OPAL Fuels Inc.

Good day and thank you for standing by. Welcome to the Opal Fuels first quarter 2025 earnings results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today. Todd Firestone, please go ahead.

Thank you, and good morning, everyone.

Welcome to the Opal Fuels first quarter 2025 earnings conference call. With me today are co-CEOs Adam Kimora, John Kimora, and Qazi Hassan, Opal's chief financial officer. Opal Fuels released financial and operating costs for the first quarter 2025 yesterday afternoon. And those results are available on the investor relations section of our website at opalfuels.com. Presentation and access to the webcast for this call are also available on our website. After completion of today's call, a replay will be available for none of you. Before we begin, I'd like to remind you that our remarks, 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 slides 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. Initially, this call will contain discussion of certain non-GAAP measures. A definition of non-GAAP measures used in a reconciliation of these measures to the nearest GAAP measure is included in the appendix of the release and presentation. Adam will begin today's call by providing an overview of the Corps' results and recent highlights and an update on our strategic and operational priorities. John will then give a commercial and business development update, after which Kazi will review financial results. We'll then open the call for questions. And now I'll turn the call over to Adam Camara, co-CEO of Opal Fuels.

Thanks, Todd. Good morning, everyone, and thank you for participating in Opal Fuel's first quarter 2025 earnings call. First quarter results were in line with expectations. Performance across our business segments were solid, and we continue to execute on our strategic and operational objectives. First quarter adjusted EBITDA was $20.1 million, over 30% higher compared to the same period last year. Our first quarter 2025 fuel station services segment EBITDA was approximately $12.5 million, 80% higher versus the first quarter of 2024. R&G fuel production for the quarter was 1.1 million MMBTUs, up nearly 40% versus the same period last year and in line with our expectations. Our fuel station services segment continues to exhibit strong growth. As we often discuss, the strategic value of our vertical integration, which maximizes the value of RNG that we produce and makes us an attractive partner for new RNG business development opportunities, this segment also provides steady, predictable, and growing cash flow that improves economic returns to the overall business and dampens commodity price volatility. We are maintaining our full-year guidance set out in March and expect to see sequential quarterly RNG production growth throughout the year as our newer projects continue to ramp. We also anticipate continuing growth at our existing landfill RNG facilities. While we are pleased with our execution, we are also cognizant of the uncertain macro and regulatory environments. Although we don't expect our business to be materially impacted by tariffs, Recent trade policy uncertainties are causing delays in investment decisions in our customers and partners, including some of our logistic and trucking fleet customers. These delays are not material enough for us to change our guidance regarding fuel station services EBITDA growth for the year, but we are not yet seeing the acceleration of CNG-RNG adoption for heavy-duty trucking. That said, we are very encouraged by numerous factors supporting long-term adoption. Our view is driven by product availability of the Cummins 15-liter engine, with Freightliner now moving into production and delivery. In addition, a new regulatory outlook has recognized the challenges of zero-emission vehicles for the heavy-duty market. This significantly expands the potential for adoption of RNG CNG-powered heavy-duty trucking. While this regulatory shift has positive implications for the continued growth of fuel station services, We are still waiting for regulatory clarity for the RNG fuel segment. We are continuing to monitor 45Z implementation, final EPA rulings on the proposed partial waiver introduced in November of last year, and the upcoming Set Rule 2, which will include volumes and other market balancing mechanisms. While we are waiting for the regulatory backdrop to clarify, there is still strong bipartisan support for American biofuels and investment in RNG. With that, I'll turn it over to John.

John? Thank you, Adam, and good morning, everyone. As Adam mentioned, our first quarter production results were 38 percent higher compared to the first quarter of 2024, driven primarily by increasing production at the facilities commissioned in the fourth quarter of 2024. As we mentioned in March on our last earnings call, production from these facilities is growing, and we continue to see positive performance across our other operating facilities. We maintain our 2025 RNG production guidance of 5.0 million MMBTU to 5.4 million MMBTU, which at the midpoint is a 37% increase versus 2024. In our in-construction portfolio, we have four landfill RNG projects in construction at Atlantic, Burlington, Cottonwood, and Kirby, which remain on schedule and represent, in aggregate, 2.1 million MMBTU of annual design capacity. We expect Atlantic to commence commercial operations in the third quarter of this year and the next three during 2026. Our development pipeline has numerous near-term opportunities with secured gas rights, and we are maintaining our guidance to place 2 million MMBTU into construction in 2025. In fuel station services, we have 45 stations in construction, of which 19 are OPWL-owned. We are maintaining our guidance to grow fuel station services 2025 adjusted EBITDA 30% to 50% versus 2024. 2025 is off to a good start. And despite the mentioned near-term uncertainties, longer-term market fundamentals are supportive of our business plan and growth potential. Successful, disciplined execution will result in increasing shareholder value. I'll now turn the call over to Kazi to discuss the quarter's financial performance.

Kazi? Thank you, John, and good morning to everyone joining today's call. Last night, we issued our earnings press release outlining our results for the first quarter ended March 31, 2025. We expect to file our Form 10-Q on Monday. Revenue and adjusted EBITDA for the quarter were $85.4 million and $20.1 million, respectively, compared to $64.9 million and $15.2 million in the same period last year. Net income? was 1.3 million up from 0.7 million in Q1 2024. This year-over-year quarterly growth reflects the continued ramp-up of RNG production at facilities commissioned in 2024, along with the growth in our fuel station services segment. Included in these results is Opal's share of adjusted EBITDA from equity method investments. which was $3.4 million for the quarter versus $6.5 million in Q1 2024. The year-over-year decrease is primarily driven by the timing of last year's green sales and startup-related expenses at new joint venture projects. Capital expenditures for the quarter totaled $17 million, including $5.4 million related to our equity method investments. As Adam mentioned, we maintain our full-year 2025 guidance provided in March. We continue to expect adjusted EBITDA between 90 and 110 million, supported by RNG production of 5.0 to 5.4 million MMBTUs. Our guidance assumes D3 RIN pricing of $2.60 per gallon for entire 2025. As of March 31, our total liquidity was $240 million. This includes $40 million plus of cash, cash equivalents and short-term investments, more than $178 million of undrawn availability under our term credit facility, and little over $21 million of remaining capacity under our revolver. In March, we also monetized approximately $8 million in investment tax credit net proceeds and expect roughly $50 million in total ITC sales in 2025, which bolsters our operating cash flow. We believe our current liquidity position combined with the operating cash flows will be sufficient to fund our existing capital plan and near-term growth initiatives. With that, I'll now turn the call back over to John for closing remarks.

In closing, we are pleased with our first quarter of results. We remain well positioned for continued disciplined execution of our strategic growth objectives and the expansion of OPWL's vertically integrated platform. I'll turn the call over now to the operator for Q&A. Thank you all for your interest in Opal Fuels.

Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone. You'll hear the automated message that your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. As well, one question and one follow-up. One moment for the first question. And the first question will be coming from the line of Derek Woodfield. of Texas Capitol. Your line is open.

Good morning, all, and great update. Thanks, Derek. Good morning. For my first question, I wanted to lean in on your production trajectory for the year. While Q1 flattish versus Q4, your guidance implies a material increase in production over the course of the year as recent projects ramp and gas collection improves. Could you perhaps speak to the cadence of production expectations for the year and then the improvement you're expecting in inlet design capacity utilization over the course of the year?

Hi, Derek, John. I'll take this one. So production for the quarter was within our band of expectations. And production was somewhat affected by a couple factors, including an unusually cold winter affecting our landfill gas collection. In addition, we had some availability issues at our virtual pipeline projects, which are not generally as reliable as Direct Connect projects. However, as you mentioned, we are expecting good sequential growth through the next several quarters, consistent with our guidance. And this will come from improvements at existing projects, including landfill gas collection expansions at our open and growing landfills that are occurring typically this time of year and through the summer. In addition, our Polk project is going to be transitioning to a direct connect interconnection this month, which should serve to increase that reliability. We've also put in place a number of key additions over the last five months or so in the operating team there, which should result in increasing efficiencies and availability across those projects. And as we see the Atlantic project on track for commercial operations in the third quarter, we should expect to see results from that in the fourth quarter. As said, we remain confident in our output, and we'll see that sequential ramp over the course of the year.

Terrific. And maybe leaning in further just on your in-construction RNG projects, it appears, as you noted, that these are generally progressing kind of in line with your expectations. Are you guys experiencing any leading edge inflation associated with tariffs?

What you want to cause you want to take that? Let me let me take that high direct. So on the tariff related that we are not seeing any cost increase. In our construction projects or even in our operating areas yet, I don't expect there's going to be a lot, because all the construction projects has already, all the equipments have been ordered, like fixed price contracts have been executed. So we don't expect a lot of implications on our current operations as well as the capital. It could be in future projects and we'll make those judgments as part of the FID when we make the final decision on the investments.

And maybe just any color around how material that could be on future projects, just from what you guys have been able to size up to date.

So just as a guide, some of the future projects, you already made qualifying investments for the ITC purposes. And so part of those costs has already been secured. Didn't see a whole lot of improvement. You remember all of our contents, we try to make it domestic. There could be implications on steel or aluminum, all those areas, but we don't see a major implication. It remains to be seen. We don't know how this whole overall macro situation is going to clarify itself over the next two to six months, but to date, we don't see a major implication. That's great.

I'll turn it back to the operator.

Thank you. And the next question will be coming from the line of Matthew Blair of TPH. Your line is open.

Great. Thank you, and good morning. I wanted to talk about the RIN pricing you achieved in the first quarter. It was down quarter over quarter, but still extremely strong relative to the benchmark index. I think we show you capturing about 112% of the benchmark index. Could you talk about the drivers here, and is this something that you might be able to replicate in Q2 and going forward?

Yeah, thanks, Matt. Adam Kimora here. We did have an average realized written price of about $271 in the first quarter. And, you know, we typically... We don't like to speculate on where RIN prices are going or where public policy is going to go. And we typically have a philosophy that we are going to sell as we go. And we also don't like to talk about too much our trading philosophy and policy. I would say that our Second quarter RIN price will likely be lower than what it was in the first quarter. And our position for the year is basically about 50% that we have sold and sort of supported by our outlook for our guidance.

Sounds good. And then the growth that you're expecting this year in SSS, 30% to 50% EBITDA growth, coming off a pretty strong number in 2024. Could you talk about, and is it possible for you to split, how much of that growth is simply coming from higher volumes? It sounds like you're building 19 of your own stations. And then how much of that growth is coming from expectations of stronger margins due to an increasingly tight dispensing market?

Yeah, so this is Adam again. And, you know, there are obviously, you know, a few sub-segments within fuel station services. And, you know, we're seeing good, strong performance across all of those. And, you know, some of that comes from Opal fuel stations that we own. And then charge that tolling or compression fee. We had a number of those facilities come online in 24 and a number coming online in 25. So you annualize, you know, the ones that came on throughout the year last year and the new ones coming on this year. Our construction business continues to perform well in terms of anticipated margins. And our service business there continues to grow as well. as we have sort of full service contracts. And those could be on stations that we build and then service after the fact. And there is a component to higher utilization and throughput of our dispensing network as RNG volumes continue to flow through there. So it's really all four of those pieces that continue to drive growth in fuel station services.

Great. Thanks for your comments.

Thank you. One moment for the next question. And the next question will come from the line of Martin Malloy of Johnson, Rice & Company. Your line is open.

Good morning. Thank you for taking my questions. First question, just bigger picture. Could you maybe talk about how you're thinking about returning capital to shareholders, potentially dividend policy as you achieve the growth at which time you'll start to generate some meaningful discretionary free cash flow?

Yeah, Matt. This is Adam Kimora here, and I appreciate that question because certainly our largest shareholder and all of our shareholders are interested in maximizing shareholder value and returning value in any number of ways. And this really goes to the flexibility that we have in terms of how we deploy capital and what do we do with the free cash flow generation that's going to be coming to maximize and enhance shareholder value. And we're sitting in a position where we have a very strong opportunity set of biogas projects that we can either deploy capital and accelerate growth if they still achieve our required unlevel rates of return. That free cash flow generation can also be used in M&A opportunities to enhance the platform and be a creative to shareholder value. Or if those things don't materialize and, you know, you're no longer achieving rates of return that you want on new capital projects, you have the flexibility to de-lever and return cash to shareholders through those mechanisms that you were talking about. Or, you know, I know we're trying to achieve, you know, better float and liquidity, and we've taken some actions to be doing that. with our shareholder base, share buybacks in the future could always be something that you look at. Right now, we like the opportunity set that we have in front of us to continue to deploy capital and grow our company in these new types of projects. And by the way, it could either come in fuel station services where we think there could be a real robust opportunity coming for CNG RNG in the heavy duty trucking market or some real attractive large RNG projects that deploy capital there. And we're also cognizant of other ways to create shareholder value from the free cash flow.

Thank you for that answer. And for my second question, I wanted to ask about potential on the electric power side with respect to your facilities. Maybe if you could talk about what you're seeing there from customer interest or potential projects.

Yeah, this is Adam again because, you know, the renewable power segment we don't really talk a lot about. And I think it's a really interesting use for smaller biogas or biogenic methane abatement, quite frankly. I think people understand the benefits of renewable power from biogas, where it's baseload power, enhances grid stability. It's typically in rural areas or municipality-owned. There are a number of different ways to accelerate or incentivize development in that area, and You know, we think that's going to be coming. Now, you know, we have talked historically about an ERIN policy as being something that could be really effective to drive investment in that space and create incremental value for opal fuels. And, you know, if it's not the ERIN policy, we think that there could be other interesting offtake markets for that. You know, I know a lot of data centers were looking for low carbon intensity base load renewable electricity. And we'll see if those types of offtake markets develop and provide that good economic return and that sort of thing. So we don't have anything to report on that front just yet today. And I think also if you look at our financial statements, you'll see we're not making a lot of money on renewable electricity today. And this is also something we try and educate the folks in D.C. about. is that there's not one size fits all. We always think there's this good, better, best policy with what to do with biogenic methane. We think the worst answer is to flare it locally. And we think a good answer is to turn it into renewable electricity for the reasons that we said. And if you have a high enough, if you have a large enough emission source, your best answer is to turn it into RNG where you're capturing the full energy there because those landfill gas electric projects aren't the most efficient. They do take higher heat rates to create your electricity. We think that resonates with folks. We just haven't seen yet where that shakes out in terms of how to best structure either policy around it or or seeing that commercial offtake, but we do think it's going to be coming.

And I'll just add that, as always, our electric project portfolio has represented the raw material for converting these long-term gas rights into RNG projects, and we expect to see that continuing over the course of this year and next.

Great. Thank you. I'll turn it back.

Thank you, one moment for the next question. And the next question will come in from the line of Adam Boubais of Goldman Sachs. Your line is open.

Hi, good morning. I was wondering if you could just update us on your latest thoughts around potential timelines and outcomes of the next iteration of biogas policy.

Adam, this is Adam here. And, you know, there's a lot going on. So when you talk about biogas policy, obviously we have a lot of things happening within the EPA with the renewable fuel standard, and there's a lot of tax policy coming as well. So maybe I'll start on the tax policy first, and then we can move into the RFS. And on the tax policy, it seems like, you know, from the news that I've been reading, We could be seeing, you know, some new tax bills coming out any day next week. And it sounds like there could be some energy tax policy included in that. And if you'll recall, when we gave guidance for the year, we had a minimum to very small amounts of 45Z included in our guidance. You know, it feels like. And I want to just talk from a super high level about what it is that we do again and why you know we think that there is republican and bipartisan support. For for the capture of this, you know biogenic methane from organic waste, which, by the way, will continue, we are going to continue to have biogenic methane. coming from that organic waste that we create and the animals that we use for our food supply create. It is broadly supported that we should be doing something about that biogenic methane. As it pertains to the tax policy, the one that we're waiting for clarity on, that 45Z, You know, we think we'll be seeing that pretty quickly. And it's also pretty interesting, too, because when we talk about our vertical integration, you know, it also gives us diversity to public policy outcomes as well. Because not only in the tax policy are people talking about 45Z, they're also talking about this RNG Incentive Act, which really would accrue to the downstream fuel station services, whether it's an RNG dispensing tax credit or something that comes back on the fuel usage side. And so we think that we'll start to get a little bit of clarity around that probably in the coming weeks. And, you know, we'll see where it shakes out on how the greet model is going to work and whether or not it's at the nozzle tip for dispensing or whether it's on the production side for 45Z or maybe some combination of both. But it does feel like there's broad-based bipartisan support for some of that stuff to be included on the tax policy. And on the RFS, you know, I'm seeing reports, and I'm sure you guys are seeing reports as well, that, you know, the EPA is really trying to keep the timelines on when they put out rules and establish, you know, their rulemaking cadence and timelines. So, you know, we read the same things that everybody else reads where, you know, we could see that coming in the coming weeks. And, you know, as far as, you know, the RFS goes, there has been a considerable amount of focus and attention on liquid biofuels. And I can understand that. You know, there was a lot of investments made in converting refiners to be able to create renewable diesel. And I think previous set rules weren't as supportive for a lot of the investments that were made in that area. And you saw that sort of play through in various RIN pricing for various categories. And I think there's been a lot of focus on that side of it. And there hasn't been as much attention paid to the cellulosic category as much as we would like to see. The interesting thing there is we actually want the same things as a lot of the liquid advanced biofuels in terms of strong volumes across advanced biofuels. If you have a holistic view on how you're managing the RFS, you know, we think the cellulosic waiver credit, you know, can make a lot of sense so that the obligated parties can, you know, achieve their compliance. And, you know, if you've got, you know, sort of, you know, a functioning working RIN market across the spectrum of those advanced biofuels, then you can have that price cap that can really work and support new RNG investment. And, you know, if you do the math on what it can look like in 26 and 27 or however long they do a set rule for, it's really supportive of new investment in RNG and that sort of thing. It's not to say it's always a straight line. We don't know exactly how the rules are going to be, but we do feel like what we do does have that broad bipartisan support. And we don't know where all these things necessarily shake out. What I can tell you is that it does feel like investment in these sort of RNG projects and the productive use of that biogenic methane is broadly supported, whether it be renewable natural gas in heavy industries like heavy-duty trucking or potentially marine fuel. and capturing those smaller emission sources for renewable electricity. We'll see where potentially there's positive tax policy or potential positive outcomes out of the RFS. I do believe that we will start getting that regulatory clarity over the next, I don't know, month or two. We'll see how long it takes to finalize any of those rules. I would say on the 45Z, you know, that starts Jan 1, 2025. We obviously haven't created any of those tax credits or sold any, you know, but that is something that, you know, would be, you know, active for the entire year. Long answer because there's many layers to that onion.

Absolutely, and I appreciate all the thoughts there. And then my last question, it looks like your RNG EBITDA per M is around $18 in the quarter. Just wondering if you can help us think about puts and takes around the trajectory of EBITDA per M and BTU from here. On one hand, it sounds like B3 ring credit prices might step slightly lower sequentially. On the other, I would imagine as you ramp up projects, OPEX per MMVTU maybe moves lower as you spread that OPEX over more production. So just how are you thinking about the trajectory of ETA per MMVTU from here?

So let me answer that question. I think it's a bit simpler than what it may sound. If you think about John has mentioned the secular growth in our RNG production throughout the year from the existing facilities plus the ramp up of projects we put in construction end of last year. So that production would be what the RIN price is going to look like. We already mentioned that we have done pretty well on the RIN price last quarter. It will be less for the second quarter. and third quarter and fourth quarter, depending on the weather rain price are, we are assuming for the rest of the year is gonna show up at 260. And so it's simpler, sequentially growing and moderated by how the rain price is shaping up.

Great, thanks so much.

Thank you. One moment for the next question. The next question will be coming from the line. of Betty Zinn of Scotiabank. Your line is open.

Great, thanks. Good morning. For my first question, I was wondering if you could talk about the renewable power segment. In the first quarter, it looked like revenues were down quite a bit, and as a result, results were down quite a bit as well. So just curious what the drivers were there.

So this is John. In the renewable power segment, you know, Last year, we had the ISCC pathway in that segment, and those contracts terminated. So there was a substantial decrease from those contracts being terminated in the fourth quarter. So that's principally where you're seeing the differences there. Otherwise, it's a pretty consistent performer. In the future, you might see decreases as projects move from renewable power into construction or operation as RNG projects. But otherwise, you know, it should be fairly consistent. We're seeing good opportunities for contracting the power output of those projects as well as RIN prices in certain – I'm sorry, REC prices in certain markets as well. So other than that, Betty, I think that's the principal driver of the change.

Yeah, this is Adam here. I just want to follow up on that. I think, you know, as people might remember, we were enjoying an international export market for through renewable power, and that lapsed in November of last year. So there will be a couple more quarters of that, which was already baked into our guidance and factored into our business plan for 2025. But it opened up a, you know, sort of a, or it made me think about a little broader conversation on tariffs, because we did get that first earlier question on tariffs, which don't have a material impact on the projects in construction. And, you know, as Kazi had mentioned, we don't think we'll have, you know, too material an impact as we're evaluating some of the new, you know, project opportunities in front of us. But it made me think again about, you know, some of those indirect implications on tariffs. You know, when we talk about RNG and we're talking about, you know, U.S. public policy, and how the RFS potentially plays out and what's happening in our domestic tax policy here, you know, an indirect effect of tariffs are we don't have an export market currently for the RNG that we produce. And, you know, we think that that's going to be a really interesting opportunity, you know, once all that stuff shakes out, you know, when those international markets open up again, whether it be for renewable power or other other potential markets for RNG. And once those sorts of things shake out and you get European pathways back, we think that's an interesting opportunity for us.

Great. That's helpful. Thanks. In the first quarter, I also wanted to ask about what looked like a pretty substantial income tax benefit, around $8 million. So just curious if there was anything to point out there.

Yeah, those are the sale of our ITC Section 48 tax credits. If folks remember, we don't include the cash proceeds from the sale of the Section 48 ITC tax credits. and it's not included in our EBITDA guidance, but it is included in net income and cash flow. So that's what that $8 million was, and that was where Kazi was referring earlier, somewhere anticipated to be about $50 million in 2025.

Got it.

Thank you. Thank you. As a reminder, if you'd like to ask a question, please press star 1-1 on your telephone. And our next question will be coming from the line of Craig Shearer of Tuffy Brothers. Your line is open.

All right. hi thanks for taking the questions um you know even a hazy at the moment rng margin outlook uh you know pending regulatory certainty certainly looks a hell of a lot better these days than erin's prospects depending on what we see in coming weeks and months is there room to accelerate conversion of bio fuel power projects to rng

Yeah, I mean, that's what we're excited about. We have a number of projects that we've got secured biogas rights on and a number of conversion projects. And quite frankly, a number of those are sizable projects. And wherever that public policy shakes out, it really defines what your opportunity set is, right? If there is written price volatility, we still have a subset of larger projects that we can still underwrite and make a lot of sense. At the same time, we're being disciplined and prudent. The way our business is structured is these projects do require a significant amount of capital. they take ballpark 18, 24 months to develop and finish out construction on. So you typically spend the money early and upfront, and then you recognize significant free cash flow for a long period of time once the projects are operational. So we also balance how quickly we move on our development based on whatever the externalities are be it public policy, capital markets, what have you. So we've really got the ability to either accelerate development and grow faster or be prudent and manage the balance sheet effectively as well to make sure that you don't, as our chairman likes to say, get over your skis. And so we've got the ability to either, you know, lean in and accelerate development or, you know, you know, stage it out as the projects come online and you deliver the free cash flow.

Great. And my second kind of big picture question, you know, obviously we're hearing from multiple, you know, parties that downstream continues to look strong. you obviously have a nice construction program going on there. But uptake on the 15-liter CMI engines seems to be slower than anticipated. And kind of thinking into the end of the decade, macro Trump administration policies obviously support accelerated domestic liquids production and production from our allies, as well as heavily stair-stepping LNG exports. So you know, a really fearful, you know, worst-case scenario outlook might envision, you know, what are we going to do if there's $50 lower crude and $4 higher systemically Henry Hub gas? Are you hearing any concerns about that?

You know, this is Adam again, and I would say, again, No, I think natural gas is going to stay cheap to oil for as long as the eye can see, specifically here in North America. And I want to remind everybody, when we got into the fuel station service segment, I don't know, 13 years ago or so, we always had the eye that ultimately there was going to be this strategic value of vertically integrating with all of our biogas assets. And at the same time, we were really excited about the prospect of compressed natural gas as a transportation fuel. We always thought if you could take natural gas and turn it into an oil substitute, it was a good way to take advantage of an energy arc between those two things. I think that's going to continue for, quite frankly, as long as the eye can see, given what it costs to produce crude versus what it costs to lift that gas here in the U.S. As far as the uptake of the 15-liter engine, we're really encouraged by what we're seeing and people realizing that it is a good answer. Even if you're just using CNG, you're going to get 20% emission reductions versus diesel. And quite frankly, it's disinflationary when you look at the cost of the fuel versus oil. Now, when we talk about the quote-unquote slower uptake or why aren't we there yet, you know, it's been a confluence of factors of product availability where we didn't have a Freightliner engine, which is, I don't know, 40% or so of the market until really just now at the recent Act Expo. And, you know, and I think, and you've also got now this macro environment where, you know, trade looks like it's a little challenge right now. So, you know, we've seen really good adoption and our base business is really around more, you know, recession resistant kind of businesses, refuse, moving food and beverages and that sort of thing around the country. So when we talk about the slower uptake, it's really around those logistics and transportation fleet customers that didn't have a product until this 15-liter engine showed up. And I would also say when we were getting into it 13 or 14 years ago, everybody was doing it for the economics, right? People weren't really as focused on sustainability or emission profiles back then. And back then, you were talking about a $60,000 premium for the 12-liter tractor versus versus where it is today. Now, I think this period of uncertainty is also sort of healthy. And we think we're getting to a place where the economics are going to work on CNG versus RNG. And once we do that, we think we're also opening up a whole new area of growth where You know, RNG today is about, what, 2% of the diesel market. And, you know, even if we do a fantastic job, you know, capturing all the biogenic methane, you know, RNG could maybe grow 7, 8, 9, 10 times from where it is today. You know, there's an opportunity for CNG, you know, once we get the, you know, maybe the price premium down a little more, which should happen with scale. You know, once, you know, and a lot of those, and there's some structural things we also need to, you know, address there and, you know, make sure there's a residual market for tractors when people want to trade out of them. And, you know, a lot of those for hire fleets, you know, typically operate in a one to three year contract environment, you know, and shippers, you know, that was the other thing from ACT Expo is we saw a lot of collaboration with the shippers, that are hiring these four hire fleets that really want to see them transition into it. And they're starting to realize, hey, maybe we need to do four or five-year contracts so that a five-year payback, you know, for those tractors, you know, can really, you know, help accelerate adoption. So we see a lot of positives coming. And we see, you know, that policy shift away from, you know, trying to, you know, make, you know, that one, you know, zero emission work for every industry. shifting and people people going to lean in on it so I'm not overly concerned about you know what may be you know short-term oil price move that that shrinks the economics a little bit you know we think long term there's going to be a very attractive economic incentive between CNG and diesel do you really think that customers are willing to look at four to five year paybacks versus say as little as one to two You know, that's a really interesting question because, you know, I think if you talk to most C-suites out there, they would say a four to five-year payback is pretty attractive on capital. I think if they get contracts that support that kind of timeframe and maybe they have better visibility on residual values, I think the answer would be yes. I think a lot of public companies are willing to trade CapEx for OpEx as well. So I think the answer is yes. And by the way, there's some customers Obviously, that can see shorter paybacks. And right now, what happens in the industry is the RNG producers are, you know, making RNG more attractive and shrinking the payback by passing along, you know, some of the RIN value to those fleets. You know, so yes and no. You know, some companies, yes, and provided they have contracts on the other side of it, yes. If a fleet owns their own tractor and keeps it for 10 years, then the answer is pretty easy for them. right? So we'll see how it all plays out. And we're still trying to work and, you know, hopefully more competition will bring down that, you know, incremental price for that tractor. And, you know, I think there's also some coming, you know, DEF requirements that, you know, maybe causes that diesel tractor to go up in price and that shrinks the premium. So we're getting there though on the economics of CNG on its own. Not quite there yet, but we're pretty close to getting there.

Appreciate the answers. Thank you.

Thank you. And this does conclude today's Q&A session. There are no more questions in the queue. And I would like to turn the call back over to Adam Kamara for closing remarks. Please go ahead.

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