off of 2024, which was a difficult year in terms of sort of the chill that was felt. Maybe it's the economy in general, maybe it was the political season that we are in. It's certainly in the heavy-duty truck space and in some of what we see is the policy environment got really tricky. I mean, as I mentioned in my remarks, can you imagine in California, one of the biggest markets for truck sales, down 50%. So the policies that were being talked about that were reported in the paper and all, it was suggesting that you had to buy an electric truck. And if you didn't have to buy one right the second, you sure needed to consider it in a year or two years or three years. And so it really had a dampening effect on a movement toward natural gas or RNG. Well, why do you want to buy a brand-new tractor on RNG if two or three years from now, you're really not in California supposed to be able to use it? So it - we're coming off and thank God, we're - I think that sort of common sense maybe is prevailing as some of this. Some of these rules just weren't - they were well intended perhaps, but they're just not well thought out. And so we're seeing CARB trying to get their arms around how do they reset these rules to achieve air quality, achieve climate discipline, but yet within the realms of economics and something that works with commercial. I really think that as you go through this kind of difficult last half of '24 and into '25, RNG, natural gas, heavy-duty trucking, were rising to the top, right? I don't have to convince anyone that the hydrogen fuel-cell trucks, that's not going to happen, and the electric is, I think it's clear that it's - if it ever happens, it's weighed out. So we're going to be one of the last fuels standing here. Thank goodness we've arrived with a new engine product. The X15, now in talking with the gentleman in charge of sales for Cummins, he really wants to see 2025 not get ahead of ourselves, but see breadth over a 1,000-truck order by a big fleet. He wants to see dozens of fleets take 20, 10, and 35. He says that's how we really build to significant volume. And as I mentioned in my remarks, I had to be impressed with the CEO of Cummins talking about the percentage penetration in the future; now you're talking. So it's really a - '25, we begin to build the base and we'll begin to see volume towards the exit period of 2025, and then I think you really start seeing significant volume in '26 and '27.

Okay. Thanks a lot.

So in particular, we're seeing some pickups at different customers at some of the purpose-built stations for Amazon. I'm forgetting the name of the fleet, Eric, just 12 units showed up the other day in Ohio, so that was a really nice adder for us, significant volume. So we're seeing it, and if you didn't have those locations in San Bernardino, we're seeing a nice mix of new volume showing up there in California, so we're beginning to see it. Those are beautiful stations that have - can access public fleets, and they're well-positioned, so in the future, they'll grow - continue to grow.

Okay. Thank you.

We'll take our next question from Rob Brown with Lake Street Capital Markets. Your line is open.

Hi, good afternoon.

Hi, Rob.

On the 15-liter rollout, how do you see that population using your existing fleet footprint or - sorry, station footprint? Is that going to be using what you've got out there or do you see a big growth in new stations? How do you sort of see that happening?

I really do, Rob. I think it's a really good question. I really do believe that certainly when you're talking about it's kind of 10 and 20s and 30s and that kind of thing, it will use the existing network. And all of these big national fleets, and thank goodness, the nice thing rolling out - Cummins rolling this out with PACCAR and soon Freightliner, they're working with the largest fleets, and they all have lanes all over where we have our existing network, and so we'll see a nice pickup before we have - we're starting to have to build. Now don't get me wrong, I'd love to have J.B. Hunt eventually after they do a few 100 trucks and say, okay, now put in stations at X, Y, and Z terminals for us, and we'd love that business when it happens, but it will start with our existing 100 some odd truck stops.

Okay, great. That's good. And then you talked a little bit about the drag from your Idaho project, what does that kind of look like in '25? And I guess, how does that flip around or time might be flipping around?

Yes. It represents close to 50% of your outlook for the adjusted EBITDA in that range. And that really is because we are performing kind of operating whatever operating activity up there for the farm; it was all part of the deal because this - there is one of the largest around. So that will continue in '25, but there's no revenue on that at all because we're still constructing. And so we'll finish that by the end of '25. And then we'll start you capturing all that manure and then creating the gas and then we'll be on our way to RIN, the LCFS monetization. So then it will be a fully functioning project. In '26.

Got it. Okay. Great. Thank you. I'll turn it over.

Rob, it's impressive. And when we get that done, we'll have people out to look at that facility. I mean, think about it, 37,000 milking cows. I mean you've essentially built and this is what the cost is right now. You're operating a sanitation district, if you will. For if you put it on a human basis, probably be 100,000 people. And you're operating that now; you haven't yet been able to - we haven't finished the collection part and the digester part, that comes at the very end, but that's what the drag is from. And that was part of it. That was always figured into the deal because the farmer needs that. But it's a very impressive project that we're going to be very proud of; it's going to generate a lot of RNG when it's done.

Okay. Thank you. I'll turn it over.

We'll move next to Dushyant Ailani with Jefferies. Your line is open.

Hi, guys. Thanks for taking my question. And also thank you for sharing your RIN and LCFS assumptions in your guide. That's helpful. Just going back to your prior question on the OAL. So I think you said that in the next few weeks, it will be resolved. Then is it possible to see that the LCFS, the new amendments come into effect in that original timeline in April or yes, how do you think about that?

Well, I don't know that I'm the exact expert on this. My impression was that it should get resolved shortly. My words were next few weeks. I was kind of under the impression, Dushyant, that sometime in April those should get reinstated. Now I may be ahead of myself by a few weeks here and there, but I mean, it looks to me like what we're being told is technical in nature and that it will get resolved, and it wasn't something that there wasn't some nefarious situation going on here; that really was something that needed to be clarified in terms of having the appropriate process that's going to get resolved; everybody sort of understands that. So I was under the impression that sometime in April or so that it will be back on track.

Got it. That's helpful. And then the second was, just wanted to think a little bit more on the 15-liter engine and just the incremental demand that we could potentially see from it. I mean, I know that you guys talked about, I think some of the examples you gave was there like incremental demand, but as well as it's the 15-liter offsetting some of the legacy engines, right? So how do you think about that incremental demand from the 15-liter engine?

Well, first off, remember that - let's just think of the scale, right? So the Class-8 spaces range depending on the year, somewhere between 220,000, 240,000 units. And without putting a lot of words in Cummins mouth, though I'm always willing to do it a little bit, but they have said to me in meetings at their headquarters before that they saw no reason why we shouldn't that if this product was like they think it could be that it should be able to eventually reach 10% penetration. And I think what you're remembering, Dushyant, before is that we kind of talked the way this thing would phase out, and I think we're about maybe a half year behind that we're going to start out between 2,500 and 3,000 units; we thought we were told in 2024 and then kind of move once we got Freightliner in, then you'd add another 1,500 units, so you'd be at sort of 5,000, and you would slide over kind of a 2.5 year, 3-year period to about 8% - between 8% and 10% penetration. Now, CEO Rumsey, the other day, she used 8%, so let's just use that; I think that's a great number. So that's 8% 20,000 units. So that's kind of within striking range of those numbers that I've heard over the last two, three years talking to my manufacturing friends, Ed Cummins of years gone by. That would be significant. So when you then multiply that times 15,000 gallons, that's 300 million gallons, so then we're way off to the races; even at 5%, for our company, it's very significant. So that's why I think this building of the base is really important. So that fleets that buy - look, Knight-Swift buys 5,600 units a year just to keep pace, just to replace. So would I love to have them take 1,000 units? Sure. But is it more important just to make sure that they get comfortable and take 50 and what is - something this year, we need that breadth. We need a lot of those kinds of fleets that have the buying power eventually to get into this. It's not crazy, Dushyant, because when you think about it, it took about three or four years the introduction of the nine-liter refuse engine. Now I'm going back away 2008 but by the time you got to 2011, you were at 50%. 50% of the new purchases were natural gas, and it's kind of hung around that. Now, it's a much smaller market, 4,000 units, 3,500 units a year in the refuse space. But you know what? The refuse space, they don't travel as many miles, they don’t use as much fuel, and there's not as many trucks and there's not as many trucks purchased. So, I think for the same reasons we saw the success in the transit and the refuse space, we'll eventually see it here. Look, we're providing really a great engine product with a low-carbon fuel that's cheaper than diesel fuel. And we've been working with this rollout this year; an attractive fuel pricing that allows our fleet customers to get about a two-year payback on the equipment. So, we think it's compelling, and I think some of - let's keep our fingers crossed. We think we're doing the right thing to see building a good base for 2025.

Understood. Thank you.

We'll move next to Derrick Whitfield with Texas Capital. Your line is open.

Good afternoon, guys, and thanks for taking my questions.

Hi, Derrick.

A bigger-picture question for you. Given the turbulence in the regulatory markets and the lack of clarity with 45Z and AFTC, how are you thinking about project development beyond Maas for projects that aren't already meaningfully under construction?

It's a very good question, Derrick. What I think - what we've been saying, Bob and I have one we've been talking about is we have a good set of projects in-house, we've got them funded. Some of them are fairly big. A couple more are - one of them is for our - is 100%. We like - we like having the six projects now working to optimize those, bringing these other two large projects on. Those two projects together will be 50,000 milking cows, so together they're pretty big, and then the Maas. I'm not sure that we're that interested as we sit here right at this moment with the lack of clarity on some of these things that we would be doing greenfield projects. We always - we get to look at a lot of different deals. We have seen some of our friends in the business wonder if they want to go forward, so if there are good opportunities that come our way we'll look at it, but we have the current projects funded. We bring in RNG from 80 different suppliers, so it's not like we have to do this. We've long believed that it gave us - we have places to put this RNG and puts us in a little bit different position because we have millions of gallons where we can insert this low dairy RNG into California and move some of the other fuel out. So it makes a lot of sense for us - for our own destiny. But I don't know that we'll be - I don't think you have to worry about us stretching the rubber band too tight here and doing more greenfield projects, certainly until we see how RNG shakes out relative to kind of the movement of these advanced clean technologies.

Terrific. And then with respect to 45Z guidance, the initial guidance from Treasury understates the value of dairy RNG as you noted based on the average CI signed for animal manure, I guess based on your conversations that you're having with industry trade organizations and the government, how would you frame the likelihood of a positive revision?

Well, I think that the - not to be - as you would expect; those in the industry believe that we are not receiving the - what we should have got. And I think most of us that work with California and other places just believe that they missed the mark. I mean, now can you imagine they decided to use methane calculation from manure that we don't use, I mean, it's sort of - it's like the gang that couldn't shoot straight; I mean, it's kind of strange. So you have to wonder if they just wanted to limit RNG and limit the credit that came our way because they were trying to help other advanced technologies, that would be my suspicion. So I think our case is going to be fairly easily made that they set the wrong REIT model. Now, I guess the bigger question is, do they want to encourage this kind of business? And what wiggle room do they have to eliminate it altogether or now this was passed in law, so we'll kind of see how that shakes out. We do have congressional support for this. You know, you kind of - a lot of us forget with all the activity with the new administration in 30 days, there still is a Congress, and they still do have a view on this, and they still - it is bipartisan. Just today, I would say just while we're - you could get kind of down in the mouth about this, just today, the Trump administration promulgated a rule on ethanol, upholding a Biden era 15% ethanol increase - so an increase in ethanol. So I do believe that the Trump administration supports these renewable fuels. They support the dairy farmers, red states; they understand this we had good relations with the first Trump administration. So we'll have good relationships here. And I think they'll listen to us. So I'm somewhat optimistic on 45Z getting resolved. Now the AFTC, I'm actually more optimistic that the AFTC will be resolved, except I mean the big beautiful bill, there's just a lot of moving parts on how that's going to get sorted out with cuts and military spending and different energy things and government reductions. Just we're in there competing for space, and so in kind of normal times, I'd say, I think it was sort of a no-brainer to get that extended. So we're on it. And the industry is on it. I think we've sent - the industry sent a letter with 450 signatories supporting AFTC re-adoption. So I feel kind of looks like there's a lot of support. And we'll just kind of see how it shakes out.

That's great. Thanks again for your updates and taking my questions.

Yes, you bet.

We'll move next to Matthew Blair with TPH. Your line is open.

Thank you and good afternoon. Hopefully you can hear me okay.

Yes.

I wanted to ask about the unit - okay, great. I wanted to ask about the unit economics for the X15N engine from your perspective, what kind of premium are you seeing out there? And how many years would it take a user to pay back that premium on the engine?

When the engine was introduced, Matthew, in 2024, these low volumes, we saw incremental pricing from anywhere from - well, let's put it this way, often it was the incremental - now this would be with a lot of range, a lot of tankage onboard. Remember, it's not just the engine; it also has the fuel system, it's upwards of $100,000, sometimes $115,000. So that's a pretty stout incremental price. In our conversations with the OEMs, we were - and with the fleets, we were clear that if we could get the pricing down to somewhere closer to $75,000, which we still believed is pretty full pricing. As compared to - this is incremental pricing to diesel. And with our fuel pricing that we've shown, we can get them about a two-year payback, two years, two, three-month payback. That seems to be - the fleets seem to want to listen to that. You get much higher than that and it's a more difficult sell. At $120,000, I mean, fleets just kind of think like that's just too much. So we know - now, we also know that when this first started in the refuse business a long time ago, so inflation was different and economics were different. We had a $55,000 to $60,000 incremental on a $200,000 trash truck back in the day. Today, you have about a $29,000 incremental for a nine-liter with the fuel package on a modern-day fuel truck on the $380,000 refuse truck. So it's come way, and as a percentage, it's like 9%. And it gets within a one-year payback, less, six months. So I don't know that there's any reason why we have to have a 75%, I mean today, a nine-liter engine for the transit buses and for the trash trucks, they have no incremental cost. The engine is cheaper than a diesel. So, maybe this is why Cummins years ago in their headquarters a couple of times said that they saw no reason why you couldn't be at 25,000 units, and they said that you really needed to get to that to get to about probably because they understand the price of what happens when they manufacture that number of engines price down. So I think - so we're sort of - I think, Matthew, we're sort of - we kind of know what the - we know where we need to be. We have some flexibility on the fuel price. We have buy-in by some of the OEMs. We're working closely with the dealers, making sure that nobody is trying to clip too much, and our friends at the fuel system, and I think we're all kind of trying to row the boat about the same right now; Cummins seems to understand it too.

Okay. Thanks for all the color. And then for my follow-up, for the six operating dairy RNG plants, and then just in regards to the negative EBITDA guide for 2025, I understand there's going to be some costs in Idaho, but for those six operating dairy RNG plants, do they currently have LCFS pathways approved, or is one of the headwinds that you're still waiting for CARB to grant those pathways?

Well, they do just on a temporary basis. So that does inform your - the value that you're going to get, so we are waiting for the provisional, if you will, on those.

Okay. And those might come in sometime during 2025 and that would presumably be upsized. Okay.

Yes. Yes. So we're still a little bit, frankly, in that ramp-up mode, and I mean, which is going well. I mean we have the - one of those was a dairy we had in Del Rio, Texas, and that - we're encouraged by that because the performance on that one is positive and we've seen it improve, if you will, based on certain improvements that we've made as our engineering and our group that we have looking at these has employed some efficiencies there, and it's happening. So we're very encouraged with that, but the other five projects that the same thing will happen because pretty much they operate the same, just maybe the maneuvers are a little different, but operationally, they're doing it. So we're very encouraged by that, but you do have to go through - it didn't happen overnight.

Great. Thank you very much.

We'll move next to Craig Shere with the Tuohy Brothers. Your line is open.

Hi, Andrew, an answer to Eric and Sean, you seem to suggest there should be good clarity around initial uptake on the Cummins 15-liter engines at least in the breadth of fleet demand and then that would translate into a lot of prospective hard fuel demand growth in the '26, '27 and beyond. I guess my question given that color is, obviously - well, obviously Amazon planned years ahead when they struck that agreement with you some years ago. And these fleets, if they're going to do more than 10 or 20, they got to similarly plan ahead, even if that's only for deliveries in 2027 and 2028. So I guess I'm trying to drive at your thoughts about the timeline that fleets are going to have to live by if they eventually want to have 100 or more units.

Well, I don't know, Craig; here's the way I think about it. Cummins tells us there is no trick for them to satisfy the demand. The Jamestown, New York plant can turn out many, many thousands of units. We have two rather large upfitting friends in the - for the fuel system business. They'll require a little bit of time. I mean, you can't hit them next year and say, we need 20,000 units in terms of tanks and all, but they'll have time to ramp up. Amazon bought and received - now these were 12 liters, right, 2,500 units in, I don't know, better part of the year, year and a half. Now it took us a while to build the stations and for them to get them in and get them organized, and that takes some time. But now, I really think, Craig, where I'm headed is that I think they've got to walk before they run. So I'm just using this as an example. I don't want them to get worried. But J.B. Hunt is very well likely to take 50 or 100 units before they buy 500 units. And J.B. Hunt buys, I don't know, three, I think they - just to replace, they buy about 3,000 units a year. So, I kind of think that's the way it's going to go that you're going to see these fleets take 100 or so ish, 50, 150, whatever it is this year, and hopefully the experience is good. Then we'll start having some discussions about them using them on certain lanes where we have stations, but then there will be more discussions about, hey, we're going to want stations that are five terminals in California, so that would give us some time in '26 to build those and bring those on. But I see it as sort of an orderly process to get up to kind of their buy. And that's what happened in the trash business. I mean, waste management numbers escape me now, but they started out ordering 100 or 200, and then they kind of worked their way to buying as many as they would buy in a given year because they knew it was a product that they wanted to put into the fleet. So I don't know if I'm answering your question or if I'm being dense, but that's the way I see this working. That's why you need the breadth. You need 50 fleets, 40 fleets bringing this into their normal purchase cycle to have a real robust market.

It sounds like it may be a stretch to presume that we're going to get a more multi-year Amazon-like very chunky fuel supply agreements this year; maybe that's more sometime in next year.

Yes. Well, I think I - that's what I was trying to say. You're not going to see big chunky 2,000 truck, 20 million gallon a year type orders this year.

No, I was just thinking if they're planning three years ahead, they could start the Amazon agreement with you involved years of building out stations...

Well, look - yes, we - I'm not trying to - no, you're exactly right. Look, we're talking to fleets about, okay, where would you do it, which lanes, where do you want fueling, which one works, okay, you can use our station that's currently outside of Scottsdale, but you really want to add, you have a really big terminal there so that would probably be a place, how many do you want now. So we're doing all that, and yes, that - and we've been doing that. We've really retooled and refocused our salespeople. Each have a very set number of these people that these fleets that can buy and these numbers that have big fleets, they're working it. And yes, they are doing this sort of multi-year plan. But we think it's going to kind of start out in the - we're just trying to set the expectation that you don't expect big chunky announcements this year. Now I'd love to be surprised by somebody, but I think it's going to - it will be very important for the market and really important for our company if we see some of these very significant fleet starts; you start seeing these 50 and 50 truck orders pop out.

Got you.

And we are putting volume in, we're not thinking it's not going to happen. I mean, we've got in our goals and in our budget, we've got millions of gallons for the X15N even for this year, and of course, that's a run rate. It will be better for next year. But we know we've got to get this breadth going this year, to then have a chance of doubling up, tripling up for next year.

Got you. And my last one, maybe more for Bob. As to 2025 guidance presumptions around margin at the pump. Thoughts about conservativeness on presumed pricing power versus diesel, and to the degree you do get some increased utilization at existing terminals with the initial dribs and drabs on these 15-liter engine orders, how much could that really contribute in terms of operating leverage?

Yes, we don't see significant changes in the environment that we've been kind of running relative to kind of diesel and nat gas and our pricing at the pumps and the cost of natural gas. I mean it's - we see it being similar to what it is today, low natural gas prices, oil will probably stay a little bit high. And so we're in an okay range, we're in the 20- to 40-point spread between oil and nat gas. So we kind of see that continuing on, not going way up, not going necessarily down. And then on the 15-liter, no, I think there'll be some contribution there because those gallons will be kind of our sweet spot of public access fueling, we'll give them - we'll have good pricing, but we are - we flow RNG and so there's economics to us in other ways as well. So that will be good. But you're a little bit towards the back end of the year. You're kind of spread out. And so I'm not going to say it's going to move the needle hugely on the economic side, but it will. I mean, look, it's good money. I look really more at this whole adoption thing; the breadth of adoption is - I mean, you're kind of starting from a market that we had zero access to with trucks that utilize a 15-liter diesel, and every single one of them that makes that decision to go into the X15N is a huge telling sign in our view. So I'm more interested in 20, 25 fleets taken on those engines because it's like the money will come on that.

Great.

Craig, one other thing maybe this got to Matthew or Derrick's question earlier, I kind of glossed over it, but you know, we had PACCAR putting the Cummins engine in PACCAR, so that's Kenworth and Peterbilt. Thank you, Bob. This year, we get Freightliner. Well, Freightliner, but not until about April or May does the engine get put into there and the order book opens, but what's important is Freightliner's 30, I don't know, 5% of the market; we haven't had that, and so a lot of fleets are Freightliner fleets. And my friends at Freightliner may kill me, but I mean, in terms of pricing, the price point is a little lower. I sort of describe it as the ozone-bile compared to a Cadillac a little bit. So it's a little bit lower price point. So that helps on the incremental some, and some of our fleets are waiting for that Freightliner. So that's an important - we were told last year, hey, look, you can't get to these bigger numbers until you have the other OEM in here and that's Freightliner. So that's just something I wanted to embellish a little bit because we kind of skipped over that. Thanks.

Thank you.

We'll move next to Betty Zhang with Scotiabank. Your line is open.

Hi, Andrew and Bob. Thanks for taking my questions. I'll just ask two quick ones. Hello. For my first question, I wanted to ask in your prepared remarks, you talked about 25 fleets that you're seeing for 2025 fueling with the 15-liter engine, I'm curious if you're able to split that out by, you know, how much of that 25 is existing natural gas fleets versus fleets that are completely new to natural gas?

Betty, without doing a big analysis, which my guys could probably do, is probably 50-50. It's fleet - about half of them are fleets that we know well, we've talked to for years, just haven't operated natural gas because they didn't think that the 12-liter is big enough, this and that. But we know them; we talked to them, and then the other half are customers that we've kind of worked with over the years.

Okay. That's helpful. Do you see it - do you see that 50-50 split kind of continuing, or maybe we'll have more new fleets adopting it?

I hope it's the latter, right, hope it's new, right? I mean, look, we're just scratching the surface, so it better be new, right? There are thousands of fleets that haven't used natural gas, right? So it ought to. Now, what I am very excited about, there was a time when we were just trying to break into this business. You remember, you don't have to go back about 10 years ago. We thought that heavy-duty trucking would only be for drayage for trucks that operated in ports; we really didn't know if it would work across the country or super-regional. So we've come a long way, though we've - it's taken a while. But - and we were always sort of working with the smaller fleets, the 500-truck fleets. Look, this last year, I mean, it's America's largest fleets that are - that have tested this and have taken X15s into their fleet and tested and that we're talking to now. So it's the largest fleets that buy a lot of trucks. They buy thousands of trucks a year just to replace. And so we're working with those that could really to grow this market in a bigger way. So that's very exciting for us.

Okay, great. And for my second question, I wanted to ask about the quarter. Looking at the income tax, I think that came in a bit higher or a bit more of a charge than I was expecting. Curious if there's anything specific there.

I would say nothing specific other than good old-fashioned tax accounting and taking care of various sections of the tax code, if you will; some of - I think one of the things that kind of came into play more as we've evolved is the 163J interest deduction considerations. So stuff like that is kind of non-cash. But in the course of that, you end up creating some deferred tax liabilities, but don't - depending on what the item is, they do not get covered by a deferred tax asset that you end up kind of creating of a tax provision expense. And so that's it, it's not a cash payment; I don't know that we would be paying any taxes anytime soon.

Great. Thanks very much.

I want to go further on that. I want to go a little further. Andrew, you and I have talked about it. We've gone over - so, that's what it is.

Thank you.

Thanks, Betty. Good catch, Betty, on that. I appreciate someone looking at the tax provision.

We'll move next to Jason Gabelman with TD Cowen. Your line is open.

Yes. Thanks for taking my questions. The first one I wanted to ask is on 2025 CapEx guidance for upstream development, $104 million. Is that all being funded within the JVs or is there a capital contribution coming from Clean Energy itself towards that $104 million?

Yes, we - part of that would be about 60% of that would be a contribution into a JV; and the other piece would be a project that we have 100% on our balance sheet. 65-35, yes.

Got it. Great. And then my - just going back to the 45Z because it seems that most companies feel like there's enough guidance out there to give them safe harbor to book the credit as it's put forth in the predraft regulation. It sounds like Clean Energy Fuels is not in that camp. There's a bit more hesitance towards booking that credit. So is there some specific clarification that you want to see before you're comfortable accruing that credit on your income statement?

While we do want to see more - well, basically more along the lines of a kind of more of a finalization; we know there's a big comment process going through. So we feel like there's still uncertainty there.

Okay.

Jason, based on how you - look, if - who knows, look, we're watching that. And - but just as of right now, it's uncertain. So it'll be nice if there's some more certainty to it. Maybe they finalize it and say this is it. Thanks for the comments; well then we'll react to that.

Okay. And then just on how it - how the company books the 45Z, most of that will be within the upstream portion of the business, but will you book anything within the downstream?

No, it will be in the upstream. It will be in the upstream. Yes, it's in the upstream.

Okay, great. Thanks. Thanks for the answers.

Thank you.

Okay. Thanks, Jason.

And this does conclude the Q&A session for today's call. I will now turn it back to Andrew Littlefair for any additional or closing remarks.

Thank you, operator, and thank you, everyone, for joining us today, and we look forward to letting you know how we do in the next quarter. Thank you.

This does conclude today's program. Thank you for your participation. You may disconnect at any time and have a wonderful evening.