OPAL Fuels Inc. Price & Performance (OPAL)

And Kaze san, Opal Chief Financial Officer.

Opel Fuels released financial and operating results for the fourth quarter and full year 2024 yesterday afternoon, and those results are available on the Investor Relations section of of our website at opaltools.com. [indiscernible] The presentation and access to the webcast for this call are also available on our website site. After completion of today's call, a replay will be available for ninety days. Before we begin, I'd like to remind you that our remarks including answers to your questions contain forward looking statements. Which involve risks and uncertainties and assumptions.

Forward looking statements are not against the 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 Fuel does not undertake any obligation to update forward looking statements to reflect events or circumstances after the date of this call. [indiscernible] Additionally, this call will contain certain discussion of non GAAP measures. Definition of non GAAP measures used in the 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 quarter's results. 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 Forum, Co CEO of Opel Fuels. Thank you, Todd, and good morning, everyone, and thank you for participating four earnings call. 2024 was a strong year for Opel Fuels that showcased our both key drivers of our market share gains across our segments. Results from the fourth quarter and full year were solid with 2024 adjusted EBITDA of $90,000,000 in line with our guidance. Our 2024 fuel station service segment EBITDA was $40,200,000 76% higher versus 2023 and within the guidance we set out for the segment last March.

RNG fuel production for 2024 was 3,800,000 MMBtus, up 41% versus twenty twenty three but slightly behind guidance of 4,000,000 MMBtus. [indiscernible] The shortfall is mainly due to longer ramp up time lines at our newly commissioned RNG facilities. John will go into greater detail in a few minutes what we expect in 2025 from a production and operation standpoint. We brought online three large landfill RNG projects in 2024, totaling 3,800,000 MMBtus of annual design capacity. We commenced commercial operations at Prince William in the spring then at Saphyr in the third quarter and finally at Pulc in the fourth quarter. Since going public in 2022, we've gone from two operating land sale RNG facilities to 11 now. Over that period, we've more than tripled our annual design Separately, we continue to execute our growth objectives by putting projects into construction. In 2024, we put nearly 2000000 MMBtus Of Annual Design Capacity Into Construction With The Announced Projects At Cottonwood Burlington and Kirby. All three of which showcase our ability to grow organically through new development Opel's growth continues to be driven by our execution in building and operating and our vertical integration, which provides the most value for Opal and our feedstock partners.

Of our 17 RNG projects that are in operation and construction, 12 have been the result of securing new gas rights over the past three years and five were a combination of acquisition and conversion of existing landfill gas to electric projects. We see growth of our RNG production base driven by a continuation such project opportunities. Our Fuel Station Service segment also had a solid year of execution, meeting our growth objectives for the year. We talk a lot about the strategic value of our Downstream segment but it is worth highlighting the attractiveness of the segment on a standalone basis. The Fuel Station Service segment provides diversification, predictable cash flows, attractive returns on capital and a large and Natural gas, a cheaper, cleaner alternative to diesel fuel for Class eight heavy duty fleets is only fueling around 2% of that market in The U. S. An enormous opportunity to cost effectively decarbonize that sector as other technologies continue to struggle to meet the operational needs of those fleets.

With the introduction of the 15 liter engine, we're optimistic fuel station services will be an increasingly important part of our capital allocation strategy.

I'd like to mention some additions to our leadership team since our last call.

We're excited that Kazi Hassan has joined as Chief Financial Officer of Opal Fuels. Kazi is an experienced leader who's already adding tremendous value to our team. I'd also like to thank Scott Contino, who served as our Interim Chief Financial Officer for over a year. Scott is the consummate professional and I know FortiStar will enjoy having his full attention now that Kazi has joined Opel.

We also hired Daryl Burke as EVP of Biogas Operations in December. Daryl brings a wealth of operational experience from a long career at Coke Industries We're fortunate to be able to fill these important leadership positions with a caliber of professionals like Kazi and Daryl and their impacts are already being felt throughout the organization. We expect 2025 will be another year of growth. Adjusted EBITDA is expected to range from $90,000,000 to 110,000,000 and is based on the 2025 RNG production guidance of 5,000,000 to 5,400,000 MMBtu. 30% to 40% higher versus 2024 at a RIN price assumption of $2.6 per rent. This 2025 RIN price is approximately $0.5 per gallon below twenty twenty four's realized price. At last year's RIN price, our guidance would be approximately $30,000,000 higher Every $0.1 shift in D3 RIN price equates to an approximate $5,000,000 to $6,000,000 impact on 2025 adjusted EBITDA. The 2025 adjusted EBITDA range includes fuel station services adjusted EBITDA growth of 30% to 50% in 2025 versus 2024. However, our guidance excludes approximately 50,000,000 of expected ITC sales in 2025 compared to the approximately $9,000,000 in 2024. Which will contribute meaningfully to operating cash flow growth and earnings per share.

In addition, our Renewable Power adjusted EBITDA is experiencing about a $10,000,000 decline in 2025 versus 2024 due to Europe no longer certifying U. S. Biogas for its regulatory programs. I also want to comment on the current regulatory environment and why we remain bullish on RNG as an American biofuel. RNG and renewable power from biogas are attractive sources of renewable energy because they are sourced from a stable and growing feedstock, are drop in fuels that use proven and cost effective technology. RNG is here today in heavy duty trucking and increasingly in marine fuel. RNG is an American biofuel that aligns quite well with other American liquid biofuels from the agricultural sector within the RFS and other potential public policies. With that, I'll turn it over to John. John?

Thank you, Adam.

And good morning, everyone. 2024 was a strong year for Opel Fuels. We're particularly pleased that we brought online three large landfill RNG projects. Prince William, Sapphire and Polk are significant achievements.

In total, they represent 3,600,000.0 MMB of annual design capacity. Exiting 2024, we now have 11 RNG projects in operation representing an annual design capacity of 8,800,000.0 MMBtu. [indiscernible] up from 3,900,000.0 MMBtu at year end 2022. This represents a 50% annualized growth rate over the last two years. As Adam mentioned, production results while significantly higher than 2023, did not meet our expectations. Full year 2024 RNG production was 3,800,000.0 MMBtu. The 2024 RNG production was affected by slower ramp up of the newly online projects in the fourth quarter. As we move through the ramp up period from these facilities in the first quarter, we expect to see production growth from these facilities and landfill volumes grow at our other operating facilities we expect to see full year 2025 RNG production to range between 5,000,000 MMBtus to 5,400,000.0 MMBtus. Which at the midpoint is a 37% increase versus 2024. Shifting gears to our landfill construction portfolio. We put three landfill RNG projects into construction in 2024 at Burlington, Cottonwood and Kirby, representing in aggregate 1,800,000.0 MMBtu. Of annual design capacity. We now have a total of four landfill RNG projects in construction representing 2,100,000.0 MMBtu of Opal share of annual design capacity including Atlantic which we expect to commence commercial operation in the third quarter of this year.

We have a robust development pipeline including the four development projects we recently announced, and conversion opportunities within our renewable power portfolio. We expect to place 2,000,000 MMB in construction in 2025, In fuel station services, we entered the year with a solid backlog of new stations, with 47 in construction of which 20 are Opal owned. As Adam mentioned, we expect to grow fuel station services 2025 adjusted EBITDA 30% to 50% compared with 2024. This growth continues to be driven by our successful track record building operating and maintaining highly reliable stations replicating a diesel like fueling experience without operational disruptions. With Opal Fuel's nationwide construction and service capabilities, we are in a strong position to partner with large scale fleets for natural gas vehicle deployment.

We're happy with where we are positioned for 2025. Despite the near term volatility longer term market fundamentals are supportive of our business plan and growth and we expect our disciplined execution will result in increasing shareholder value. With that, it is my pleasure to introduce Kazi Hassan, who Opel Fuel's new Chief Financial Officer.

Kazi will discuss the quarter's financial performance. Kazi?

Thank you, John.

Good morning to all the participants on today's call. Last night, we filed our earnings press release which detailed our quarterly and annual results for the quarter and year ending 12/31/2024.

Our 10 ks will be filed on Monday. Revenue and adjusted EBITDA in fourth quarter were $80,000,000 and $22,600,000 as compared to $87,000,000 and $32,000,000 in the same quarter in 2023. Respectively. Net loss for the quarter was $5,400,000 as compared to net income of 20,100,000.0 in 2023. The main driver for the decrease in revenue adjusted EBITDA and earnings was the timing and pricing of environmental credit sales compared to the fourth quarter of twenty twenty three. For the full year 2024, revenue, adjusted EBITDA and net income were $299.990.00 and 14,300,000.0 compared to $256.1.51.9 dollars and $127,000,000 in 2023. Primary reason for the decrease in net income for 2024 is related to a gain of $122,900,000 recognized related to the consolidation of Emerald and Sapphire in 2023. Included in the foregoing is Opel's share of adjusted EBITDA from equity method investments which for the quarter was $4,200,000 as compared to $6,700,000 in the fourth quarter of twenty twenty three. And the full year 2024 was $24,900,000 versus $11,400,000 in 2023. The reduction in the fourth quarter is a combination of the timing of last year's RIN sales and the startup cost expense at new joint venture projects. Full year capital expenditures were hundred and $62,300,000 including $35,200,000 relating to equity method investments.

I now want to shift gears to our 2025 guidance. Full year 2025 guidance we expect the adjusted EBITDA to be between $90,000,000 and $110,000,000 and R and G production to range between $5,000,000 and 5,400,000 MMBtu. Our EBITDA guidance is based off the high and low range of our production forecast and assumes a $2.6 per gallon D3 RIN price. As of 12/31/2024, our liquidity was $223,600,000 consisting of $178,400,000 of unused capacity under our $450,000,000 senior secured credit facility. Dollars 20,900,000.0 of unused capacity under the associated revolver and $44,300,000 of cash cash equivalents and short term investments. In 2025, we expect approximately $50,000,000 of cash proceeds from ITC sales bolstering both our earnings and operating cash flow. To continue to fund our investment. As we disclosed in recent filings, we agreed to a twelve month extension of the draw period on the credit facility. Our liquidity anticipated cash flows from operations a sufficient to meet our anticipated funding needs.

As I conclude my first earnings call, as CFO of Opel Fuels, I want to express how genuinely impressed I am by the extraordinary team we have in place. Including our leadership team led by Adam and John. The team's proven ability to prudently execute our business plan combined with our disciplined and prudent approach to capital allocation, positions us well to continue to capture and improve shareholder value. I'm truly glad to be part of the team and I look forward to meeting and collaborating with our investors. We will be scheduling an Investor Day later in the year and we'll reach out soon. I will now turn it back to John for concluding remarks. In closing, we are pleased with our 2024 results and are positioned well for continued disciplined execution of our strategic growth objectives. We remain committed to furthering Opel's vertically integrated mission together with our partners to build and operate best in class biogas capture and conversion projects that deliver industry leading reliable and cost effective low carbon intensity energy products that displays fossil fuels and mitigate climate change. And with that, I'll turn the call over to the operator for Q and A. Thank you all for your continued interest in Opal Fuels.

At this time, we'll conduct a question and answer session. And our first question comes from the line of Derek Whitfield of Texas Capital. Your line is now open.

Good morning, Owen, and thanks for taking my questions.

For my first question, I wanted to focus on production guidance and evaluating your Q4 design capacity and expected contributions from projects in construction. It would appear that your guidance is quite conservative for the year.

If we were to take design capacity in Q4 and assume some optimization to drive higher inlet gas volumes Maybe just speak to the trajectory that you guys would expect in Q1 and Q2 from that alone?

Good morning, Derek. This is Adam. Adam here. I'll start and then maybe I'll hand it over to John. I think as we've explained and talked about in the past, we do expect increasing utilizations from our facilities. And as we build them, we're always building in that capacity for the increasing landfill gas volumes from the open landfills. And we see the year playing out with as we're moving through some of those ramp up issues, sequential upticks throughout the year. And I'll pass it over to John to talk a little bit more about the cadence.

So good morning, Derek. Again, we're going to see continued growth from same store sales as these open and growing landfills produce additional gas. As Adam said, the the projects that we're building have a good amount of unused capacity So what we'll see is that growth during the course of the year. One of the things that we have experienced and I expect is part of the Q4 and as we move into the 2025 is really the ramp rate that we see at projects. Ramp rate is a little bit uncertain.

You get to a project, we look at kind of average ramp rates being a couple months long but sometimes a project will come right online and work out of the box, Sometimes a project might take a little bit longer to ramp up. We saw that in the fourth quarter with the pulp and sapphire projects taking a little bit longer than we [indiscernible] But as those projects really come to full capacity, we're actually seeing better results from them. Particularly because the gas resource is somewhat higher than what we had projected or forecast. So we're really I guess, optimistic about where we're seeing these projects and the cadence that we're going to see during the course of the year.

Great.

And maybe bigger picture, for you guys, kind of from the fallout of BP's pivot and waste management situation, we could see some material projects come to market this year How are you guys thinking about the competitive landscape from a growth perspective? And how would you perceive those opportunities from a funding perspective if it became available?

So, it's interesting that there were a number of portfolios that came to market over the course of the last year. The last one that really transacted was the Enbridge acquisition of the Moro Renewables portfolio. Which was $1,200,000,000 and really reaffirm the relative value of Opal Fuels we look at M and A, well, our first focus of course is execution on the opportunity set that we have in front of us. As we were saying before, we have a great set of projects both from inside our portfolio that we're converting from renewable power projects as well as from outside our portfolio that we're developing through the relationships that we're building with our landfill partners. So that's really our primary source of growth. But as we look across the industry, at some of the opportunities we do participate and look at each of the opportunities that come across, And we believe that we have good access to capital for these opportunities and that should one of these come across like you said, When you mentioned VP's pivot, their pivot did not pivot away from RNG. It was really other renewables So I'll just kind of point that out.

But you're right, the WM portfolio and others were on the market.

And and will be in there evaluating it. And looking at the opportunities as they arise.

And I'll just follow-up there real quickly, Derek. This is Adam again. One thing that we have shown over the last three years is our ability to grow by securing new gas rights and it's really driven by that ability to successfully bring online and operate those successful RNG projects and also our vertical integration to realize the most value for those molecules in transportation fuel. And I'd say that's continuing. So we think we're in a really good position to compete for for new biogas rights projects. And again, that successful execution also gives capital providers confidence in working with Opel Fuel. So we feel like we're in a very strong position to compete for some of those new business opportunities.

That's great. Thanks for your time. Thank you. One moment for our next question. Our next question comes from the line of Matthew Blair of TPH. Your line is now open.

Thank you and good morning. Adam, I think you mentioned ITC tailwinds but what about the PTC?

Is there any 45 z number in five guidance And if not, what would it take for you to receive 45 seat credits this year? And And how much might that come to?

Good morning. Thank you for the question. I'll let Kazi answer the question on what's in our guidance and then I'm happy to talk about process and how we see that playing out.

Good morning, Matthew. In our low end of the guidance, we actually have a material amount of 45 the top of the guidance, we do include a expected value, which is not not also that material, but we do have a little bit on the top end.

Yes. And as far as how the process is playing out on 45Z, there was a proposed rule that is seeking final comments by April 10. We are supportive of them finalizing what was in that proposed rule There are a few tweaks that will be in our comment letter that we think can improve some of the scoring and the value that could accrue to us.

We're cautiously optimistic that 45Z will remain intact and and hopeful that we'll get a little bit of an improvement in how they're doing some of that scoring and calculating that value. We think that we should get resolution of that shortly after the final comment period. Sounds good. And then could you elaborate a little bit more on the tightness in the dispensing market It looks like the unit margins of your FSS segment have been moving up the past few quarters.

I know there's plans to build I believe it's 20 of your own stations, I guess this year. Plus some what looks like third party stations as well.

But yes, could you just elaborate a little bit more on the tightness you're seeing And is that really a function of the new Cummins engine coming to market?

Or are there other growth drivers as well?

Yes. So couple of things on our Fuel Station Service segment. We're seeing good growth and good margin improvement across all the different contributors to our Fuel Station Services. But certainly an increasing amount of RNG through our dispensing network also benefits that segment. The tightness of the market in terms of dispensing has been occurring over the last twelve to eighteen months as RNG so supply continues to grow faster than what the dispensing offtake market has been growing. And that certainly has been a result of a few things. One is the model changeover from the 12 liter engine to the 15 liter engine and a slightly slower adoption than what those folks in the industry have been looking for in terms of adoption of the 15 liter engine both in terms of when OEMs have been incorporating that engine into their trucks, also driven by a little bit of confusing noise out of regulation where we had that Phase three truck regulations that was really causing fleets to pause in terms of purchasing combustion engines or thinking about combustion engines. Clearly, the EPA has been quite active and most most recently, look to remove that stipulation on combustion engines.

So we think that may be an area where fleets may be more in tune to adopting RNG or natural gas engines And so that dispensing market has been tightening and we do believe that there could be some acceleration in that 15 liter adoption now with some product availability removal of that Phase three truck regulation, and we're still working on the cost of those vehicles thinking about how to give some certainty around residual values of those trucks for the fleet. Great. Thanks for your comments.

Thank you, everyone. Our next question Our next question comes from the line of Thomas Merrick of Janney Montgomery Scott. Your line is now open.

Good morning, gentlemen. Thanks for the time.

A couple of questions on CapEx, kind of a multipart question here, but what are you seeing on equipment cost inflation at the moment And then specifically as it relates to steel and aluminum tariffs, just can you help us think through the impact on the RNG build out like CapEx per MBTU, if you feel like that's [indiscernible] And then on the fuel station service side, how do you see those tariffs impacting the CapEx of that build out?

Sure.

So this is John. I'll start on this one here. First off, when we enter into construction on a project, [indiscernible] commit to all the equipment major equipment right out of the gate. So that we don't subject existing projects to the inflation or the tariffs or anything else. Second, all of our projects are qualifying for domestic content within the ITC rules. And so we have we don't really have a whole lot of exposure to foreign tariffs don't use a lot of aluminum in our projects and we use a little bit of structural steel And so, steel prices going up will have a small effect on pricing, but not tremendous. Overall, inflation compared to what we saw coming out of the COVID era is greatly tamed. I'll just reiterate that when we do put a project into construction, we're committing to it. So we see good opportunities that meet our hurdle our IRR hurdles for projects. So that will continue to be able to put more projects into construction even in the current environment.

So while it is a little choppy or volatile out there, We are seeing good opportunities. And And we continue to look at value engineering on our projects to keep the costs in control and making sure that our returns are solid there.

I hope that answered your question. Yes, John. Thanks. Appreciate the detail there.

One more on the Opal, just what's a reasonable timeline on resolution of the partial waiver If you can kind of walk through Gantt chart of that, that would be helpful. I do just want to sneak in a third one. Appreciate it.

Just on the power projects, is there opportunity to recontract some of the PPAs over the next few quarters or do some of these PPAs run longer than that?

Thanks.

Yes. This is Adam here. We are at advocating for resolution on that partial waiver as quickly as we can. It feels to me like the EPA in their action a few days back, that was their first focus. I think they're turning their attention to RFS now. They had set a deadline in place also to come out with the next set rule in March. I don't think it's going to happen in March. We're hopeful that we could see it in the April, May timeframe. As it pertains to the partial waiver, they did come out on March 7 and extended the compliance deadline for 2024 compliance into the June timeframe. And and did not finalize that partial waiver down when they did that. So I'm not sure if we'll see that withdrawal of the partial or a potential withdrawal of the partial waiver before they set rule or they'll do them both at the same time. But we do believe that EPA is now squarely focused on on some of those RFF actions.

And then with regard to the power projects, first off, our obviously our renewable power portfolio is a smaller contributor to our overall EBITDA. We But within that portfolio, somewhat less than half of the projects are subject to merchant pricing, which gets set over periods of months or a year in some cases or two years in other cases, and that we've seen good strong merchant pricing supporting these. So that for the other part of our projects, when they roll off, we'll proactively enter into additional contracts we'll set the terms of those based upon what we see in the market at the time. But good pricing and I think tailwinds on those merchant pricing. Adam, did you want to follow-up on one point?

Yes. One thing I'd like to talk about for renewable power is obviously, it has not been a significant growth driver of Opal Fuels Or A Significant On Maintaining Those Facilities. And We Really View That Segment As Some Pretty Interesting Optionality Both On Our Existing Portfolio Operations Plus A Number Of Renewable Power Projects That We Could Develop. And At Some Point, Given What People Are Talking About In Terms Of Electricity Demand In The U. S. And still trying to enhance grid stability. And we hear all the time in DC where folks are really focused on electricity prices and where is new electricity generation can come from. We think there's a significant opportunity in this country to capture the biogenic methane molecules from smaller landfills, wastewater treatment facilities, smaller ag sources of biogas emissions. To create renewable electricity which is stable, baseload power and enhances grid stability. So So initial focus right now is really making sure we get clarity and resolution But we do believe that electricity created from biogas is going to be something that folks are going to think make a lot of sense. And at some point, we think we're going to be talking about renewable power not only as incremental opportunity for our existing portfolio, but also a growth driver.

And I wanted to circle back to the RFS question that you had on the partial waiver. And also the upcoming set rule. I think it's really important where we feel like the energy space is all getting painted with the with the same brush here in the capital markets. And the reality is where we sit really aligns with what agricultural biofuels are seeking.

Out of the EPA in terms of strong and relatively stable cellulosic D3 category. It's pretty interesting to us that ethanol players are now participating in the cellulosic B3 category. And they're doing it in a more meaningful way as we look out over the next twelve to eighteen months. And the renewable diesel producers, specifically those that create the renewable diesel from soy, from soybeans are also seeking similar things in terms of removing or withdrawing that retroactive partial waiver down of volumes and they would also like to see strong D3 volumes and perhaps an introduction a reintroduction to cellulosic waiver credit in D5 mechanism, price cap mechanism. And we'll see.

How the next month or two play out on on those key issues, but those could be material in terms of providing clarity to the D3 market.

Well, thank you both for the thorough explanation. Appreciate it. [indiscernible] Our next question comes from the line of Adam Bubes of Goldman Sachs. Your line is now open. Hi, good morning.

Nice to see the continued strong [indiscernible] in the Fuel Station Services segment. Can you just parse out the moving pieces driving the 30% to 50% EBITDA growth outlook in that segment? Is that margin improvement, more dispensing volumes? Any color on the underlying drivers for be great.

Yes, appreciate the question there, Adam. It's a combination across the drivers of that segment. So just a quick reminder for folks, fuel station services generates revenues and EBITDA from constructing third party stations from long term service contracts with are good visible tangible growth and dispensing volumes through our station network. And so we see the continuation of those both growing in terms of revenues and and improving margins across that segment. So really a multi pronged revenue growth and margin improvement in that segment.

And then can you help us think about the buildup to the two sixty D3 RIM price assumption for twenty twenty five? What percent of volume is locked in and at what price? And what does that sort of imply that you're selling into the spot market for the year?

Yes. No, I appreciate that question. Question. So if you'll remember, one of the things we liked about a multiyear set rule where you've got visibility on volumes over three years We were always hopeful that you would start to see trading in a multiyear way and you could look out beyond just the current year in terms of how you would trade and transact your RINs. The market never fully developed into a three year strip or multi years on that.

But we did start to see a little bit of trading in the out year RIN. So, we did transact a small amount of our RINs in November, started to in November of last year for twenty twenty five D3 RINs And we have been moderately active here in the beginning part of the year. So our written price outlook is really a combination of what was sold forward a little bit and where we see the current market today. And that's how we arrived at our $2.6 RIN price for 2025. And I would go back to those other comments on the RFS. We're still cautiously optimistic that if we and the folks on the agricultural biofuel side are effective in our discussions and advocacy we still could see prices and the market return to where where they had been historically, like previously over the last twelve eighteen months.

Great.

And then last one for me. Nice to see the Atlantic project on track to commence operations in 3Q. Can you just update us on timing of the other three landfill gas projects Burlington and the two with Waste Management Sure. So as you pointed out, the Atlantic project is on track third quarter here.

And we're excited about the projects really shaping up well.

The other projects are on track. As we move into 2026. We are looking at the first two Cottonwood and Burlington in the first half of the year. And then Kirby in the second half of the year. The Kirby project is being built out in California. And so it will be a little bit longer timeframe overall than the other projects. But we would look to see Kirby coming online towards the end of of 2026.

Great. Thanks so much.

Thank you. One moment for our next question. Our next question comes from the line of Ryan Fink at B. Riley. Your line is now open.

Hey, guys.

Thanks for taking my questions. Can you talk about project development broadly and if you've seen a slowdown maybe in earlier stage discussions given some uncertainty related to federal incentives?

Yes.

So this is Adam here. No, I wouldn't say that that there's been a slowdown in early development activity. We have a number of projects that we feel are actionable, close to actionable, It's really the same one off discussions whether or not we've got partnerships and and documentation around whether they be partnership agreements or the biogas rights agreement. So I wouldn't say any federal policy or that sort of thing is slowing down those discussions. You have to remember, these the feedstock posts are whether it's for their own environmental compliance where they're seeking to make sure that they have beneficial use of their biogenic methane emissions. They also recognize that there is value to those molecules in these renewable energy markets. So they're trying to move as quickly as we can. And we're not seeing a slowdown on the front end there. They're all idiosyncratic documentation.

Appreciate that, Adam.

And secondly, I want to get a better understanding on how you're thinking about the toggle between growth and capital preservation today At what point does it make sense to perhaps take your foot off the gas in order to let your operating assets generate free cash flow without meaningful ongoing growth CapEx? That is a terrific question and it's one that we discuss quite a bit. You have to remember that in our DNA here is is disciplined capital allocation and making sure that we have terrific risk adjusted returns. And you can be sure that the shareholders certainly appreciate that fact. And what I think we need to do a better job of explaining to [indiscernible] at certain points, we do have that flexibility in ability to turn off the growth engine and just create a significant amount of discretionary free cash flow. And for those new listeners who are getting up to speed on Opal Fuels, after we build these facilities, our maintenance CapEx is extraordinarily low. And sense, we understand that we've got the ability to toggle. And if it makes sense to and create that discretionary free cash flow, we're certainly going to do that.

And the nice thing about our business model is that we do have that flexibility and ability.

And we look forward to Analyst Day. Actually, we're going to host an Analyst Day I'm looking over at Kazi here. He's been on the job for about a month. And maybe it'll be in the third quarter that we'll target it. And we're going to do a much better job of explaining to folks what the free cash flow generation is at Opel Fuels and what the flexibilities we have to create, enhance, unlock shareholder value with that discretionary free cash flow. And and perhaps talk a little bit about our earnings per share and what it looks like where we have significant income generated, which is not getting captured in adjusted EBITDA as well. We understand we've got that toggle and flexibility. And at the same time, we've also got access to capital continue to grow if those projects continue to look like they're good risk adjusted returns. So we're also in a little bit of unique position. I talked about it earlier as a renewable fuel or energy company feel like we're not getting different availability and and what we do with the discretionary free cash flow also provide a lot of different opportunities.

Great.

Appreciate that detail. [indiscernible] And our next question comes from the line of Betty Jiang of Scotiabank. Your line is now open. Good morning.

Thanks for taking my question. I wanted to ask about the mix between upstream and downstream. Just looking at your guidance for 2025, and assuming fuel station services kind of grows EBITDA by between $30,000,000 to 50% and your overall EBITDA guidance, it looks like Fuel Station Services is growing to more than 50% of your overall EBITDA. Is this the right balance for Opal That share has certainly increased over time. What how do you see that going forward?

Yes. I just want to correct one thing there. I think from a segment EBITDA perspective, I don't think that that is maybe allocating out sort of corporate G and A and that sort of thing. And but you are right that fuel station services segment EBITDA is growing faster than the rest of the the company in 2025. And really RNG fuel is not growing as quickly this year. Really from that RIN price assumption 2425. And of course, renewable power, we highlighted, has that $10,000,000 decline in $25,000,000 versus $24,000,000 I'm going to let Kazi step in here as well. Yes. So just to clarify, going forward, what you said is 50% of the portfolio to Fiosystem services it's not there yet. If you look at it is a growing portion as Adam mentioned, but it's not still 50% of the total portfolio.

Okay, understood.

And in the fourth quarter, I wanted to ask about RIN generation in the fuel station services segment. It seemed slightly lower than normal. I think it was only around 100 or so thousand of RINs. Was there anything in particular there?

I think we may have to get back to you on that. 100,000 wind generation in our fuel station services think we're going to get back to you on that one.

Okay. Thank you.

Thank you. One moment for our next question. And our next question comes from the line of Matthew Blair of TPH. Your line is now open.

Hi. Thanks for taking my follow ups. Just two quick ones. And apologies if I missed this, but is there a guide yet for 2025 CapEx And then also, how should we be thinking about your corporate spending in 2025, I believe in 2024, it was approximately a $46,000,000 headwind Would that be pretty similar in in 2025 or would that step up? Let me take the CapEx one first.

Hi, Matthew.

We are not guiding the exact CapEx, but we are guiding through what we are going to put into the construction because CapEx generally is more around sculpted payment to the contractors. That varies from one project to the next, so we are trying to. Give you an indication of where we are heading rather than a specific dollar amount.

Yes. One thing we've noticed, which is actually a positive for Opal Fuel is that our capital expenditures on our projects came a little bit later in the projects. Than when the projects came online, which actually enhance our returns and [indiscernible] we don't think it's as impactful to talk about a specific year of CapEx. Just because of that factor. And although I've never heard corporate G and A referred to as a headwind or people as a headwind, which is interesting. I would say that our corporate G and A will be up in '25 versus continue to add to the platform here at Opal Fuels.

Great. Thank you very much.

Thank you. I'm showing no further questions at this time. I would now like to turn it back to Adam Kamau for closing remarks.

We appreciate your taking your time and interest in Opel Fuels and I hope everybody has a wonderful day.