Montauk Renewables, Inc. Price & Performance (MNTK)

These risk factors and uncertainties are further detailed in Montauk Renewables' SEC filings. Our remarks today might also include non GAAP financial measures. We present EBITDA and adjusted EBITDA metrics because we believe the measures assist investors in analyzing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non GAAP financial measures are not prepared in accordance with generally accepted accounting principles. Additional details regarding these non GAAP financial measures, including reconciliations to the most directly comparable GAAP financial measures, can be found in our slide presentation in our full year 2024 earnings press release issued and filed March 13, 2025, which is also available on our website at [indiscernible] After our remarks, we will open the call to questions. We ask that you please keep the one question to accommodate as many questions as possible. With that, I will turn the call over to Sean.

Thank you, John. Good day, everyone, and thank you for joining our call. On 03/07/2025, the EPA announced its delay of the 2024 RIN compliance deadline for all categories. The EPA has yet to decide on a proposed partial waiver of the 2024 cellulosic biofuel volume requirements or the timing of its decision on this matter since its origination their 12/05/2024, EPA announcement. Montauk had sold 100% of its twenty twenty four D3 RINs it has zero exposure to the timing and resolution of this issue. We ended 2024 with approximately six point eight million twenty twenty four vintage RINs unsold. During the fourth quarter of twenty twenty four, the D3 RIN market exhibited measurable price volatility with indices ranging from a high of $3.5 to a low of $2.08 and significantly muted purchasing activity by obligated parties. Though these market conditions contributed to our decision to hold higher balance of D3 RINs at the end of the year, all twenty twenty four vintage D3 RINs have been subsequently sold as obligated parties reentered the market during the first quarter of twenty twenty five. The volatility continues to impact the renewable natural gas industry in a variety of ways. Montauk's strategy remains steady.

To seek out and invest in projects with quality host businesses that exhibit feedstock growth potential. To diversify our sources of feedstock, our product offerings and our monetization structures and to ensure the long term economic viability of our projects in a wide range of production and pricing scenarios. In 2018, Montauk took its first significant stride towards feedstock diversification through our PECO acquisition. We continue to leverage that diversification through our PECO digestion capacity increase and feedstock amendment with a high quality, high volume dairy agriculture host. Our feedstock diversification strategy is poised to further expand in 2026 with the commissioning of our swine waste energy project in Turkey, North Carolina. Our North Carolina development initiative not only demonstrates our commitment to feedstock diversification, but also our commitment to product diversification. The majority of our production revenue from this project will be derived from renewable power generation, which when combined with state based renewable electricity credits will meaningfully increase our existing REG business segment. In addition to a rebalancing of power generation in our portfolio, our North Carolina development project increases our revenue from commodity based products. Whose market value is not directly influenced by traditional federal or state attribute programs.

The biochar commodity produced by our patented reactor process will help insulate the company from volatility experienced in markets underpinned by federal and state programs such as renewable fuel standard Montauk's commitment to diversification through its product offerings is further illustrated in its previously announced agreement with European Energy North America for sales of biogenic carbon dioxide. This initiative is being prioritized across our portfolio as the company seeks to extract increased value from its existing projects. Along the rising demand for and the market price of industrial and food grade CO2. We believe our historical discipline of seeking out investing in projects with quality host businesses combined with these diversified will position Montauk to successfully navigate the continually changing landscape of the renewable natural gas industry.

With its commissioning in 2024, this will be one of our last updates regarding our PECO digestion capacity increase. In 2025, we will receive the third and final increase in feedstock under the amendment to our feedstock agreement and we expect to make that final payment related to this amendment We are pleased to report that the production from our PECO facility during 2024 delivered an increase of over 17% versus 2023. We anticipate commissioning of our second facility at our Apex site during the second quarter of twenty twenty five. As previously discussed throughout 2024, we continue to expect period where we have excess production capacity while the landfill host increases available feedstock. With our previously announced Blue Granite project, during February 2025, we received notice from the Interconnection Utility of their intention to not accept RNG into their distribution system from any project. As a result, we have indefinitely delayed COD and corresponding capital spend as we both work with the host landfill and prospective stakeholders to evaluate alternative RNG interconnection strategies, both physical and virtual, as well as alternative commodity production opportunities from traditional RNG production.

We are pleased to announce our initiative to convert our Tulsa, Oklahoma renewable electric generation facility project through the design and construction of a renewable natural gas facility. With a variable inlet capacity design, and a corresponding average nameplate capacity of approximately 1,500 MMBtus a day, this new facility will be designed to beneficially process all of the available and growing inlet gas feedstock from its host landfill. We expect that project capital investment to range between between $25,000,000 and $35,000,000 and a targeted commissioning date in the first quarter of twenty twenty seven. [indiscernible] We have prioritized the first of our biogenic CO2 projects related to our previously announced agreement with European Energy. And expect to commission a facility at our Atascocita project during the second quarter of twenty twenty seven. We expect to begin monetization of approximately 60,000 metric tons per year of food grade CO2 in advance of the commencement of our offtake agreements at commodity prices. We continue to progress with our design and equipment selection and construction plans at our other Houston facilities to meet our requirements with European Energy North America to supply their biogenic CO2. Additionally, we are progressing with our design and construction into our Rumpke RNG project with an expected commissioning of Q3 twenty twenty seven and expected volumes of In December 2024, the state of Carolina approved a change in laws governing the generation of REX swine waste under its renewable energy portfolio standard. [indiscernible] For qualifying projects meeting specific eligibility criteria, swine rec generation is enhanced by awarding an additional two enhanced swine credit recs for each swine rec generated.

A ratio of three:one for a period of eight years, followed by a ratio of two to one for a subsequent six year period. The company is in various stages of negotiations with other obligated parties to expand rec sales beyond our previously announced agreement with Duke Energy. We now have over 40 separate farming locations secured under long term agreements to provide access to waste from no less than 200,000 hog spaces in support of our [indiscernible] And with that, I turn the call over to Kev.

Thank you, Sean. I will be discussing our full year 2024 financial and operating results. Please refer to our earnings press release and the supplemental slides that have been posted to our website for additional information. Our profitability is highly dependent on the market price of environmental attributes including the market price of rents. As we self market a significant portion of our rents, [indiscernible] decision not to commit to transfer available rents during a period will impact our revenue and operating profit. At 12/31/2024, we had R6.8 million dollars available but unsold. We have since entered into commitments to transfer all of these rents. Additionally, entered into commitments to transfer all rents from 2024 RNG production, which generated RINs in 2025. In total, in 2025, we have [indiscernible] price of approximately $2.45 We have no additional 2024 compliance year RINs remaining to be transferred. We have not entered into commitments to a significant portion of RINs from 2025 RNG production. [indiscernible] Total revenues in 2024 were 175,700,000.0 flat compared to $174,900,000 in 2023. [indiscernible] There was a decrease in the number of RINs we self marketed during 2024 due to a decision to not commit RMB6.822000 in the fourth quarter of twenty twenty four. [indiscernible] The 2024 average realized price of $3 average realized RIN price of $3.28 increased approximately 21% compared to $2.71 in 2023.

The natural gas price decreased approximately 17.2% during 2024, moving from $2.74 in 2023 to $2.27 in 2024. Total general and administrative expenses were $36,300,000 for 2024, an increase of $1,900,000 or 5.5% compared to $34,400,000 in 2023. Employee related costs including stock based compensation, were $23,100,000 in 2024, an increase $3,400,000 or 17.1% compared to $19,700,000 in 2023. [indiscernible] The increase was primarily related to the accelerated vesting of certain restricted share awards as a result of the termination of an employee. Our professional fees decreased approximately $1,600,000 dollars or 35.3% in 2024 compared to 2023. Turning to our segment operating metrics. I'll begin by reviewing our Renewable Natural Gas segment.

We produced approximately 5,600,000 MMBtu of RNG during 2024, an increase of 100,000 as compared to $5,500,000 in 2023. Wellfield optimization operational enhancements as well as plant processing equipment improvements contributed to the increase. Notably, at our postal facility, which produced 111,000 MMBtu more in 2024 compared to 2023.

Our 76,000 MMB to you more in 2024 compared to 2023, as a result of commissioning our dairy digestion expansion project. Our Galveston facility produced 59,000 MMBtu more in 2024 compared to 2023, as a result of previously disclosed 2023 dry weather condition impacting gas feedstock availability.

Offsetting these improvements were unrelated well field quality issues and weather anomalies, which lowered production at our Rumpke facility producing 159,000 fewer MMPT in 2024 compared to 2023. Revenues from the Renewable Natural Gas segment in 2024 one hundred and fifty eight million an increase of $1,500,000 1% compared to $156,500,000 in 2023. Average commodity pricing for natural gas for 2024 was 17.2% lower than the prior year. During 2024, we self marketed approximately 36,600,000 RINs representing an $8,300,000 decrease 18.5% compared to $44,900,000 in 2023.

Decrease was primarily related to market conditions and a decision to not market 6,800,000 rins generated and available for sale in the fourth quarter of twenty twenty four. Average pricing realized when RIN sales during 2024 was $3.28 as compared to $2.71 in 2023. An increase of 21%. This compares to the average B3 rent index price percent higher than the average B3 rent index price in 2023, of $2.63 At 12/31/2024, we had approximately 291,000 MMBtus available for in generation had approximately 6,800,000 RINs generated and unsold. We had approximately 358,000 MMBtus available for RIN generation and approximately 108,000 RINs generated and unsold at 12/31/2023. We have entered into commitments and transferred all of our RINs and Operating and maintenance expenses for our RNG facilities in 2024 were $53,400,000 an increase of $5,500,000 or 11.5% Our Rumpa facility operating and maintenance expenses increased approximately $1,800,000 as a result of increased media change out and gas processing Our Macardi facility operating and maintenance expenses increased approximately $1,200,000 as a result of a well field operational enhancement program and increased gas compression system maintenance costs. [indiscernible] Our PECO facility operating and maintenance expenses increased approximately $900,000 as a result of non capital non capitalizable costs associated with the digestion capacity increase project as well as expenses associated with efficiency improvements with the existing digesting capacity.

Our Tascacita facility operating and maintenance expenses increased approximately $600,000 primarily driven by increased utility [indiscernible] Our Apex facility operating and maintenance expenses increased approximately $300,000 primarily related to increased gas processing equipment maintenance costs. [indiscernible] We produced 186,000 megawatt hours in related in renewable electricity in 2024. A decrease of approximately 8,000 megawatt hours or 4.1% compared to 194,000 megawatt hours in 2023. [indiscernible] Our security facility produced 9,000 megawatt hours less in 2024 compared to 2023 as a result of us ceasing operations in connection with first quarter of twenty twenty four's sale of the gas rights back to the landfill host. Revenues from renewable electricity facilities in 2024 were $17,800,000 a decrease of $600,000 or 3.8% compared to $18,400,000 in 2023. The decrease was primarily driven by the decrease in our security facility production volume. Operating and maintenance expenses for our renewable electricity facilities in 2024 were $12,800,000 an increase of $1,100,000 or 8.6% compared to $11,700,000 in 2023. The primary driver of the increase were operating and maintenance expenses related to the Montauk Ag Renewables development project which increased approximately $1,100,000 as a result of non capitalizable costs. We calculated and recorded impairment losses of $1,600,000 for 2024, an increase of $700,000 or 75.8% compared to $900,000 for 2023.

The impairment losses in 2024 primarily related to the remaining net value of asset at the security facility. Various RNG equipment that was deemed obsolete for current operations and REG assets that were impacted under startup testing for one of our REG construction work in progress sites. The 2023 impairment losses relate to specifically identified RNG machinery and feedstock processing equipment that were no longer in operational use.

None of the '24 none of the twenty '24 or 2023 impairments were associated with our expectations for our operations to generate future cash flows from operations. Other expenses in 2024, were $3,900,000 a decrease of $1,400,000 or 25.2% compared to $5,300,000 in 2023. The decrease was primarily related to proceeds of $1,000,000 received from the sale of Gas Rate ahead of fuel supply agreement expiration at our security facility and decreased interest expense of $500,000 Operating profit in 2024 was 16,100,000.0 a decrease of $7,500,000 or 31.8% compared to $23,600,000 in 2020 RNG operating profit for twenty twenty four was $56,000,000 a decrease of $3,300,000 or 5.5% compared to $59,300,000 in 2023. [indiscernible] Renewable electricity generation operating loss for 2024 was $2,800,000 an increase of $2,200,000 or compared to $600,000 in 2023. Turning to the balance sheet. 12/31/2024, $56,000,000 was outstanding under our term loan. As of 12/31/2024, the company's capacity available for borrowing under the revolving credit facility remained at $117,800,000 As of 12/31/2024, we generated $43,800,000 of cash from operating activities, an increase of 6.7% compared to $41,100,000 as of 12/31/2023. Based on our estimate of the present value of our PECO earn out obligation, we recorded a decrease of $1,700,000 to the liability as of 12/31/2024.

This decrease was recorded through our R and G segment royalty expense. During 2024, we incurred approximately $62,300,000 in capital expenditures of which $27,800,000 was from Montauk Ag Renewables, $12,600,000 was for the second Apex facility and $8,800,000 was for the Bowerman RNG project. For twenty twenty three, our capital expenditures were $63,100,000 of which $18,600,000 was for Montauk Ag Renewables, dollars $13,700,000 was for the PECO facility digestion capacity increase and $13,100,000 was for the second Apex RNG facility.

For twenty twenty five, we expect our non development capital our non development 2025 capital expenditures to range between $14,000,000 and $17,000,000 Additionally, we currently expect that our existing 2025 development capital expenditures will range between $100,000,000 and $150,000,000 As of 12/31/2024, we had cash and cash equivalents of approximately $45,600,000 and accounts and other receivables of approximately $8,200,000 We don't believe we have any collectability issues with our receivables balance.

Adjusted EBITDA for 2024 was 42,600,000.0 a decrease of $3,900,000 or 8.3% compared to $46,500,000 for 2023. EBITDA for 2024 was $41,000,000 a decrease of $4,300,000 or 9.5% compared to EBITDA of $45,300,000 for 2023. Net income in 2024 was $9,700,000 compared to net income of $14,900,000 in 2023. A decrease of $5,200,000 or 34.9%. On 01/26/2021, we entered into a loan agreement and secured promissory note the initial promissory note, which Montauk Holdings Limited MNK.

MNK is our affiliate and certain of our directors are also directors of MNK. Pursuant to the initial promissory note, we advanced a cash loan of $5,000,000 to MNK for MNK to pay its dividends tax liability arising from the reorganization transact under the South African Income Tax Act of 1962. As amended. As a result of several amendments, the current principal balance of the loan was 10,700,000.0 date [indiscernible] 12/31/2033 and the security interest is 976,000 shares of our common stock held by MNK. Amended the fifth amended promissory note. [indiscernible] December 2021, [indiscernible] entered into an agreement to loan MNK up to CHF10 million South African rand the RP-forty seven loan, The current principal balance and accrued interest is RAR11.7 million or approximately US0.7 million dollars There is no collateral pledge for this loan. This loan became due on 12/31/2024, the maturity date when MNK and RP-forty seven did not extend the maturity of the loan agreement. Based on the transaction implementation agreement between us and MNK, we are obligated to repay the RP-forty seven loan on MNK's behalf subject to MNK confirming that RP-forty seven loan maturity was not extended and that MNK did not have sufficient funds to repay the loan.

As of 12/31/2024, we were accrued a a contingent liability for the repayment of the RP-forty seven loan under the TIA. On 02/02/2025, after the end of our 2024 fiscal year, but before our 2024 financial statements were issued, our Board of Directors approved the repayment of the RP seven loan under the TIA and on 03/05/2025, we repaid the RP 47 loan as required under the TIA. The amount repaid is included in the principal balance of the fifth amended promissory note described above. [indiscernible] Prior to the RP-forty seven loan repayment, we concluded that RP-forty seven, a related party of us through RP-forty seven's ownership of MNK.

Was the primary beneficiary of MNK under the variable interest entity With modification under the TIA, and the subsequent repayment of RP-forty seven loan, RP-forty seven retained its power over MMK, but no longer held significant benefits in MMK.

Following accounting guidance, we determined that with the amendment under the TIA, substantially all of M and K's activities were conducted on our behalf as M and K's only asset is the $970,000 shares of our common stock held as security for the amended promissory note. MNK's only obligation is its loan to us and thus we are the primary beneficiary of MNK. We consolidated MNK as of 12/31/2024.

The repayment of the RP-forty seven loan prior to the issuance of our 2024 fiscal year financial statements was determined to be a subsequent event. As of 12/31/2024, we consolidated M and K's current assets approximately $52,000 non current assets approximately US0.6 million dollars current liabilities approximately US0.6 million dollars and long term liabilities approximately US16000 dollars The fifth amended promissory note became an intercompany loan and it was and was eliminated in consolidation. MNK's investment of approximately $10,200,000 in the company is also eliminated in consolidation. There is no gain or loss on the initial consolidation of MNK the transaction is a common control transaction. We recorded a non cash acquisition of treasury stock of approximately $8,300,000 related to the consolidation these 976,000 shares of our common stock.

Collateralizing the fifth amended promissory note.

MNK remains a separate legal entity with ownership of the $976,000 shares of the company's common stock. Subject to market conditions and our insider trading policy as MNK is an affiliate of the [indiscernible] MNK can sell these shares to repay the loans of the company.

With that, now turn the call back over to Sean. Thank you, Kevin. In closing, while we don't provide guidance as to our internal expectation on the market price of environmental attributes, including the market price of P3 RINs, we would like to provide our 2025 outlook. Is important to note that our guidance ranges include internal assumptions that may or may not align with current market trends. [indiscernible] Also, our outlook is based on selling rents, up to the quarter after rents are generated. We expect our RNG production million million and six million MMBtu and corresponding RNG revenues to range between $150,000,000 and $170,000,000 We expect renewable electricity production volumes to range between 364,000 megawatt hours, Corresponding renewable electricity revenues are expected to range between $17,000,000 and $18,000,000 And with that, we will pause for any questions.

And our first question will come from the line of Salmaya Jain with UBS. Your line is open. Hey, good morning. So with your RNG facilities, how are you guys looking at things from the data center side of things? Any opportunities you're seeing on that product? Or would you advise some color on that?

I'm sorry, would it be possible for you to repeat that question? It was a little Yes. So was your R and D the side? Opportunities on that front that you could highlight?

R and G sales from external businesses such as like data centers, cold storage facilities. These opportunities are in constant development with conversations that we have with entities such as data centers, cold storage facilities, high volume users that are interested in co locating. We've had conversations on a number of our REG facilities specifically just because of how quickly you can provide that electricity. The nuance in looking at those synergies is how you benefit from the renewable electric credits. Whether or not that power is still put into the infrastructure of the local utility as opposed to sort of direct supplying those entities that would sort of co locate geographically to your locations. But it's definitively an area call it quasi voluntary compliance. It is an interesting alternative to how we diversify the product sales that we have especially in light of any pending or recent volatility that you see in the federal and state attribute markets. Thank you. One moment for our next question. And that will come from the line of Matthew Blair with TPH. Your line is open.

Great. Thanks for I had a few questions on the 2025 RNG revenue guidance of $150,000,000 to $170,000,000 So I know you don't provide the underlying RIN assumption, but can you tell us does that revenue guidance assume that all of your RINs will be monetized in 2025 And then also, would you expect to still receive a premium to benchmark RIN prices in 2025? The past couple of years, you have been able to monetize your rims at higher than benchmark prices and is that a trend that you think will continue? Thanks, Matthew. In regards to expectations on achieving premiums over the existing V3 index price. Believe we'll continue we expect to continue our historical trends of success with selling RINs in at Advent pages during Advent pages RIN pricing opportunities. In regards to our forward guidance for 2025 and our expect and recognize revenues on those RINs. Associated generally, as we commented, our expectations are that we will commit to transfer available RINs up to the next quarter available to be transferred.

Associated with the last handful of quarters, we have for we have provided information and we'll continue to to provide information about the timing of those RINs that we keep in inventory that may or may not correspond to that quarter. Additionally, as we continue to move through 2025 here being first quarter, Though we are understanding and working through the EPA B regulatory reform. We do anticipate that, that regulatory reform may have an impact on the timing of those RIN sales as well.

Thank you. One moment for our next question. And that will come from the line of Tim Moore with Clear Thanks. I have a two part question there somewhat related. You had some commentary in November about the landfill operators delay in some capacity slowness there.

Can you maybe comment on that? And then I just want to check that I understood maybe your earlier comment in prepared remarks I think you said $2.45 might have been the average RIN price transfer this year. I'm just wondering if that's indicative of the D3 RIM pricing because the EPA website stopped posting that after inauguration day. I'm just kind of curious what you've seen on pricing in the last few weeks?

Yes, Tim. I can take both of those. With respect to landfills delays in projects. As we've talked in the past, landfills historically have been a little more synergistic in their willingness to allow for you to sort of infiltrate their open face areas where they're placing waste. That allows for you to accelerate the volume increases that you would expect from well filled drilling, anything that would in improve the volumetric size of your well field collection system. We do continue to see hesitation on the landfill side due to the challenges that they are communicating that they present with their staff. So the intricacies of trying to place waste as their primary business. Competing against the delicacy that they need to navigate around collection systems. And the time that they then lose to have to remediate those damages as they're incurred has been something that has been more communicated from them. Over the last few quarters. It's not fatal in the sense that the collection infrastructures are committed to be increased not only from an environmental NSPS compliance standpoint, but also from the standpoint that they want the additional guests. They want to see the royalties. The timing of it is still at times slowed because they're trying to create a little bit of a better divide between when they are high activity in the open face waste placement and when the collection systems come in and start to pull off of that more recently placed waste.

With respect to pricing, other than the standard disclaimers that we don't opine on what we expect pricing to be. It's difficult to say if that price is indicative of what we'll see in 2025. As we sort of mentioned the beginning of this call, the EPA has floated the idea of a postponement or an adjustment down of the volume obligations for 2024. They haven't indicated any change to 2025. The way that we look at pricing is more of a function of who we sell to the majority of our attributes we place directly in the hands of obligated parties. Our decision to hold those volumes at the end of twenty twenty four are not a direct reflection of our view of pricing, is it the right time to pull and Montauk, it's the purchasing parties that are in the market. We saw a significant reduction in the obligated party's purchasing activity in the marketplace. As we see that picking up in the first quarter, that's when we monetize the remainder of those 24. So that's a very roundabout way of explaining that we are more focused on the health of the renewable fuel standard program. Selling our attributes into the hands of the parties that need to buy them and interim basis to folks that are willing to purchase them and ultimately sell them.

To obligated parties, which we believe creates the most disturbing price volatility that you can try to manage through. But it would be difficult at this time to say if $2.45 or something significantly higher or significantly lower is a good indicator to expect what RIN pricing is going to be for 2025 vintage.

Thank you. One moment for our next question.

And that will come from the line of Ryan Fink with B. Riley. Your line is open.

Hey, guys. Thanks for taking my question. Can you talk a bit about what you're seeing in the voluntary market in terms of demand and pricing there? Thanks.

Ryan, that is one of the more challenging markets that we're trying to get I don't know if I want to say reliable or meaningful data from. We're working with our internal capacities. We're working through our external partners.

The reliability of getting meaningful voluntary information from volumes that are coming out of the RFS to generate rents into the voluntary market remains a challenge. That said, we ourselves have entered into what we refer to in fixed price or margin share arrangements that generally thus far have not been placed into the voluntary market. They've been placed into the RFS transportation space. And that's what we've seen through twenty twenty four.

We have the flexibility either through off takes at our sites that are coming up for expiration during 2025 or we believe through those existing margin share arrangements that we have in place from 2024 to further divert away from, if necessary, [indiscernible] space as it as the market so dictates.

Related to that is then your evaluation of what is that price associated to Iran if you could get those volumes into the transportation space. Versus the fixed price and or fixed price plus upper spread that you can share in, as well as term. All of those items are challenged right now under the ongoing EPA, the deferral of the rulemaking in the 2024 obligation, that was announced in December. The uncertainty though yet currently unstated impacts to any change in the already existent [indiscernible] missing the initial rulemaking periods for the 2026 RVO. [indiscernible] Ultimately, as Sean said on his last question, that is a long about way of answering your question of we're seeing activity in the voluntary market achieving readily reliable data similar to how we can get reliable historical data in the grid generation continues to make this this evaluation of when and for how long and at what price points to offer offtake volumes is something that we can continue to evaluate as we move through 2025 noting all those sort of caveats and items that we're weighing as we progress through 2025.

Ryan, the only other thing that I would add to that is our diversification plays, feedstock offtake arrangements, they're also done with a high degree of fiscal responsibility. The diversification that we focus on isn't voluntary versus obligated party. It's diversification of commodities versus attributes. When you're selling attribute based products, the voluntary market does move up and down based on their projections of what they compete against. Which is the attribute market. And when you elect to proceed with the voluntary market, we view it as a nice backstop so that there is some sensibility in pricing because it's an alternative. But that alternative comes with a different risk profile associated with the creditworthiness. Having an attribute going into the market that can appeal and apply to all refiners of petroleum is a much different credit consequence us going to say the previous question [indiscernible] storage facility for voluntary compliance or a data center. There's a lot more that needs to be understood about survivability and the longevity of that business, how it is structured. And not to say that it can't be done, it is something that when you're being ultra selective on projects, the natural consequences you are aspects of what your offtake looks like and the creditworthiness of those off takers.

Thank you. One moment for our next question. And that will come from the line of Betty Jiang with Scotiabank. Your line is open.

Hi, good morning. Thanks for taking my question.

I wanted to ask about the 45 Would there be any impact to Montauk from this Eddie, thank you.

Already received production tax credits from our electric generation portfolio, notably our Bowerman facility. In regards to the 45 Z production tax, credit, the new expanded enhanced one, to say that there's going to be benefit to say that we're not investigating or reviewing that benefit. We currently are in concert with our continued review and evaluation of the previously finalized ITC credit as well. But we continue to evaluate and look through applicability and availability under those various tax credits enhanced or expanded under the IRA Act.

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Sean McLean for any closing remarks.

Well, thank you. And thank you all for taking the time to join us on conference call today. We look forward to speaking with you throughout 2025.

This concludes today's program. Thank you all for participating. You may now disconnect. [indiscernible]