OPAL Fuels Inc.

Global Fuels Fourth Quarter and Full Year 2022 Earnings Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question at that time, please press star 11 on your telephone. As a reminder, today's conference call is being recorded. I will now turn the conference to your host, Mr. Todd Firestone, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Good morning. Welcome to the Opal Fuels fourth quarter and full year 2022 earnings conference call. With me today are co-CEOs Adam Kimora, Jonathan Moore, and Anne Anthony, Opal's chief financial officer. Opal Fuels released financial and operating results for the fourth quarter and 12 months year-to-date of 2022 yesterday afternoon, and those results are available on the investor relations section of our website at opalfuels.com. The presentation and access to the webcast for this call are also available on our website. After completion of this call, a replay will be available for 90 days. Before we begin, I'd like to remind you that our remarks on this call, including answers to your questions, contain forward-looking statements, which involve risks, uncertainties, and assumptions. Forward-looking statements are not a guarantee of performance, and actual results could differ materially from what is contained in such statements. Several factors that could cause or contribute to such differences are described on slide two and three of our presentation. These forward-looking statements reflect our views as of the date of this call, and Opal Fuels does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this call. Additionally, this call will contain discussion of certain non-GAAP measures, including but not limited to adjusted EBITDA, a definition of non-GAAP measures used, and a reconciliation of these measures to the nearest GAAP measure included in the appendix of the release and presentation. Adam will begin today's call by providing an overview of the fourth quarter results, recent highlights, and the update on our strategic and operational priorities. John will then give a commercial and business development update, after which Ann will review financial results and full year 2023 guidance. We'll then open up the call for questions. And now, I will turn the call over to Adam Camora, co-CEO of Opal Fuel.

Thank you, Todd. Good morning, everyone, and thank you for being here for Opal Fuel's fourth quarter and year-end 2022 earnings call. 2022 was a remarkable year for Opal Fuels, filled with many achievements for our company, as well as positive developments for the R&G industry as a whole. We are proud of what we've accomplished and we remain steadfast in our focus on executing on our plan. I'd like to highlight several points. First, we continue to execute on our strategic and operational priorities. We believe our integrated platform is a powerful model in delivering renewable, low carbon RNG to the marketplace. Strategically, our goal is to continue to grow our RNG production and to maximize the value of that RNG, which currently remains the U.S. transportation fuel market as the highest value distribution. Operationally, we remain committed to be the premier vertically integrated RNG company in the industry. one that excels at providing value to not only our shareholders, but also our customers and partners. Importantly, we think our visible and tangible growth profile is a differentiating factor in the marketplace. We grew our RNG output by more than a third this past year. As we disclosed in our 2023 outlook, we expect growth to accelerate this year by greater than 50% over 2022 to more than 3.4 million MMBTUs at the midpoint of our guidance. Our projects and construction remain on track, which provides visibility to accelerating production growth once again in 2024 from 2023. In addition to production, our advanced development pipeline continues to grow and mature. And as John will touch on later, we have seen some of the development delays from 2022 ease, and we expect to place at least 2 million MMBTUs of output capacity into construction in 2023. I want to touch on our vertical integration business model and our current views on environmental credit pricing. We continue to believe our business model both maximizes the value of our produced RNG and provides important flexibility and optionality in the future to capitalize on RNG tailwinds, both new offtake markets and public policy initiatives as those evolve and strengthen. The U.S. transportation fuel market continues to be the highest value offtake. averaging twice the value of fixed price contracts, and again, leave us the option in the future to explore new end markets and test incremental pricing power with fleet customers. We do get a lot of questions on this merchant model, and Ann will speak later about some of our business segments, fuel station services and renewable power, and the long-term contract and nature of those business segments, which mutes some of the volatility by remaining merchant on our RNG production. Having said that, let's dive into some of the recent dynamics in both D3 RIN pricing and LCFF credits. On D3 RIN dynamics, we see the recent drop in price being driven by the potential oversupply of cellulosic D3 RIN volumes in the proposed set rule introduced by the EPA in December of 2022, with rule finalization expected to occur in June of this year. This potential oversupply is driven by two factors. continued growth in RNG production capacity, and additional supply from the proposed eRIN pathway. It is important to note that Opal Fuels will see strong benefits from this eRIN pathway, as our existing renewable power segment will be able to participate and generate significant incremental RINs without investing new capital. We will be providing more clarity around this potential as the rules get finalized. On the demand side of D3 RINs, we remain optimistic that EPA RVO targets could be adjusted higher to account for both cellulosic supply additions as well as anticipated eRIN volumes as those rules become finalized. It is the clear intent of both the original RFS and proposed rule commentary to support and grow the cellulosic category. The original law stated the cellulosic D3 category was targeted to be 16 billion D3 RINs. and the EPA administration is meant to support growth up to that figure. With updated industry production actuals over the past six months and demonstrated new supply growth coming online, the EPA has the support to raise volumes and has opened the door for future reenactment of the waiver credit over the multi-year set period. It is important to remember why the law and EPA are so supportive of the cellulosic category. The source of this category of biofuels is capturing harmful methane emissions, the single most important thing we can do to combat climate change. Another interesting feature of the proposed set rule is the multi-year RVOs. We believe that feature may dampen volatility in the future and perhaps open up two- to four-year contracts for RINs now that obligated parties will have visibility into their volume obligations for multi-year periods. So from our perspective, we believe OPWL will ultimately create more value from existing and future projects from the eRIN pathway. And structurally, we may see new contracting opportunities from the multi-year RVOs. Given this outlook, we are currently limiting our 2023 RIN sales in the first half of the year as rules are finalized. And Anne will touch on later how that will roll through our financials and reporting. As you see in our guidance sensitivities, we have much less exposure to LCFS pricing. Our Sonoma project has an offtake contract with a floor of $100 per credit, and we have much less dairy production currently online versus landfill. On LCFS, though, we remain very optimistic on credit pricing and the direction that CARB has intimated it is heading to on proposed program changes to be finalized over the balance of 2023 for 2024. CARB is giving clear signals to the market they would like to encourage more investment by supporting pricing, which will likely include stronger compliance targets, creating incremental demand for LCFS credits starting next year. As we look to this year, we are introducing our 2023 adjusted EBITDA guidance, which we expect to range from $85 to $95 million. Our RNG production range from 3.2 to 3.6 million MMBTUs, and capital expenditures to range from 220 to 240 million. Anne will provide more detail, but we expect an $8 million change to 2023 adjusted EBITDA for every 25 cent gallon change in D3 RIN prices. We continue to benefit from substantial and broad-based developments in our industry. First, I'd like to provide some insight into how our thinking on the IRA has evolved over the last several months. While we still await the final guidance from Treasury, we are confident that the ITC provisions will apply to landfill RNG projects, thus encompassing nearly all of our in-construction and advanced development pipeline projects. While we are still determining the exact level of ITC benefit, we have been in advanced discussions with the appropriate advisors and counterparties to believe we will benefit significantly. Second, the 45Z credits are set to be impactful as well, And we expect clarity from Treasury in the coming months on that front. We expect to begin realizing these benefits in 2023 and see them growing in 2024 and throughout the next five years. 2023 is set to be a very good year for Opal Fuels. To some degree, a bit of a contrast from 2022. In 2022, we saw very good commodity environmental credit pricing, but saw some near-term headwinds in the development of our new project pipelines. In 2023, we have begun the year with lower near-term commodity and environmental credit pricing, but see the positive momentum beginning with our new project development, which is ultimately the long-term value driver of our business. With that, I'll turn it over to John. John?

Thank you, Adam. And good morning, everyone. I want to start out by saying that we are very focused on executing on our growth plans. We grew RNG production nearly 40% in 2022, and we expect to grow by more than 50% this year. Our in-construction portfolio's timing is progressing with a cadence that is in line with our expectations, and we think sets us up for accelerated growth into 2024. During 2022, our operating project portfolio increased from three to six projects, and now seven with the just completed biotown dairy project in Indiana. In 2022, we commissioned three landfill RNG projects, the Noble Road project in Ohio, our New River project in Florida, and the Pine Band project in Minnesota. These RNG projects represent 1.6 million MMBTU of nameplate RNG capacity. At all three of these landfill projects, gas production continues to increase as the trash volumes there increase. In addition to our operating projects, we currently have six RNG projects in construction with the Biotown Dairy RNG project having just entered operations, as we said. Of these six, we expect Emerald to go online in the next several months, Prince William in the fall, and Sapphire late in the year. Our two dairy projects we expect to be commissioned in early 2024 and the Northeast landfill later in 2024. As Adam mentioned, we expect production increases this year from our operating and in construction portfolio that are in line with our prior expectations with the 3.4 million MMBTU midpoint of production guidance being a 57% increase compared to RNG production in 2022. I want to pick up on what Adam mentioned earlier about development conditions easing. The good news is that the project development logjam is breaking, and conditions are improving in terms of moving projects forward compared with last year. Recall that we described how last year presented a number of challenges which tended to delay projects as landfill owners assessed the substantial market dynamics surrounding the value of their RNG resource. We provided some color on this topic on our third quarter call. Fast forward to today and we're already seeing improvements. We anticipated an acceleration of executed agreements for gas rights and for construction contracts and that this acceleration should translate into progressing projects through our advanced development pipeline more quickly and placing projects into construction as we progress through the year. Since we last reported, we've added over 0.8 million MMBTU of biogas to our advanced development pipeline, most of which is landfill, but also contains dairy and food waste projects. These projects are ones that we have qualified and that we reasonably expect can be into construction within the next 12 to 18 months. I'd also remind listeners that our advanced development pipeline does not include other earlier stage projects, which we continue to evaluate. As one of the largest RNG players in the sector, we tend to see most of the projects in the marketplace, all of which makes our pipeline dynamic and growing as we screen for the best opportunities. Our overall development funnel continues to see positive momentum and provides opportunities in excess of what qualifies as our advanced development pipeline. Opal Fuels is on track to commence construction of 53 fueling stations this year. Approximately 24 Opal Fuels owned stations and another 26 for third parties. Our overall RNG fuel dispensing volumes are expected to grow to approximately 55 million gallons this year from nearly 30 million gallons in 2022. In terms of our landfill gas to electric projects, Opal Fuels owns and operates 19 landfill gas to electric projects, representing about 124 megawatts of nameplate capacity. Recall that we began developing this portfolio 25 years ago, back in 1998. While six of these projects are candidates for conversion to RNG projects, the majority will remain electric projects. The EPA's recently proposed eRIN pathway stands to substantially increase the value of these projects, adding over $300 per megawatt hour gross to the existing values of these projects which has the potential to substantially increase the EBITDA from this business segment, depending on eRIN sharing and RIN price. We await updated guidance from the EPA on this topic, which is expected in the next few months. In the meantime, we are positioning ourselves to meet this market opportunity by continuing discussions with auto manufacturers who are proposed to create these eRINs through the EV data that they collect. As we highlighted early on, continued industry consolidation remains a significant tailwind for the RNG industry and certainly for Opal Fuels. We highlight recent upstream and downstream transactions that acted as additions to existing upstream infrastructure. We think those acquisitions tend to support how industry players are thinking about the value of integration. Some of the thinking driving this consolidation revolves around how demand expectations for RNG are expected to shift over the next several years. We're already seeing the beginning of this trend with demand growth from utilities in the form of RNG mandates for power generation, as well as increasing demand in European end markets. And many expect increasing demand coming from Asia too. Separately, hydrogen producers are seeking low carbon sources of renewable methane And our portfolio of production assets and fueling stations is well positioned to take advantage as that market moves forward. I'll now turn over the call to Ann to discuss our fourth quarter and year-end financial results. Ann?

Thank you, John, and good morning to all the participants on today's call. Last night, we filed our earnings press release, which detailed our quarterly and year-end results for the period ending December 31st, 2022. We anticipate filing our 10K in the next day or so. We saw strong growth in two of our three business segments, RNG Fuels and Fuel Station Services. The biggest driver of the quarter and year to date results is RNG Fuels, where we are starting to see the contribution from the RNG projects that have come online in 2022. We saw strong top line growth for the fourth quarter with revenue up 42% year over year driven primarily by higher volumes produced and sold in the R&G fuel segment, as well as higher prices for brown gas and higher RINs under forward sales contracts we had entered into earlier in 2022. These benefits were partially offset by higher cost of sales due to electric utility costs and employee costs to support our growth, as well as higher royalties driven by higher energy revenues. G&A costs for the fourth quarter totaled $14 million, reflecting transaction and other costs, of which $10 million is considered one time. As a result, we generated net income in the fourth quarter of $32 million. For the full year 2022, before considering the impacts of preferred dividends, we achieved net income of $32.6 million, reflecting the standalone results for Opal Fuels LLC and ArcLake Clean Transition Corp 2, through the closing of our business combination last July 21st, plus the combined operations since then. Consistent with the results we saw in the fourth quarter, we benefited from pricing for environmental attributes that we had locked in via forward sales early in 2022, coupled with higher commodity prices. Looking at fourth quarter results compared to the third quarter, RNG production remained constant at 0.6 million MMBTUs, which represents volume net to Opal Fuels. Adjusted EBITDA was $20.1 million in the fourth quarter versus $25.5 million in the third quarter. The difference was primarily the result of the previously disclosed $3 million gain from the biotown debt associated with monetizing an in-the-money LCFS offtake contract. We also do experience some seasonality with some of our downstream fueling customers that see heavier volumes in the summer months, along with some timing associated with downstream fuel station construction contracts. We reported adjusted EBITDA of $20.2 million for the fourth quarter and $60.7 million for the 12 months ended December 31st, 2022. Adjusted EBITDA benefited from the same drivers we discussed above. higher environmental attribute pricing and commodity pricing offset by higher cost of sales and higher royalties. Fourth quarter adjusted EBITDA excludes several one-time items, including an unrealized loss related to our warrant exchange we completed in December. We also had a number of one-time costs related to going public that occurred during the fourth quarter and throughout 2022, which are excluded from adjusted EBITDA. As of December 31st, we had $167.8 million of outstanding borrowings, net of deferred financing costs, including $94.3 million of outstanding borrowings under term loan A, $28.5 million related to the remaining amount of the convertible note we had issued to ARIES for the acquisition of the Imperial and Green Tree projects in 2021, $22.1 million under the Sonoma loan, and $22.8 million related to our renewable power project financing. Our second term loan, which we closed in August, and which will finance a portfolio of RNG projects that are or shortly will be in construction, remains undrawn. As of December 31st, our liquidity position was $257.2 million, including $40.4 million of cash and cash equivalents, $36.8 million of restricted cash, $65 million of short-term investments, and $115 million of undrawn capacity under our term loans. We did recently draw down the final $10 million remaining under term loan one. I will also note that we did not have any exposure to either Silicon Valley Bank or Signature Bank, so we were spared any of the associated distraction that many other growth companies have been dealing with in the past few weeks. We expect these existing sources of liquidity to be sufficient to fund the company's construction and development capital needs for the next 12 months. We also anticipate that significant capital continues to be available for deployment in the RMG space. As a newly public company, we are very focused on how best to attract long-term investors. The OPWL team continues to believe that the most powerful way to do this is to deploy capital effectively and demonstrably grow earnings power. Before turning the call over for Q&A, I'd like to discuss our 2023 guidance. I will note that all guidance is current as of the published date, is subject to change, and we undertake no obligation to update it. As Adam noted earlier, we anticipate our full year 2023 adjusted EBITDA guidance range to be 85 million to 95 million, which is based on our expected range of RNG production in 2023 of 3.2 million to 3.6 million MMBTUs. Our adjusted EBITDA outlook is predicated on several key pricing assumptions, such as 225 per gallon for D3 RIN, $90 per ton LCFS credit price, and $3 for MMBTU brown gas. This quarter, we also included detail on the impact of commodity price changes to our full-year revenue and adjusted EBITDA outlook. We expect an approximately $8 million change, to 2023 adjusted EBITDA for each $0.25 per gallon change in D3 RIN price, a $1.4 million change for every $0.50 per MMBTU change in natural gas price, and a $400,000 change for every $10 per metric ton change in LCFS credit price. We are also updating our guidance for our portion of capital expenditures, excluding acquisition costs and net of any partner capital contributions. to $220 million to $240 million. Our guidance does include some assumptions about the amount of ITC we can monetize in 2023, but we await, like everyone else who follows the RNG space, definitive guidance from Treasury, so our specific disclosure will be limited until we have that clarity. All of our IRA benefits will be recognized as income, likely in other incomes. but a reminder that these are real cash proceeds, not just cash tax avoidance. Hence, the recognition is income, which is expected to continue for at least five years. As a reminder, in accordance with GAAP ASC 606, we can only recognize revenue and the related earnings from environmental attributes once they are sold to, transferred, and accepted by the counterparty. We present the value of stored gas and unsold environmental attributes as part of adjusted EBITDA to allow the reader to understand the value and timing of production. We will continue to report our adjusted EBITDA with visibility as to stored gas and credits as we anticipate only selling a minority of our production in the first half of 2023 while we await EPA's updated RBOs. As a result, revenue and net income will be lower for the first half of the year. with 2023 results being skewed to the latter half of the year. Again, the EBITDA adjustment is intended to levelize this reporting and match inventory produced within the period costs are recognized. Finally, going forward for 2023, we will be presenting the revenues and expenses associated with our CNG tolling business in fuel station services. As noted earlier, Opal owns and operates a number of dispensing stations where we dispense the fuel and service the location for a customer. This activity had been reported in the R&G fuel segment in 2022 and prior periods. Going forward, we will include this in the fuel station services segment to better differentiate between the business activities and value drivers in the upstream and downstream portions of our business and facilitate easier comparisons to peers in our space. Adding to that, although we are labeled as a merchant play due to our exposure to the volatility inherent in environmental attributes, there are several earning streams in this business that dampen volatility. Our renewable power business is predominantly contracted under long-term power purchase agreements. The fuel station services business is profitable and growing, supported by 10-year contracts, both service and fuel supply agreements. as well as construction revenue from stations we build, which provides visibility out for roughly 12 months. The net effect of these two key business segments provides recurring stable earnings and cash flow, which dampens our overall corporate volatility from changing environmental credit markets. With that, I'll turn it back to John and Adam for concluding remarks.

Thank you, Anne. In closing, we believe our future is bright. We continue to add new projects and advanced projects through our development funnel into operations with accelerating growth in gas production and distribution. While the world around us continues to lean into this sector, we're continuing to carry forward OPWL's vertically integrated mission to build and operate best-in-class RNG facilities that deliver industry-leading, reliable, and cost-effective RNG solutions to displace fossil fuel and mitigate climate change. And with that, I'll turn the call over to the operator for Q&A. Thank you all for your interest in Opal Fuels.

Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press Star 1-1 on your telephone. Again, to ask a question, please press Star 1-1. Our first question comes from Derek Whitfield of Stiefel. Your line is open.

Probably Mr. Whitfield. Okay. Yes. Hello. Good morning, all, and congrats on a successful first year as a public company, certainly in a difficult operating environment.

Thanks, Darren.

Thanks. For my first question, I wanted to lean into your prepared comments on the progression of your backlog, both near term and medium term. For 2023, it appears that Emerald, Prince William, and Sapphire projects are all progressing along the schedule you laid out in Q3. Looking beyond 2023, Could you place some parameters on the amount of project capacity from your advanced development pipeline that could be placed in production in 2024 based on the improving operating conditions you're experiencing? Good morning, Derek.

Sure.

Yeah, so we have an advanced development pipeline of a little over 8 million MMBTUs of main plate capacity of gas available. And as we continue into 2024, we see our dairy projects and the Northeast landfill project that we placed into construction last year coming online. Because of a gap in projects going into construction, there will be fewer coming online next year beyond that. But the projects that we placed into construction this year will go online in about 18 months or so would be your average construction time frame from commencement of construction until you start seeing the gas production. Could be a little faster, could be a little bit slower. So we'll see gas from the projects that are going online this year continue to increase our output. during 2023 and 2024 as those projects come online. And then we'll see the projects putting into construction this year start to contribute during the really late 2024, 2025 timeframe.

Yeah, the only thing I would add there is obviously we'll have a full year of production in 24 on the Emerald project that goes in. in a couple of months. And you'll also get a full year output from the two in the later half of this year. And that's really visible growth and accelerates production from 23 into 24.

Terrific, Keller. And then as my follow-up, I wanted to focus on the implications of the IRA to your business. Referencing slides 13 and 14, you arguably have more optionality in your portfolio than ever before as a result of the IRA. As you assess your RNG, ERIN, and hydrogen opportunities, how does the ERIN pathway impact your view on the allocation of capital between RNG and electricity with the understanding that time is likely your friend based on the growth of EVs relative to landfill gas? And then more specifically for 2023 guidance, could you comment on the degree of ITC embedded in your projections?

Yeah, I'll let Anne handle the ITC one first, and then I'll talk a little bit about some of the regulatory stuff happening, both in terms of IRA and even Catholic.

Yeah, thanks, Derek. It's Anne. So, as I had commented, you know, I think given the fact that we're still waiting for additional guidance from Treasury, which we expect to come most likely in Q2, we're being a little circumspect in terms of the specific amounts and details of what we've included in adjusted EBITDA for ITC. I think, you know, we are making some underlying assumptions, obviously, about the projects that are in construction and that will COD this year. But beyond that, you know, I think at this point we're not really ready to disclose much more than that.

Yeah, and as far as some of the other – this is Adam here. As far as some of the other public policy stuff that we see happening, you know, in addition to the ITC, which we'll get some clarity on, we're also expecting in 2023 to get some clarity around 45 V calculations and how carbon intensity scores may be allocated. You know, we think that's going to be really impactful specifically for, you know, the heavy negative CI kind of gap, but we need to see a little bit more clarity to really get a better understanding on that. The E-RIN pathway we think is really interesting for our business and, you know, opens up all sorts of incremental profitability opportunities on our existing landfill gas to electric projects and how we think about some of the new project development and what kind of opportunities that may open up. And, you know, it is a little uncertain in the timing of when they may finalize that rule. The EPA has received a number of comments back in February, so we'll see whether or not they're going to give that clarity in June. When we do expect, you know, perhaps a re-look at the RVO volume, whether or not that's going to include finalized rules on the ERINs or that may slip into later in 2023. You know, as we think about it from a capital perspective on what makes an RNG project versus a landfill gas electricity project, we like having the optionality for all these new end markets that are opening up that you mentioned, whether or not be hydrogen, or quite frankly, a lot of export markets that are opening up. So we like the idea if we can see good risk-adjusted returns on capital for an RNG project to continue to deploy capital and have that flexibility of offtake, whether it be new fixed voluntary markets or strengthening voluntary markets. So we see it as a big additive to our business overall. And on the existing landfill gas electric projects, obviously that would be incremental profitability. without having to invest new capital. So, you know, we're excited about the prospects for it, and we'll see, you know, the timing for when they finalize that rule.

That's great. Thanks for your time and comments.

Thank you. One moment, please. Our next question comes from the line of Ryan Todd of Piper Family. Your line is open.

Great, thanks. Congrats on the result. And let me...

I apologize that I conflicted and missed some of your earlier comments, so I hope, I'm not sure if you addressed some of this earlier in the call, but it's been a challenging stretch for many in the R&D industry in terms of project execution, getting volumes delivered on time and budget. What have been the biggest challenges for you on the project execution side, both on dairy and landfill, and are those things improving? Can you talk about how maybe parts of the supply chain and your ability to execute on your significant backlog is improving going forward and what has improved, if anything?

Hey, good morning, Ryan. This is John Moore. I'll start this one off. I think we reported last quarter that there was a a slowdown in execution of contracts and movement through the pipeline as landfills realized the value of the RNG inherent in their landfills. And each of the major landfills and many of the smaller ones took the opportunity to reassess how they wanted to approach that value proposition. So that resulted in a bit of delay, but I think they're through that process, and we're seeing a lot of movement through our advanced development pipeline and progress there. So, you know, conservatively, we think that we'll put 2 million MMBTU into construction this year. Our overall pipeline, we've reported at 8 million. We think there's great opportunity to accelerate that. But we want to stay conservative on the outset and really update our projections and guidance to you as we execute on those projects in that way.

And is there anything on the supply chain side of things that is problematic at this point, or has that moderated to a level that it's not an issue anymore?

No. In terms of acquiring equipment, there's been a little bit of a lead time effect, but most of that has dissipated and that there's plenty of opportunity to get the equipment that we need to build out our project. So nothing material there that we're seeing right.

Great, thanks. You know, shifting gears, from conversations with investors, liquidity in your stock remains a challenge, you know, even for those that are positive on the story and the valuation. Can you talk about what options you may have to address current liquidity in the stock? What sort of, you know, timeline might be possible? And, you know, how much of a focus is this? Or is this an issue where we just have to, you know, grow the EBITDA and the earnings and move things along that way.

Yeah, this is Adam here and I will say we hear similar questions when we have our investor meetings where people are really positively disposed to RNG and really like the Opal story and maybe would like to see more liquidity in our stock. I'll answer it a couple of different ways. you know, we don't need to do any primary share issuance. We've got enough liquidity in place and capital raising plans in place to continue to execute on our development pipeline. So there's no need to raise capital from a primary share issuance. From a secondary share issuance, you know, I'd say like most management teams, we feel our Our shares offer a compelling value here, so I don't know if there's a lot of interest currently on a secondary, and we don't have any immediate plans in place. We do think that there could be some opportunities to increase the float with smaller tuck-in acquisitions and perhaps increase liquidity and float that way. We are going to continue to ratchet up time spent. with investors and analysts and thinking about, you know, an analyst or investor day later in the year. So we will be visible and try and increase the visibility of Opal Fuel, but we don't currently have anything on the table for either a primary or a secondary.

Okay, great. Thank you.

Thank you. One moment, please. Our next question comes from the line of Matthew Blair of Tudor Pickering and Holt Company. Your line is open.

Hey, good morning, Adam, John, and Ann. Hope you're doing well. Could you share any thoughts on how Q1 is progressing? Seems like you would have some volume and potentially margin benefit from the startup of the biotown dairy, but then headwinds from lower D3 RIN prices as well as rolling off the locked in D3 RINs from last year. Does that sound about right? Is there anything else that we should be thinking about in regards to Q1? And at this stage, can you say if Q1 EBITDA is likely to be higher or lower quarter over quarter?

So, I can take that, and then others can jump in. So, obviously, you know, we're just reporting 2022 here, and we've given initial guidance. We'll be reporting Q1 in the, you know, call it next, I don't know, six weeks or so. But I think, you know, everything that you said there, I generally agree with. I think from our perspective, we are seeing gas production going in the right direction, right? It's growing. The caveat, there are two caveats. First of all, by our town, we are a minority owner. So, you know, we will see an equity pickup in our results for that, but it's not under our direct control. The second piece is, as I highlighted in my comments, You know, from a RIN and LCFS perspective, we anticipate in the first half of the year that we'll be, I'll call it minimal sellers, right? You know, just enough to manage the business. But clearly we see value. So our results will be skewed to the latter half of 23. So I think it's important to keep those two things in mind, right? And we will continue, you know, as I commented, to show the value of both steward gas and unsold environmental attributes as an adjustment to adjusted EBITDA, again, so people can see kind of what's pending, right, to be monetized, again, hopefully in the latter half of the year.

Yeah, I just want to follow up. This is Adam again. You know, it's really key for us to do that, to be able to match current period expenses versus what the value of the gas that we're producing, holding in inventory, and credits that we're minting and holding in inventory. We do report current period expenses for all of that gas that is produced in credits that are in inventory.

So just to follow up on that, Ann, when you said that results will be skewed to the back half of the year, when you said that initially, I took it to mean that your cash flows would be skewed to the back half of the year, but it sounds like you're saying that actual EBITDA would be skewed. Is that the right interpretation?

No. Again, we will be adding back the value in adjusted EBITDA, so we'll be reporting it, you know, in each quarter. So to your point, though, you know, cash will be skewed towards the latter half of the year. Yeah, and it will show up in lower revenues and lower net income.

Right, exactly. So when you report your gap in operating income, it will be lower in the first half than the second half once we plan on monetizing the balance of RINs and RNG that's in inventory. But from an adjusted EBITDA basis, it gets smoothed out.

Correct. And Matthew, I'll just add as well. Good morning. Nice to hear you on the call here. that with the Emerald project coming online mid-year, you'll see a substantial pickup in gas, in revenues, income, and EBITDA in the second half of the year as well from that.

Okay. That's helpful. And then the follow-up is just on the renewable power portfolio. It looks like there was an asset where your – I guess your contract wasn't renewed. Could you talk a little bit about that? Do you view that as a risk going forward?

Thank you. So, Matthew, John, again, I'll take that. I'll start this one off. Yeah, that was a project that we had long-term gas rights on. It was with a municipality, and the municipality, the gas rights ended pursuant to its term, and the municipality decided that they wanted to take those gas rights back, remove the power project, and look at the future later in life. It didn't involve anything to do with our project other than the fact that they are I guess, keeping their options open in terms of what their future might look.

And I'd say when you look across the portfolio, I'm just looking at John here, and we can follow up. I don't think we have any gas rights expiring. Nope.

Nothing in the near future.

Very helpful. Thank you.

And I'll add to that that when we do renewable natural gas projects and we build these, we get gas rights that are generally 20 years or longer with regard to those projects. So that's kind of a legacy renewable power feature, but we don't see it affecting other projects going forward in the near future. Yeah, I would really consider that one a one-off.

Thank you. One moment, please. Our next question comes from the line of Martin Malloy of Johnson Rice. Your line is open.

Good morning. I had a question on the cost side and relative to slide seven with the revenue for landfill gas, dollar per MMVTU. Could you maybe, and I realize with projects coming online, there's a lot of movement around the cost side, but can you maybe talk about where you expect to get to on the cost side in terms of dollar per MMVTU and the path towards getting there?

Yeah, this is Adam here. I'd say in general, although there were some escalated utility costs in 2022 and some other general inflationary pressures, our cost per MMBTU has not changed materially from what we've talked about previously. You know, we're still in the high single digits for our cost of production on landfill and call it somewhere in the low 20s on dairy. You know, we are always trying to drive efficiencies in our business and, you know, trying to maximize output and productivity of our plants. So, I'm not going to give you a specific target on where we think we can get costs down to, but, you know, we don't see a lot of material changes from where we've been and what we've discussed historically.

Thank you. I'll turn it back.

Thank you. One moment, please. Our next question comes from the line of William Gripping of UBS. Your line is open.

Great. Thanks. Good to speak with you all, and thanks for taking the questions. I appreciate all the color that you've already provided. I just have a couple, maybe more modeling questions here. But first, could you provide any color on the SG&A that you have embedded in the adjusted eBuddy guide for 2023?

This is Anne.

So, I don't think that we want to get to the level of detail of actually guiding, you know, guiding there. As you can imagine, you know, first year public company, I think we've tried to model out something that's, you know, appropriate and reasonable, but I don't think we want to get to that level of detail in our guidance.

Fair enough. All right. So, just pivoting to Anne.

the erin pathway just what are the the key developments that you need there to or expect uh to come there to gain clarity on how impactful that could be for opal yeah so this is this is adam here i say from a super high level we have to see whether or not it's included in the final rule as a pathway um you know right now they propose that you could use renewable power to be used as electricity as a transportation fuel so First order of business, are they gonna include that as a pathway here in June? Second order of business, and they may delay it, quite frankly. I think there's a lot of push and a lot of momentum behind including it, but the industry had a lot of questions around some of the mechanics that we need some clarity around, which is, what is the equivalency value? How many RINs are they gonna assign per megawatt that you produce? There's a little bit of mechanics around who the RIN generator will be. I don't think that necessarily impacts the economics so much, but people have a lot of questions over whether or not the auto OEM will be the generator of that RIN credit, and then who needs to be assigned on the pathway, which is, you know, that entire value chain of the eRIN for how the economics are going to get split up. So we think it's all potentially really positive, and there's also the potential to take your RNG from a pipeline and potentially create some events. So there's a lot of little nuances in it, but those are just to give you a flavor, some of the high level of what we're waiting for some clarity on.

All right. Appreciate it. That's all for me.

Thank you. One moment, please. Our next question comes from the line of Ryan Fink. A B-Rally line is open.

Hey, good morning, guys. Maybe I'll just sneak one in here. Going back to your comments around the multi-year RBO allowing for the potential of longer-term contracts, are those discussions happening today, and what would be your expected timeframe for entering into contracts like that?

Yeah, they're happening internally. They're happening with other market participants. I wouldn't say they've begun in real earnest yet with obligated parties. You know, we would anticipate those kinds of things to potentially start happening once the volumes are set. So that's something that we can report back on in the back half of the year.

Gotcha. Thanks. I'll turn it back.

Thank you. One moment, please. Our next question comes from the line of Craig Sheree of Tuoi Brothers. Your line is open.

Hi. Thanks for taking the questions. So first, maybe you can help me understand. If there's a biogas-to-power project that has a long-term PPA offtake, how does the ERINs work in that case? Let's say there's three to five years left on the PPA. Does the offtaker own that, or how does all that work?

Thanks for your question. This is John. So it varies. Some projects assign the carbon value either through RECs or otherwise to the power purchaser, and some do not. And in all cases where it has been assigned and the project is potentially a material participant in this market, we've commenced discussions with counterparties to substitute third-party-acquired RINs for the renewable attributes from our gas that will enable us to then sell the eRINs. So it's kind of a mixed bag out there, but I would say that we see a pathway to getting the majority of our renewable power into the eRINs

great um and then uh you you talked a couple times on this call about you know the the hiccup or reassessment of landfill operators last year that seems to be thawing allowing projects to move forward or at least contracting um if they were reassessing the underlying value of rng uh in their footprint that does that mean for new contracts and projects that perhaps higher splits have to be afforded to the site host?

I think all of that took place over the course of the last year or two and that people settled out as to what the right splits ought to be. I think that the value has shifted somewhat as some of that has been recognized, but most of that has taken place And we'll still see some dynamics out there, but I think that the pathway is open for getting more contracts finalized and signed and putting those projects into construction in the near future. Yeah, this is Adam here.

Just a couple of quick follow-ups there. One is we haven't seen any real changes in royalty rates that change sort of how bill multiples look for us and that sort of thing. So that's positive. And just to John's point there, we really do feel like we've gotten some good visibility and traction in getting these things across the finish line. And it's always a little surprising for how long documentation can take on a lot of these things. But, you know, we feel really good about where we're at today versus maybe six months ago in terms of moving those things through documentation.

Thanks. And really quick modeling question. If you're banking RINs to sell potentially higher prices after the firm RVO in the second half, How do you assess the pricing at which you report that in your adjusted EBITDA?

So I think we shared with you kind of what our assumptions were in terms of guidance. And as we get through each quarter, when we come to Q1, we'll probably make an assumption around kind of what that pricing looks like for the value at that time and provide an updated sensitivity. in terms of what market prices are.

Okay. Thank you.

Thank you. One moment, please. Our next question comes from the line of Derek Whitfield of FIFO. Your line is open.

Again, wanted to ask a follow-up on the last question and ask you really to elaborate on the competitive landscape more broadly. As you're aware and have noted, we've observed unprecedented levels of M&A for R&G assets over the last year with an increased focus more recently in the downstream side based on the BP Travel Center's potential acquisition. In your view, what do these transactions imply about the value of your business and how do they alter the competitive and operating environment for you? Seemingly, there are less agile guys at the table right now versus past periods.

This is Adam here. I actually thought that was a pretty interesting acquisition that BP made there. I think the read-through is something that we've talked about in the past about being vertically integrated and where pricing power could be for alternative fuels into the class A industry. You know, from my perspective, and we've seen a couple of these other smaller private downstream players as well get acquired by other major EMTs. We feel it's a little bit of a validation of sort of what we've put together here and grown organically. And, you know, I think there's some interesting opportunities as a vertically integrated player. We'll see how that plays out. Historically, deployment in this industry has really been sort of a behind the fence kind of model and dedicated fueling. We think that 15 liter engine is going to open up some new opportunities with some trucking and logistics fleets and maybe there could be ways to look at how future deployments could be. And we have seen, obviously, a lot of M&A activity on just the up-street production side as well. So we feel like it's an interesting read-through for what we put together here at Opal Fuels.

And if I could just say, Derek, that in general, the pendulum continues to move towards decarbonization and the value of renewable fuels continues to be central. to those strategic players and now to financial players as well. And so we continue to see a lot of interest as I was saying earlier, I feel like the country and the world is kind of leaning into this sector and you continue to see it quarter after quarter as companies are making moves towards that decarbonization, how they're gonna play in that in the future. It's a tough decision for a lot of people to make, and then to find the right opportunities of companies that are growing and special to the space really provides that opportunity.

Thanks, Adam and John, for your comments.

Thanks, sir.

Thank you. I'm showing no further questions at this time. Let's turn the call back over to Adam Kimora for any closing remarks.

Thank you very much for your participation in Opal Fuel's full year 2022 earnings call. We look forward to continued engagement and dialogue. Have a great day.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day. You music music Thank you. Global Fuels Fourth Quarter and Full Year 2022 Earnings Results Conference Call. At this time, all participants are on a listen-only mode. After the speaker's presentations, there will be a question and answer session. To ask a question at that time, please press star 11 on your telephone. As a reminder, today's conference call is being recorded. I will now turn the conference to your host, Mr. Todd Firestone, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to the Opal Fuels fourth quarter and full year 2022 earnings conference call. With me today are co-CEOs Adam Kimora, Jonathan Moore, and Anne Anthony, Opal's chief financial officer. Opal Fuels released financial and operating results for the fourth quarter and 12 months year-to-date of 2022 yesterday afternoon, and those results are available on the investor relations section of our website at opalfuels.com. The presentation and access to the webcast for this call are also available on our website. After completion of this call, a replay will be available for 90 days. Before we begin, I'd like to remind you that our remarks on this call, including answers to your questions, contain forward-looking statements, which involve risks, uncertainties, and assumptions. Forward-looking statements are not a guarantee of performance, and actual results could differ materially from what is contained in such statements. Several factors that could cause or contribute to such differences are described on slide two and three of our presentation. These forward-looking statements reflect our views as of the date of this call, and Opal Fuels does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date of this call. Additionally, this call will contain discussion of certain non-GAAP measures, including but not limited to adjusted EBITDA, a definition of non-GAAP measures used, and a reconciliation of these measures to the nearest GAAP measure included in the appendix of the release and presentation. Adam will begin today's call by providing an overview of the fourth quarter results, recent highlights, and the update on our strategic and operational priorities. John will then give a commercial and business development update, after which Ann will review financial results and full year 2023 guidance. We'll then open up the call for questions. And now, I will turn the call over to Adam Kimura, co-CEO of Opal Fuels.

Thank you, Todd. Good morning, everyone, and thank you for being here for Opal Fuels' fourth quarter and year-end 2022 earnings call. 2022 was a remarkable year for Opal Fuels, filled with many achievements for our company, as well as positive developments for the R&G industry as a whole. We are proud of what we've accomplished, and we remain steadfast in our focus on executing on our plan. I'd like to highlight several points. First, we continue to execute on our strategic and operational priorities. We believe our integrated platform is a powerful model in delivering renewable, low carbon RNG to the marketplace. Strategically, our goal is to continue to grow our RNG production and to maximize the value of that RNG, which currently remains the U.S. transportation fuel market as the highest value distribution. Operationally, we remain committed to be the premier vertically integrated RNG company in the industry. one that excels at providing value to not only our shareholders, but also our customers and partners. Importantly, we think our visible and tangible growth profile is a differentiating factor in the marketplace. We grew our RNG output by more than a third this past year. As we disclosed in our 2023 outlook, we expect growth to accelerate this year by greater than 50% over 2022 to more than 3.4 million MMBTUs at the midpoint of our guidance. Our projects and construction remain on track, which provides visibility to accelerating production growth once again in 2024 from 2023. In addition to production, our advanced development pipeline continues to grow and mature. And as John will touch on later, we have seen some of the development delays from 2022 ease, and we expect to place at least 2 million MMBTUs of output capacity into construction in 2023. I want to touch on our vertical integration business model and our current views on environmental credit pricing. We continue to believe our business model both maximizes the value of our produced RNG and provides important flexibility and optionality in the future to capitalize on RNG tailwinds, both new offtake markets and public policy initiatives as those evolve and strengthen. The U.S. transportation fuel market continues to be the highest value offtake. averaging twice the value of fixed price contracts, and again, leave us the option in the future to explore new end markets and test incremental pricing power with fleet customers. We do get a lot of questions on this merchant model, and Ann will speak later about some of our business segments, fuel station services and renewable power, and the long-term contract and nature of those business segments, which mutes some of the volatility by remaining merchant on our RNG production. Having said that, let's dive into some of the recent dynamics in both D3 RIN pricing and LCFS credits. On D3 RIN dynamics, we see the recent drop in price being driven by the potential oversupply of cellulosic D3 RIN volumes in the proposed set rule introduced by the EPA in December of 2022, with rule finalization expected to occur in June of this year. This potential oversupply is driven by two factors. continued growth in RNG production capacity, and additional supply from the proposed eRIN pathway. It is important to note that Opal Fuels will see strong benefits from this eRIN pathway, as our existing renewable power segment will be able to participate and generate significant incremental RINs without investing new capital. We will be providing more clarity around this potential as the rules get finalized. On the demand side of D3 RINs, we remain optimistic that EPA RVO targets could be adjusted higher to account for both cellulosic supply additions as well as anticipated eRIN volumes as those rules become finalized. It is the clear intent of both the original RFS and proposed rule commentary to support and grow the cellulosic category. The original law stated the cellulosic D3 category was targeted to be 16 billion D3 RINs. and the EPA administration is meant to support growth up to that figure. With updated industry production actuals over the past six months and demonstrated new supply growth coming online, the EPA has the support to raise volumes and has opened the door for future reenactment of the waiver credit over the multi-year set period. It is important to remember why the law and EPA are so supportive of the cellulosic category. The source of this category of biofuels is capturing harmful methane emissions, the single most important thing we can do to combat climate change. Another interesting feature of the proposed set rule is the multi-year RVOs. We believe that feature may dampen volatility in the future and perhaps open up two- to four-year contracts for RINs now that obligated parties will have visibility into their volume obligations for a multi-year period. So from our perspective, we believe OPWL will ultimately create more value from existing and future projects from the eRIN pathway. And structurally, we may see new contracting opportunities from the multi-year RVOs. Given this outlook, we are currently limiting our 2023 RIN sales in the first half of the year as rules are finalized. And Anne will touch on later how that will roll through our financials and reporting. As you see in our guidance sensitivities, we have much less exposure to LCFS pricing. Our Sonoma project has an offtake contract with a floor of $100 per credit, and we have much less dairy production currently online versus landfill. On LCFS, though, we remain very optimistic on credit pricing and the direction that CARB has intimated it is heading to on proposed program changes to be finalized over the balance of 2023 for 2024. CARB is giving clear signals to the market they would like to encourage more investment by supporting pricing, which will likely include stronger compliance targets, creating incremental demand for LCFS credits starting next year. As we look to this year, we are introducing our 2023 adjusted EBITDA guidance, which we expect to range from $85 to $95 million. Our RNG production range from 3.2 to 3.6 million MMBTUs, and capital expenditures to range from $220 to $240 million. Anne will provide more detail, but we expect an $8 million change to 2023 adjusted EBITDA for every $0.25 gallon change in D3 RIN prices. We continue to benefit from substantial and broad-based developments in our industry. First, I'd like to provide some insight into how our thinking on the IRA has evolved over the last several months. While we still await the final guidance from Treasury, we are confident that the ITC provisions will apply to landfill RNG projects, thus encompassing nearly all of our in-construction and advanced development pipeline projects. While we are still determining the exact level of ITC benefit, we have been in advanced discussions with the appropriate advisors and counterparties to believe we will benefit significantly. Second, the 45Z credits are set to be impactful as well, and we expect clarity from Treasury in the coming months on that front. We expect to begin realizing these benefits in 2023 and see them growing in 2024 and throughout the next five years. 2023 is set to be a very good year for Opal Fuels. To some degree, a bit of a contrast from 2022. In 2022, we saw very good commodity environmental credit pricing, but saw some near-term headwinds in the development of our new project pipeline. In 2023, we have begun the year with lower near-term commodity and environmental credit pricing, but see the positive momentum beginning with our new project development, which is ultimately the long-term value driver of our business. With that, I'll turn it over to John. John?

Thank you, Adam. And good morning, everyone. I want to start out by saying that we are very focused on executing on our growth plans. We grew RNG production nearly 40% in 2022, and we expect to grow by more than 50% this year. Our in-construction portfolio's timing is progressing with a cadence that is in line with our expectations, and we think sets us up for accelerated growth into 2024. During 2022, our operating project portfolio increased from three to six projects, and now seven with the just completed biotown dairy project in Indiana. In 2022, we commissioned three landfill RNG projects, the Noble Road project in Ohio, our New River project in Florida, and the Pine Band project in Minnesota. These RNG projects represent 1.6 million MMBTU of nameplate RNG capacity. At all three of these landfill projects, gas production continues to increase as the trash volumes there increase. In addition to our operating projects, we currently have six RNG projects in construction with the Biotown Dairy RNG project having just entered operations, as we said. Of these six, we expect Emerald to go online in the next several months, Prince William in the fall, and Sapphire late in the year. Our two dairy projects we expect to be commissioned in early 2024 and the Northeast landfill later in 2024. As Adam mentioned, we expect production increases this year from our operating and in construction portfolio that are in line with our prior expectations with the 3.4 million MMBTU midpoint of production guidance being a 57 percent increase compared to RNG production in 2022. I want to pick up on what Adam mentioned earlier about development conditions easing. The good news is that the project development logjam is breaking, and conditions are improving in terms of moving projects forward compared with last year. Recall that we described how last year presented a number of challenges which tended to delay projects, landfill owners assessed the substantial market dynamics surrounding the value of their RNG resource. We provided some color on this topic on our third quarter call. Fast forward to today and we're already seeing improvements. We anticipated an acceleration of executed agreements for gas rights and for construction contracts and that this acceleration should translate into progressing projects through our advanced development pipeline more quickly and placing projects into construction as we progress through the year. Since we last reported, we've added over 0.8 million MMBTU of biogas to our advanced development pipeline, most of which is landfill, but also contains dairy and food waste projects. These projects are ones that we have qualified and that we reasonably expect can be into construction within the next 12 to 18 months. I'd also remind listeners that our advanced development pipeline does not include other earlier stage projects, which we continue to evaluate. As one of the largest RNG players in the sector, we tend to see most of the projects in the marketplace, all of which makes our pipeline dynamic and growing as we screen for the best opportunities. Our overall development funnel continues to see positive momentum and provides opportunities in excess of what qualifies as our advanced development pipeline. Opal Fuels is on track to commence construction of 53 fueling stations this year. Approximately 24 Opal Fuels owned stations and another 26 for third parties. Our overall RNG fuel dispensing volumes are expected to grow to approximately 55 million gallons this year from nearly 30 million gallons in 2022. In terms of our landfill gas to electric projects, Opal Fuels owns and operates 19 landfill gas to electric projects, representing about 124 megawatts of nameplate capacity. Recall that we began developing this portfolio 25 years ago, back in 1998. While six of these projects are candidates for conversion to RNG projects, the majority will remain electric projects. The EPA's recently proposed ERIN pathway stands to substantially increase the value of these projects, adding over $300 per megawatt hour gross to the existing values of these projects which has the potential to substantially increase the EBITDA from this business segment, depending on eRIN sharing and RIN price. We await updated guidance from the EPA on this topic, which is expected in the next few months. In the meantime, we are positioning ourselves to meet this market opportunity by continuing discussions with auto manufacturers who are proposed to create these eRINs through the EV data that they collect. As we highlighted early on, continued industry consolidation remains a significant tailwind for the RNG industry and certainly for Opal Fuels. We highlight recent upstream and downstream transactions that acted as additions to existing upstream infrastructure. We think those acquisitions tend to support how industry players are thinking about the value of integration. Some of the thinking driving this consolidation revolves around how demand expectations for RNG are expected to shift over the next several years. We're already seeing the beginning of this trend with demand growth from utilities in the form of RNG mandates for power generation, as well as increasing demand in European end markets. And many expect increasing demand coming from Asia, too. Separately, hydrogen producers are seeking low-carbon sources of renewable methane. and our portfolio production assets and fueling stations is well positioned to take advantage as that market moves forward. I'll now turn over the call to Ann to discuss our fourth quarter and year-end financial results. Ann?

Thank you, John, and good morning to all the participants on today's call. Last night, we filed our earnings press release, which detailed our quarterly and year-end results for the period ending December 31st, 2022. We anticipate filing our 10K in the next day or so. We saw strong growth in two of our three business segments, RNG Fuels and Fuel Station Services. The biggest driver of the quarter and year to date results is RNG Fuels, where we are starting to see the contribution from the RNG projects that have come online in 2022. We saw strong top line growth for the fourth quarter with revenue up 42% year over year, driven primarily by higher volumes produced and sold in the RNG fuel segment, as well as higher prices for brown gas and higher RINs under forward sales contracts we had entered into earlier in 2022. These benefits were partially offset by higher cost of sales due to electric utility costs and employee costs to support our growth, as well as higher royalties driven by higher energy revenues. G&A costs for the fourth quarter totaled $14 million, reflecting transaction and other costs, of which $10 million is considered one time. As a result, we generated net income in the fourth quarter of $32 million. For the full year 2022, before considering the impacts of preferred dividends, we achieved net income of $32.6 million, reflecting the standalone results for Opal Fuels LLC and ArcLake Clean Transition Corp 2, through the closing of our business combination last July 21st, plus the combined operations since then. Consistent with the results we saw in the fourth quarter, we benefited from pricing for environmental attributes that we had locked in via forward sales early in 2022, coupled with higher commodity prices. Looking at fourth quarter results compared to the third quarter, RNG production remained constant at 0.6 million MMBTUs, which represents volume net to Opal Fuels. Adjusted EBITDA was $20.1 million in the fourth quarter versus $25.5 million in the third quarter. The difference was primarily the result of the previously disclosed $3 million gain from the biotown debt associated with monetizing an in-the-money LCFS offtake contract. We also do experience some seasonality with some of our downstream fueling customers that see heavier volumes in the summer months, along with some timing associated with downstream fuel station construction contracts. We reported adjusted EBITDA of $20.2 million for the fourth quarter and $60.7 million for the 12 months ended December 31st, 2022. Adjusted EBITDA benefited from the same drivers we discussed above. higher environmental attribute pricing and commodity pricing offset by higher cost of sales and higher royalties. Fourth quarter adjusted EBITDA excludes several one-time items, including an unrealized loss related to our warrant exchange we completed in December. We also had a number of one-time costs related to going public that occurred during the fourth quarter and throughout 2022, which are excluded from adjusted EBITDA. As of December 31st, we had $167.8 million of outstanding borrowings, net of deferred financing costs, including $94.3 million of outstanding borrowings under term loan A, $28.5 million related to the remaining amount of the convertible note we had issued to ARIES for the acquisition of the Imperial and Green Tree projects in 2021, $22.1 million under the Sonoma loan, and $22.8 million related to our renewable power project financing. Our second term loan, which we closed in August, and which will finance a portfolio of RNG projects that are or shortly will be in construction, remains undrawn. As of December 31st, our liquidity position was $257.2 million, including $40.4 million of cash and cash equivalents, $36.8 million of restricted cash, $65 million of short-term investments, and $115 million of undrawn capacity under our term loans. We did recently draw down the final $10 million remaining under term loan one. I will also note that we did not have any exposure to either Silicon Valley Bank or Signature Bank, so we were spared any of the associated distraction that many other growth companies have been dealing with in the past few weeks. We expect these existing sources of liquidity to be sufficient to fund the company's construction and development capital needs for the next 12 months. We also anticipate that significant capital continues to be available for deployment in the RMG space. As a newly public company, we are very focused on how best to attract long-term investors. The OPWL team continues to believe that the most powerful way to do this is to deploy capital effectively and demonstrably grow earnings power. Before turning the call over for Q&A, I'd like to discuss our 2023 guidance. I will note that all guidance is current as of the published date, is subject to change, and we undertake no obligation to update it. As Adam noted earlier, we anticipate our full year 2023 adjusted EBITDA guidance range to be 85 million to 95 million, which is based on our expected range of RNG production in 2023 of 3.2 million to 3.6 million MMBTUs. Our adjusted EBITDA outlook is predicated on several key pricing assumptions, such as 225 per gallon for D3 RIN, $90 per ton LCFS credit price, and $3 for MMBTU brown gas. This quarter, we also included detail on the impact of commodity price changes to our full-year revenue and adjusted EBITDA outlook. We expect an approximately $8 million change, to 2023 adjusted EBITDA for each $0.25 per gallon change in D3 RIN price, a $1.4 million change for every $0.50 per MMBTU change in natural gas price, and a $400,000 change for every $10 per metric ton change in LCFS credit price. We are also updating our guidance for our portion of capital expenditures, excluding acquisition costs and net of any partner capital contributions to $220 million to $240 million. Our guidance does include some assumptions about the amount of ITC we can monetize in 2023, but we await, like everyone else who follows the RNG space, definitive guidance from Treasury, so our specific disclosure will be limited until we have that clarity. All of our IRA benefits will be recognized as income, likely in other incomes. but a reminder that these are real cash proceeds, not just cash tax avoidance. Hence, the recognition is income, which is expected to continue for at least five years. As a reminder, in accordance with GAAP ASC 606, we can only recognize revenue and the related earnings from environmental attributes once they are sold to, transferred, and accepted by the counterparty. We present the value of stored gas and unsold environmental attributes as part of adjusted EBITDA to allow the reader to understand the value and timing of production. We will continue to report our adjusted EBITDA with visibility as to stored gas and credits as we anticipate only selling a minority of our production in the first half of 2023 while we await EPA's updated RBOs. As a result, revenue and net income will be lower for the first half of the year. with 2023 results being skewed to the latter half of the year. Again, the EBITDA adjustment is intended to levelize this reporting and match inventory produced within the period costs are recognized. Finally, going forward for 2023, we will be presenting the revenues and expenses associated with our CNG tolling business in fuel station services. As noted earlier, Opal owns and operates a number of dispensing stations where we dispense the fuel and service the location for a customer. This activity had been reported in the RNG fuel segment in 2022 and prior periods. Going forward, we will include this in the fuel station services segment to better differentiate between the business activities and value drivers in the upstream and downstream portions of our business and facilitate easier comparisons to peers in our space. Adding to that, although we are labeled as a merchant play due to our exposure to the volatility inherent in environmental attributes, there are several earning streams in this business that dampen volatility. Our renewable power business is predominantly contracted under long-term power purchase agreements. The fuel station services business is profitable and growing, supported by 10-year contracts, both service and fuel supply agreements. as well as construction revenue from stations we build, which provides visibility out for roughly 12 months. The net effect of these two key business segments provides recurring stable earnings and cash flow, which dampens our overall corporate volatility from changing environmental credit markets. With that, I'll turn it back to John and Adam for concluding remarks.

Thank you, Anne. In closing, we believe our future is bright. We continue to add new projects and advanced projects through our development funnel into operations with accelerating growth in gas production and distribution. While the world around us continues to lean into this sector, we're continuing to carry forward OPWL's vertically integrated mission to build and operate best-in-class R&G facilities that deliver industry-leading, reliable, and cost-effective RNG solutions to displace fossil fuel and mitigate climate change. And with that, I'll turn the call over to the operator for Q&A. Thank you all for your interest in Opal Fuels.

Thank you. Again, ladies and gentlemen, if you'd like to ask a question, please press Star 1-1 on your telephone. Again, to ask a question, please press Star 1-1. Our first question comes from Derek Whitfield of Stiefel. Your line is open.

Probably Mr. Whitfield. Okay. Yes. Hello. Good morning, all, and congrats on a successful first year as a public company, certainly in a difficult operating environment. Thanks, Darren. Thanks. For my first question, I wanted to lean into your prepared comments on the progression of your backlog, both near-term and medium-term. For 2023, it appears that Emerald, Prince William, and Sapphire projects are all progressing along the schedule you laid out in Q3. Looking beyond 2023, Could you place some parameters on the amount of project capacity from your advanced development pipeline that could be placed in production in 2024 based on the improving operating conditions you're experiencing? Good morning, Derek.

Sure.

Yeah, so we have an advanced development pipeline of a little over 8 million MMBTUs of main plate capacity of gas available. And as we continue into 2024, we see our dairy projects and the Northeast landfill project that we placed into construction last year coming online. Because of a gap in projects going into construction, there will be fewer coming online next year beyond that. But the projects that we placed into construction this year will go online in about 18 months or so would be your average construction time frame from commencement of construction until you start seeing the gas production. Could be a little faster, could be a little bit slower. So we'll see gas from the projects that are going online this year continue to increase our output. during 2023 and 2024 as those projects come online. And then we'll see the projects putting into construction this year start to contribute during the really late 2024, 2025 timeframe.

Yeah, the only thing I would add there is obviously we'll have a full year of production in 24 on the Emerald project that goes in. in a couple of months. And you'll also get a full year output from the two in the later half of this year. And that's really visible growth and accelerates production from 23 into 24.

Terrific, Keller. And then as my follow-up, I wanted to focus on the implications of the IRA to your business. Referencing slides 13 and 14, you arguably have more optionality in your portfolio than ever before as a result of the IRA. As you assess your RNG, ERIN, and hydrogen opportunities, how does the ERIN pathway impact your view on the allocation of capital between RNG and electricity with the understanding that time is likely your friend based on the growth of EVs relative to landfill gas? And then more specifically for 2023 guidance, could you comment on the degree of ITC embedded in your projections?

Yeah, I'll let Anne handle the ITC one first, and then I'll talk a little bit about some of the regulatory stuff happening, both in terms of IRA and even Catholic.

Yeah, thanks, Derek. It's Anne. So, as I had commented, you know, I think given the fact that we're still waiting for additional guidance from Treasury, which we expect to come most likely in Q2, we're being a little circumspect in terms of the specific amounts and details of what we've included in adjusted EBITDA for ITC. I think, you know, we are making some underlying assumptions, obviously, about the projects that are in construction and that will COD this year. But beyond that, you know, I think at this point we're not really ready to disclose much more than that.

Yeah, and as far as some of the other, this is Adam here, as far as some of the other public policy stuff that we see happening, you know, in addition to the ITC, which we'll get some clarity on, we're also expecting in 2023 to get some clarity around 45Z calculations and how carbon intensity scores may be allocated. You know, we think that's going to be really impactful specifically for, you know, the heavy negative CI kind of gap, but we need to see a little bit more clarity to really get a better understanding on that. The eRIN pathway we think is really interesting for our business and, you know, opens up all sorts of incremental profitability opportunities on our existing landfill gas to electric projects and how we think about some of the new project development and what kind of opportunities that may open up. And, you know, it is a little uncertain in the timing of when they may finalize that rule. The EPA has received a number of comments back in February, so we'll see whether or not they're going to give back clarity in June when we do expect, you know, perhaps a re-look at the RVO volume. whether or not that's going to include finalized rules on the ERINs or that may slip into later in 2023. You know, as we think about it from a capital perspective on what makes an RNG project versus a landfill gas electricity project, we like having the optionality for all these new end markets that are opening up that you mentioned, whether or not be hydrogen, or quite frankly, a lot of export markets that are opening up. So we like the idea if we can see good risk-adjusted returns on capital for an RNG project to continue to deploy capital and have that flexibility of offtake, whether it be new fixed voluntary markets or strengthening voluntary markets. So we see it as a big additive to our business overall. And on the existing landfill gas electric projects, obviously that would be incremental profitability. without having to invest new capital. So, you know, we're excited about the prospects for it, and we'll see, you know, the timing for when they finalize that rule.

That's great. Thanks for your time and comments.

Thank you. One moment, please. Our next question comes from the line of Ryan Todd of Piper Stanley. Your line is open.

Great, thanks.

Congrats on the result. And let me... I apologize that I conflict and missed some of your earlier comments, so I hope, I'm not sure if you addressed some of this earlier in the call, but it's been a challenging stretch for many in the RNG industry in terms of project execution, getting volumes delivered on time and budget. What have been the biggest challenges for you on the project execution side, both on dairy and landfill, and are those things improving? Can you talk about how maybe parts of the supply chain and your ability to execute on your significant backlog is improving going forward and what has improved, if anything?

Hey, good morning, Ryan. This is John Moore. I'll start this one off. I think we reported last quarter that there was a a slowdown in execution of contracts and movement through the pipeline as landfills realized the value of the RNG inherent in their landfills. And each of the major landfills and many of the smaller ones took the opportunity to reassess how they wanted to approach that value proposition. So that resulted in a bit of delay, but I think they're through that process, and we're seeing a lot of movement through our advanced development pipeline and progress there. So, you know, conservatively, we think that we'll put 2 million MMVTU into construction this year. Our overall pipeline, we've reported at 8 million. We think there's great opportunity to accelerate that. But we want to stay conservative on the outset and really update our projections and guidance to you as we execute on those projects in that pipeline.

And is there anything on the supply chain side of things that is – that's problematic at this point, or has that moderated to a level that it's not an issue anymore?

No. In terms of acquiring equipment, there's been a little bit of a lead time effect, but most of that has dissipated, and that there's plenty of opportunity to get the equipment that we need to build out our project. So nothing material there that we're seeing right.

Great. Thanks. Shifting gears, from conversations with investors, liquidity in your stock remains a challenge, even for those that are positive on the story and the valuation. Can you talk about what options you may have to address current liquidity in the stock? What sort of timeline might be possible? And how much of a focus is this? Or is this an issue where we just have to... grow the EBITDA and the earnings and, you know, move things along that way.

Yeah, this is Adam here. And I will say we hear similar questions when we have our investor meetings where, you know, people are really positively disposed to RNG and really like the Opal story and maybe, you know, would like to see more liquidity in our stock. I'll answer it a couple of different ways. One is, you know, we don't need to do any primary share issuance. We've got enough liquidity in place and capital raising plans in place to continue to execute on our development pipeline. So there's no need to raise capital from a primary share issuance. From a secondary share issuance, you know, I'd say, like most management teams, we feel our Our shares offer a compelling value here, so I don't know if there's a lot of interest currently on a secondary, and we don't have any immediate plans in place. We do think that there could be some opportunities to increase the float with smaller tuck-in acquisitions and perhaps increase liquidity and float that way. We are going to continue to ratchet up time spent. with investors and analysts and thinking about, you know, an analyst or investor day later in the year. So we will be visible and try and increase the visibility of Opal Fuel, but we don't currently have anything on the table for either a primary or a secondary.

Okay, great. Thank you.

Thank you. One moment, please. Our next question comes from the line of Matthew Blair of Tudor Pickering and Holt Company. Your line is open.

Hey, good morning, Adam, John, and Ann. I hope you're doing well. Could you share any thoughts on how Q1 is progressing? It seems like you would have some volume and potentially margin benefit from the startup of the biotown dairy, but then headwinds from lower D3 RIN prices as well as rolling off the locked in D3 RINs from last year. Does that sound about right? Is there anything else that we should be thinking about in regards to Q1? And at this stage, can you say if Q1 EBITDA is likely to be higher or lower quarter over quarter?

So I can take that and then others can jump in. So obviously, you know, we're just reporting 2022 here and we've given initial guidance. We'll be reporting Q1 in the, you know, call it next, I don't know, six weeks or so. But I think, you know, everything that you said there, I generally agree with. I think from our perspective, we are seeing gas production going in the right direction, right? It's growing. The caveat, there are two caveats. First of all, by our count, we are a minority owner. So, you know, we will see an equity pickup in our results for that, but it's not under our direct control. The second piece is, as I highlighted in my comments, from a RIN and LCFS perspective, we anticipate in the first half of the year that we'll be, I'll call it minimal sellers, right? Just enough to manage the business, but clearly we see value. So our results will be skewed to the latter half of 23. So I think it's important to keep those two things in mind. And we will continue, as I commented, to show the value of both stored gas and unsold environmental attributes as an adjustment to adjusted EBITDA, again, so people can see kind of what's pending, right, to be monetized, again, hopefully in the latter half of the year.

Yeah, I just want to follow up. This is Adam again. You know, it's really key for us to do that, to be able to match current period expenses versus what the value of the gas that we're producing, holding in inventory, and credits that we're minting and holding in inventory. We do report current period expenses for all of that gas that is produced in credits that are in inventory.

So just to follow up on that, Ann, when you said that results will be skewed to the back half of the year, when you said that initially, I took it to mean that your cash flows would be skewed to the back half of the year, but it sounds like you're saying that actual EBITDA Would be skewed. Is that the right interpretation?

No, again, we will be adding back the value in adjusted EBITDA. So we'll be reporting it, you know, in each quarter. So to your point, though, you know, cash will be skewed towards the latter half of the year. Yeah, and it will show up in lower revenues and lower net income.

Right, exactly. So when you report your gap in operating income, it will be lower in the first half than the second half once we plan on monetizing the balance of RINs and RNG that's in inventory. But from an adjusted EBITDA basis, it gets smoothed out, correct?

And Matthew, I'll just add as well, good morning, nice to hear you on the call here. that with the Emerald project coming online mid-year, you'll see a substantial pickup in gas, in revenues, income, and EBITDA on the second half of the year as well from that.

Okay. That's helpful. And then the follow-up is just on the renewable power portfolio. It looks like there was an asset where your – I guess your contract wasn't renewed. Could you talk a little bit about that? Do you view that as a risk going forward? Thank you.

So, Matthew, John, again, I'll take that. I'll start this one off. Yeah, that was a project that we had long-term gas rights on. It was with a municipality, and the municipality, the gas rights ended pursuant to its term, and the municipality decided that they wanted to take those gas rights back, remove the power project, and look at the future later in life. It didn't involve anything to do with our project other than the fact that they are, I guess, keeping their options open. in terms of what their future might look like.

And I'd say when you look across the portfolio, I'm just looking at John here, and we can follow up. I don't think we have any gas rights expiring. Nope.

Nothing in the near future.

Very helpful. Thank you.

And I'll add to that that when we do renewable natural gas projects and we build these, we get gas rights that are generally 20 years or longer with regard to those projects. So that's kind of a legacy renewable power feature, but we don't see it affecting other projects going forward in the near future. Yeah, I would really consider that one a one-off.

Thank you. One moment, please. Our next question comes from the line of Martin Malloy of Johnson Rice. Your line is open.

Good morning. I had a question on the cost side and relative to slide seven with the revenue for landfill gas, dollar per MMBTU. Could you maybe, and I realize with projects coming online, there's a lot of movement around the cost side, but can you maybe talk about where you expect to get to on the cost side in terms of dollar per MMBTU and the path towards getting there?

Yeah, this is Adam here. I'd say in general, although there were some escalated utility costs in 2022 and some other general inflationary pressures, our cost for MMBTU has not changed materially from what we've talked about previously. You know, we're still in the high single digits for our cost of production on landfill and call it somewhere in the low 20s on dairy. You know, we are always trying to drive efficiencies in our business and, you know, trying to maximize output and productivity of our plants. So I'm not going to give you a specific target on where we think we can get costs down to. But, you know, we don't see a lot of material changes from where we've been and what we've discussed historically.

Thank you. I'll turn it back.

Thank you. One moment, please. Our next question comes from the line of William Gripping of UBS. Your line is open.

Great. Thanks. Good to speak with you all, and thanks for taking the questions. I appreciate all the color that you've already provided. I just have a couple, maybe more modeling questions here. But first, could you provide any color on the SG&A that you have embedded in the adjusted eBuddy guide for 2023?

This is Anne.

So, I don't think that we want to get to the level of detail of actually guiding, you know, guiding there. As you can imagine, you know, first year public company, I think we've tried to model out something that's, you know, appropriate and reasonable, but I don't think we want to get to that level of detail in our guidance.

Fair enough. All right. So, just pivoting to Anne.

the erin pathway just what are the the key developments that you need there to or expect uh to come there to gain clarity on how impactful that could be for opal yeah so this is this is adam here i say from a super high level we have to see whether or not it's included in the final rule as a pathway um you know right now they propose that you could use renewable power to be used as electricity as a transportation fuel so First order of business, are they going to include that as a pathway here in June? Second order of business, and they may delay it, quite frankly. I think there's a lot of push and a lot of momentum behind including it, but the industry had a lot of questions around some of the mechanics that we need some clarity around, which is what is the equivalency value? How many RINs are they going to assign per megawatt that you produce? There's a little bit of mechanics around who the RIN generator will be. I don't think that necessarily impacts the economics so much, but people have had a lot of questions over whether or not the auto OEM will be the generator of that RIN credit, and then who needs to be assigned on the pathway, which is that entire value chain of the eRIN for how the economics are going to get split up. So we think it's all potentially really positive, and there's also the potential to take your RNG from a pipeline and potentially create some events. So there's a lot of little nuances in it, but those are just to give you a flavor, some of the high level of what we're waiting for some clarity on.

All right. Appreciate it. That's all for me.

Thank you. One moment, please. Our next question comes from the line of Ryan Fink. A B-Rally line is open.

Hey, good morning, guys. Maybe I'll just sneak one in here. Going back to your comments around the multi-year RBO allowing for the potential of longer-term contracts, are those discussions happening today, and what would be your expected timeframe for entering into contracts like that?

Yeah, they're happening internally. They're happening with other market participants. I wouldn't say they've begun in real earnest yet with obligated parties. You know, we would anticipate those kinds of things to potentially start happening once the volumes are set. So that's something that we can report back on in the back half of the year.

Gotcha. Thanks. I'll turn it back.

Thank you. One moment, please. Our next question comes from the line of Craig Sri of Tuoi Brothers. Your line is open.

Hi. Thanks for taking the questions. So first, maybe you can help me understand. If there's a biogas-to-power project that has a long-term PPA offtake, how does the ERINs work in that case? Let's say there's three to five years left on the PPA. Does the offtaker own that, or how does all that work?

Thanks for your question. This is John. So it varies. Some projects assign the carbon value either through RECs or otherwise to the power purchaser, and some do not. And in all cases where it has been assigned and the project is potentially a material participant in this market, we've commenced discussions with counterparties to substitute third-party acquired RINs for the renewable attributes from our gas that will enable us to then sell the eRINs. So it's kind of a mixed bag out there, but I would say that we see a pathway to getting the majority of our renewable power into the eRINs

Great. And then you talked a couple times on this call about the hiccup or reassessment of landfill operators last year that seems to be thawing, allowing projects to move forward, or at least contracting. If they were reassessing the underlying value of RNG in their footprint, does that mean for new contracts and projects that perhaps higher splits have to be afforded to the site host?

I think all of that took place over the course of the last year or two and that people settled out as to what the right splits ought to be. I think that the value has shifted somewhat as some of that has been recognized, but most of that has taken place And we'll still see some dynamics out there, but I think that the pathway is open for getting more contracts finalized and signed and putting those projects into construction in the near future.

Yeah, this is Adam here. Just a couple of quick follow-ups there. One is we haven't seen any real changes in royalty rates that change sort of how bill multiples look for us and that sort of thing. So that's positive. And just to John's point there, we really do feel like we've gotten some good visibility and traction in getting these things across the finish line. And it's always a little surprising for how long documentation can take on a lot of these things. But, you know, we feel really good about where we're at today versus maybe six months ago in terms of moving those things through documentation.

Thanks. And really quick modeling question. If you're banking RINs to sell potentially higher prices after the firm RVO in the second half, How do you assess the pricing at which you report that in your adjusted EBITDA?

So I think we shared with you kind of what our assumptions were in terms of guidance. And as we get through each quarter, when we come to Q1, we'll probably make an assumption around kind of what that pricing looks like for the value at that time and provide an updated sensitivity. in terms of where market prices are.

Okay. Thank you.

Thank you. One moment, please. Our next question comes from the line of Derek Whitfield of FIFO. Your line is open.

Again, wanted to ask a follow-up on the last question and ask you really to elaborate on the competitive landscape more broadly. As you're aware and have noted, we've observed unprecedented levels of M&A for R&G assets over the last year with an increased focus more recently in the downstream side based on the BP Travel Center's potential acquisition. In your view, what do these transactions imply about the value of your business and how do they alter the competitive and operating environment for you? Seemingly, there are less agile guys at the table right now versus past periods.

Yeah, so this is Adam here. I actually thought that was a pretty interesting acquisition that BP made there. And, you know, I think the read-through is, you know, something that we've talked about in the past about being vertically integrated and where price and power could be for alternative fuels into the, you know, sort of class A industry. You know, from my perspective, and we've seen a couple of these other smaller private downstream players as well get acquired by other major EMTs. We feel it's a little bit of a validation of sort of what we've put together here and grown organically. And, you know, I think there's some interesting opportunities as a vertically integrated player. We'll see how that plays out. Historically, deployment in this industry has really been a sort of a behind-the-fence kind of model and dedicated fueling. We think that 15-liter engine is going to open up some new opportunities with some trucking and logistics fleets, and maybe there could be ways to look at how future deployments could be. You know, and we have seen, you know, obviously a lot of M&A activity on just the upstream production side as well. So, you know, we feel like it's an interesting read through for what we put together here at Opal Fuels.

And if I could just say, Derek, that in general, the pendulum continues to move towards decarbonization and the value of renewable fuels continues to be central. to those strategic players and now to financial players as well. And so we continue to see a lot of interest as I was saying earlier, I feel like the country and the world is kind of leaning into this sector and you continue to see it quarter after quarter as companies are making moves towards that decarbonization, how they're gonna play in that in the future. It's a tough decision for a lot of people to make, and then to find the right opportunities of companies that are growing and special to the space really provides that opportunity.

Thanks, Adam and John, for your comments.

Thanks, sir.

Thank you. I'm showing no further questions at this time. Let's turn the call back over to Adam Kimora for any closing remarks.

Thank you very much for your participation in Opal Fuels' full year 2022 earnings call. We look forward to continued engagement and dialogue. Have a great day.

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.