Greenlane Renewables Inc.

Good afternoon, ladies and gentlemen, and welcome to the Green Lane Renewables fourth quarter and fiscal year 2022 conference call. At this time, all participants are in listen only mode. Following the results, we will conduct a question and answer session. To join the question queue, you may press star, then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. Today's call is being recorded and a replay will be available on the Green Lane website. I will now turn the call over to Darren Seed from Insight Capital Markets. Please go ahead.

Thank you, operator, and good afternoon. Welcome to the Green Lane Renewables fourth quarter and fiscal year 2022 conference call. I'm joined today by Brad DeVille, Green Lane's President and Chief Executive Officer, and Monty Balderson, Green Lane's Chief Financial Officer. Before beginning our formal remarks, we'd like to remind listeners that today's discussion may contain forward-looking statements that reflect current views with respect to future events. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these forward-looking statements. Green Lane Renewables does not undertake to update any forward-looking statements except as may be required by applicable law. Listeners are... urged to review the full discussion of risk factors in the company's annual information form, which has been filed with the Canadian securities regulators. Lastly, while this conference call is open to the public and for the sake of brevity, questions will be prioritized for analysts. Now I'll turn the call over to Brad.

Good afternoon. Thank you everyone for participating on today's call. I'd like to start off with a few financial and business highlights from our fiscal year 2022 as well as provide some industry perspectives before I turn the call over to Monty for a more detailed review of the numbers. All figures are in Canadian dollars unless stated otherwise. The GreenLane team delivered another year of record revenue in 2022, a solid accomplishment given some challenges in the RNG market in the U.S. that emerged during the year. Early in 2022, we completed our acquisition of Airdep in Italy. And we went on to launch our deployment of development capital program as we advanced funds of 1.6 million to two separate RNG project development teams in the US. As a reminder, we launched this program to assist project developers in accelerating their projects to the ready for construction phase, while at the same time adding new recurring revenue and profits to GreenLane's business by gaining exposure to RNG off-tape contracts, along with generating additional sales of GreenLane systems and services. In 2022, Greenland announced over 45 million in new biogas upgrading system sale contract wins, 25% of which was for food waste to RNG projects in the US. The remaining 75% split roughly evenly between dairy-derived RNG projects in the US and RNG projects in South America. Today, we also announced that GreenLine was awarded a $7.2 million contract for a food waste pipeline project in Ohio, where we'll be supplying an integrated sulfur removal unit from our subsidiary in Italy and water wash system for upgrading biogas from food waste streams for direct injection to the local natural gas pipeline network. In 2022, 40% of our system sales revenue was generated outside of the U.S. versus only 14% in 2021. For our non-U.S. system sales revenue in 2022 was 14% from Canada, 12% from Brazil, 11% from Europe, and the remaining 3% from other countries. Within the U.S., we've seen a recent shift in contracting activity towards food waste RNG projects as compared with dairy-derived RNG projects. The challenges I referred to a minute ago in the RNG market in the U.S. that emerged during 2022 are related to price. 2022 began with strong RNG spot prices near the highs of the five-year range in the U.S. However, prices began to moderate throughout the year, ultimately ending below their five-year average, largely due to a surplus of credits under the California Low Carbon Fuel Standard, or LCFS, program. U.S. dairy projects were particularly hard hit At the beginning of 2022, spot prices for dairy-derived RNG were more than US$115 per MMBTU, but by the end of 2022, prices dropped to around US$70 per MMBTU. These effects, combined with inflationary pressures, rising interest rates, and lack of fulcrum rules issued by the Department of Treasury for the investment tax credits available under the recently passed Inflation Reduction Act, or IRA, impacted our growth in the second half of 2022. Having recognized that low LCFS credit prices may not achieve the greenhouse gas reductions they are looking for, the California Air Resources Board, or CARB, has indicated that they will update their LCFS program, including introducing more aggressive compliance targets for carbon intensity reduction in 2030 and beyond, with the objective to support continued investment in low carbon technologies. While we anticipate that these and other regulatory developments in the US, such as the IRA, will support RNG demand with improved economics for GreenLane's current and future customers, we are also increasing our focus in other markets where we see growth opportunities. Outside of North America, GreenLane continues to invest for growth in Europe, building on our acquisition in Italy in February of 2022, and in South America by expanding our local presence. We see 2023 as a pivotal year for GreenLane as we actively diversify our global footprint and invest in systems and processes that will allow us to scale the business. Our investments to grow in key international markets include strengthening local supply chains, employing local talent, and partnering with industry participants that have strong relationships locally within the region. We are well capitalized with more than 21 million in the bank and are debt-free which means we're well positioned to pursue our strategic plan. I would once again like to take this opportunity to thank the GreenLane team for their dedication and commitment to our mission of helping to decarbonize the world's energy systems, as well as our customers for choosing GreenLane as a trusted partner. I'll now pass the call over to Monty.