Clean Energy Fuels (CLNE) 9 Aug 232023 Q2 Earnings call transcript

Company Profile

Participants

Andrew Littlefair	President & CEO
Robert Vreeland	CFO
Eric Stine	Craig Hallum
Rob Brown	Lake Street Capital
Dushyant Ailani	Jefferies
Manav Gupta	UBS
Derrick Whitfield	Stifel
Michael Blair	TPH
Pavel Molchanov	Raymond James
Ryan Todd	Piper Sandler
Patty Zhang	Scotiabank
Jason Gabelman	Cowen

Call transcript

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Operator

Greetings and welcome to Clean Energy Fuels Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Robert Vreeland, Chief Financial Officer. ahead. go Please

Robert Vreeland

Earlier for operator. Clean released Energy Thank second this quarter results the XXXX. ending financial you, afternoon, June XX,

did the XX a call replay release, days. the also being Investor the not on will available is website you be There company's where the of Relations the it www.cleanenergyfuels.com at available webcast. on section If is receive website for

or those date this conference like factors new the Clean section release difficult Factors to update forward-looking statements in begin, statements. statements information as that we'd the assumptions to of contains to this or information and actual obligation are circumstances the this speak of guarantee contained filed These in we that regarding and of any not and remind such date company of are in that Before some to such detail publicly forward-looking statements the described release. results news contained the on uncertainties from after supply forward-looking today. of cause involve company's statements Several call only forward-looking contribute differ you release. the could could The a in undertakes performance Risk predict. risks, Such are that no Energy's the XX-Q Form differences of materially

the GAAP results GAAP excludes EPS today. comparable of been of be is GAAP reasons provided the has X-K to superior in non-GAAP management call The press indicative considered the company's does adjusted Form should reconciliation non-GAAP non-GAAP and accordance information company's financial in prepared or EPS GAAP core on a non-GAAP SEC believe measures will EBITDA information. as and certain in with on results. which these why expenses Non-GAAP addition are and that be A be and between this considered to adjusted for results. release, The furnished figures uses not EBITDA the substitute business management directly definition and a should not reviewed to and operating company's company's

With Chief turn call that, to over Difficulty]. President and I the will our [Technical

Andrew Littlefair

us. afternoon, thank Good and for you everyone, joining

If I'm multiple that release are make to note to data we this on remarks my companies' hopefully of that it yet, bit many quickly press the possible. make so also a our that opening format and seen haven't earnings make will see get to concise, quarter. you easier changed as for juggling it your of us little highlights easy We want know I'll a vein, you important questions call quicker. it allowing going we earnings, And to in as to that more the

in. let's So, jump

million. to issue $XX.X high quarter, to it being was adjusted allowing improve historically over charged in XX% to the was the rebound utilities the this a quarter, California only normalize than of $XX million last gas year. by EBITDA QX Fortunately, of prices natural our began from second Not higher first

to RNG over over opening Thanks new the quarter ago gallons. XX% a to volumes anchored to compared our in fuel XX our the customer Amazon, in part climbed year by million stations

are in it's fleets. We expect and Michigan quarter strategically Washington in And with this continue can areas distribution additional customer I've nice and of Maryland. anchor openings in but year around as stations additional Amazon, Texas, State, these Southern growth a located through said easily planned to handle centers California, to in the key before, have large third great stations

by for the prices, to of warrant but nicely The tax slightly to has credit million in quarter fuel those $XX increase Revenue revenue non-cash environmental impacted lower Remember, including million million increased the and adjusted quarter upward three prices million. cash $X a credit The trends also positive in $XX since. in EBITDA, RNG and the reinstated for environmental It’s the the into supports and alternative our sheet held was year down investments began of years the Inflation for business from in remainder charges. outlook due by and quarter. the in and Amazon growth year Act our balance kept our strong second $XXX and was in rebound Reduction up has XXXX. this ago credit

our The but fueling strong adding continues, only at newly customers RNG not for our infrastructure. demand stations, we're existing through built

deal in time which the Northeast. one for in Company of Coca-Cola, the operating of station Washington our begun is several stations a Channel bottlers, is a to Liberty its that has Islands country's a Dairy in our Electrolux, large instance, trucks deploying Coke the largest will which place. fuel have trucks heavy-duty Trucking company fueling California at at Farms For are Clean RNG low-carbon Energy and signed in fuel State, and first trucks heavy-duty new stations. program Campbell's appliance fuel

recognized couldn't relationship. By Canada's I be a Western in over natural about to told surge And we for we the about respected Canada. Tourmaline, and the trucking significant leading market of of running the fueling heavy-duty you energy gas months, a company, Canadian on fleets. be recently foundation such and Canadian the this with hit partnering last three the more other on by companies. plan We last to believe a enthusiastic this network throughout with stations ground signed the have one our build partnership call

extension Big quarter Transit at big agencies the their continue Coast in Several business Our Santa and with Gold and expanded larger company Oxnard, saw stations. Difficulty] grow Bus additional Transit [Technical in core multiple to growth relationship with deals waste fueling Monica their with including transit Blue in California. new Refuse of second contracts. California us RNG and new the

heartened RNG volume EPA manned be should as investors fueling the quarter, RNG customers, XX% a with vote of average RNG announced increase final US when RVO for in an the Also significant confidence the provided three with during targets additional increase years. or second next as renewable for it the Both and supply obligation well targets.

Dairy QX with forward Rio operational two we're move Del to projects three the now and more in Our online by projects expect continue in commissioning we RNG end. own year in that have final Texas on production with the to

trying As I to said, remarks. up tighten prepared my I'm

just end in many we positive believe a I'll signs direction. by there pointing So saying are

heard XX-liter me that about natural gas times You've for tested new excitement the currently engine important several Cummins being is our by fleets.

significantly the So the by I at fueling a broader and only will it technologies market but with when hits have new industry and couldn't next of of greater uncertainty available, timing that the of one most manufacturers in the and cost will have fleets new time choice their the larger infrastructures. volume will lack only add be engine low continued Not This of year, produced CI we comes and better. RNG entire other reliable the tested a a world. reliable sometime

pleased are progress. with We our

with And I'll that, the turn over call to Bob.

Robert Vreeland

to you, and afternoon Thank Andrew, everyone. good

bounced our the quarter. from mentioned, Andrew results first quarter back second significantly As financial

Our under line our on were and largely of being the results negative second notable quarter was that with $X.X negative Texas operating quarter million for EBITDA a expectations remains with or loss variance repair. LNG XXXX our GAAP $X in attributed to plant, in the only million

on course, long but positive parts we're see for online, to could this have and XXXX, Normally, needed it but operations bring due quarter an back -- working of for to lead we the not did from per -- on did quarter item may EBITDA that $XXX,XXX it have of impact we more plant the repairs, get back in sure. it or a into diligently

largely previous call, Our factors improved financial from sector. coming results earnings we were on of mentioned of volumes for by starting the XXXX our the quarter up with three second the ramping trucking principally fuel our driven RNG first

Second, the the diesel. natural in we not we item the then commodity occurred is environmental price driven of credit retail oil did late at June. effect full which RIN retail prices, And the the by costs low third in really saw gas relation of saw margins prices, albeit the in to and favorable we fuel see increase run-up pump in underlying

RIN these put recent continue three the impact was to around quarter in into $X.XX results positively second factors been $X.XX. that's perspective, We're to weighted the realized And for average price that anticipating XXXX. versus that more pricing our our

So maintaining guidance. XXXX financial we're our annual

for results, compares operating ago XXXX, $XX.X year million the loss Now $XX.X of quarter. our looking a of million in quarter second second operating our year-over-year an at GAAP the to of loss

compared a warrant Amazon year non-cash downside, ago, and to million incremental the charges quarter of million the $X.X the lower On to includes RIN second prices. lower in of revenues $X.X due XXXX credit LCFS and

$X.X a tax the $X.X second upside, million from quarter XXXX On ago, fuel credit. additional of fair change the and alternative by reinstatement by our of benefited non-cash value to the due the revenue million in to compared in hedge of fuel year the

for million XX% XXXX in the million XXXX Our to adjusted of of EBITDA second second of adjusted improvement. compares EBITDA $XX of quarter or quarter $XX.X the

fuel as costs growth RNG and negatively XXXX some $X.X venture the And our prices RIN the and that's the well lower fuel as was operating of efforts. credit than offset when with impacted alternative second to mentioned, and prices while of in quarter the the 'XX, just credit margins, by XXXX 'XX margins, the effect million tax that base I our underlying lower service plans joint more the LCFS higher and compared associated around

last we EBITDA over improved adjusted our effectively, XX% So by year.

one I for model margin, component to drivers where where a financial that's testament have compensate multiple diverse we our think of another. can

components of continue will have our we projects supply as business, going and EBITDA quarter dairy last did RNG into we being the forward, are disclosed As service. placed particularly

second our So our business, business. $XX.X million RNG million breaks of down the coming negative having coming the said million quarter from $XX.X from $X.X EBITDA for distribution as XXXX and a adjusted that, of supply

spending, our then say, $XX XXXX. I've adjusted in business which in the plan capital included posted the And our lastly, EBITDA a that's with company RNG call million for on supply remain business in on distribution and consolidating for we I'll presentation million table our $XX of about website.

to have over that's our related that Although, that's sheet us to the business. that's I'll we note supply off available $XXX that JVs a balance also RNG million in little

call with open And questions. operator, the that, please to

Operator

you. Thank

Please And comes conducting Craig be a first [Operator now Eric session. ahead. our will question-and-answer from We with Stine question Instruction] Hallum. go

Eric Stine

Bob. Hi, Hi, Andrew.

Andrew Littlefair

Hey, Eric.

Eric Stine

Hey.

just update. could you hoping give So an

a prepared the did bit remarks in You the upstream on little RNG.

have So it operating expect to by you year-end. six like sounds

construction the looking number also of Just what curious engineering phase beyond you've that, then and pipeline I given think in past under like. your a is

Robert Vreeland

Right, right. That's Eric. right,

now. number construction that of engineering X of X used and of seven, the final that sheets And So there's of next the called and then before. Phase are another you'll six throes level signed I've what's kind have term engineering, that the in in kind kind

that four And continues so, level be of that, have in we 'XX. about those to will course go And behind more engineering. that due early into And diligence are pipeline then development and X construction in then earlier, our everybody just that are projects is on pipeline. a mean, team we're I are bring to XX has work large continuing in the to another There's trying robust. those pipeline the and forward. of upwards that

continue about feel to it. good We

six, Some little of projects than these ago, thought very these making projects. longer we're have a bit months but nine eight, good progress taken on all we

Eric Stine

mean, of to that maybe And XXX credit I think I with number just you've you? -- talked an is better, RVO with interim thought million kind there curious, is prices the there still, and about as any mean and the expansion gallons is I target any

Robert Vreeland

I think we're working number Eric. that's No still that's still, the using, that

-- we Bob, bringing to -- other M&A, work and others in projects we that there'll of that under perhaps on under bring and often from have to I've them forward that is projects, be in developers. are some we, development acquire also by As said terms believe either opportunities continue

And feel that confident number we and can get we like there. so we that

Eric Stine

it. me. from Maybe one last Got

on curious, on are were Just the using those certainly that positioning places and color stations, I'm that out though, build their is the in as Amazon this supplier. where Scope how mean, strongly I good use them I that urging is instances Amazon of is their, you other demanding those. fleets Scope suppliers there -- gas seeing part well as their of X -- guess, emissions? X what Scope are or either natural or it with

Robert Vreeland

said they haulers, let very really Amazon the that for advanced have any discussions their but to more going the have having haulers. different had AFP Right. conferences that, their RNG past in where we're we Well, to that with constructive speak they've third-party introduced I'm

them on And so, we've worked with we, that. and

them. So haul those they'll to we the that with for RNG optimistic into fleet trucks bring continue feel that their heavy-duty

So will we're but all it's tell how that their exactly out, plays kind haulers. work know continue something I on that they time to of, with

Eric Stine

you. Thank Okay.

Operator

comes question Capital. Lake next Street ahead. Our from with Brown go Rob Please

Rob Brown

Rob, and or Andrew morning, Excuse afternoon. good Good me.

Andrew Littlefair

afternoon, Good Rob.

Rob Brown

How is year Just that running say are to are many detail little wanted yet your kind more where kind now go rollouts, a how to Amazon next on and how in into of get sort for of bit of the the plan? fully -- terms would that's of, and many you stations year?

Andrew Littlefair

Rob. Hey,

we me -- we end Amazon open. almost let so I've and with a stations in by year would less ago me, Let have thinking this the what while here all if what do we maybe year announced -- have XX far that of little was a this one year, is said

that. So important very This we're track is still on for time.

from loaded We redeploy heavy-duty right accommodating now remainder with not about now. that other loaded that stations, we are Amazon be of now, different stations that network excited that at the XX that'll lot they We the because of is are may we're and or the in trucks have get kind opening overnight that will have immediately that of the this before of network, they a a lot parts year. said will online right in base that fuel stations. And I've trucks come open network And of really we trucks these fueling may be now. these though very stations

the working of and Amazon, is So as we wanted kind to. it program

fielded the volumes up, you that tell coming online. our trucks. they've we're that many seeing X,XXX more can And in I has as as going are think Amazon by trucking trucks said those or

thing. So Cummins deployment to this also is the deploy what significant look fleet. fact these what some to they to for XX-liter introduction these used about. mindful is XX-liter, is would fleets the exciting develop in with fleets begin different with fleets customer be that's force the significant that begin sales that summer -- on as at other will I'm are like bring this that like We're I these an other they think excited how one their very it's as of that Amazon That's hard with the our testing now they It's working into national and programs to XX-liter. very

Rob Brown

there. kind better being impact -- of the through? overview RNG more the Thank pricing And of then coming sort RVO demand kind settled. you. on you do the do see of business sort your Thanks for What volume of kind or specifics on of RIN better you see

Andrew Littlefair

incent mean, But the first final program, Bob I for electric the you That, RNG to Well, went help the obviously, some might to know, didn't I'll vehicles. that let remember, here. impact place. that you go as initial saw saw rules called I -- perhaps the is, into regulation, you make

the may, back thing that come point [e-rent] Now some at (ph) see. they we'll

strong it put can using I However should for that very into now. endorsement see transportation, recognition duty this a no there is, is and heavy gas it was be something real for be think that way a natural powerful was and that place is there I that, right renewable around happen

into something is RIN immediate something of the settled first that The we saw $X.XX, from overnight thing back $X price, around to strengthening right, around to closer $X.X.

that's you of three RNG the that the next be you RVO, years, so required significant, going of the that strengthening. are So they the will remember many in at to grow obligations, that'll move was And terms that XX%. when obligation over then often, about because something forward that in -- used of neighborhood. up XX%, in look kind increase projects Rob, to that there so works, the And that they

years. growth rate there's So XX% a over three the of next kind

strong very for RNG this transportation So as it's to and together, put you all in in generation me, well. and

Rob Brown

turn over. I'll it you. Thank Great. Okay.

Operator

with Our next go question ahead. comes Jefferies. from Dushyant Ailani Please

Dushyant Ailani

Hi, question. for the actually wanted have stick I my RVO. Thanks I taking guys. just to question. with one

is think potential given? you to think pricing in the are? pricing, stay initially had guidance, -- -- if Do they with what the do where you any the run-up guidance upside RIN that you full-year about what With there compared your the

Robert Vreeland

gone as we situation it's, there and very Dushyant, that storm question were headwinds RIN had with from to Well, was fact were what helpful. to quarter. the first that, little factored this But Yeah. we range. frankly, is and a in in on certainly I'm it's more some why may within California weather one I -- was guidance, because there like how that be a in could up that our than being cautious reason our able think the it's have some because we the would maintain that -- factored the we

Dushyant Ailani

over. Got I'll it. you. Thank turn it

Operator

comes Please Gupta Our ahead. from next question Manav go UBS. with

Manav Gupta

Andrew. and Bob Hey,

come on out. everybody a first the there higher within CARB So CARB up, possibility program of is very that the weeks, chatter be reset, and few final question if the strong is a that reset meetings even side. and the doesn't which There regulation growing the helps looking at next is would then there

any talked insights on So on that CARB. front? to front, obviously have you you that of from we Do kind

Andrew Littlefair

is Not Manav, suggested kind the I been program, published end the that the of happen, The of the will, altogether chatter forward, in the think the could new in are if the new that two or the clear, right. outlook, next weeks that. be regulations you new you're kind here of the go month. at of works. timetable It’s

even it's So be you there effect in know, I has a Board kind year, rules into of be part it's move forward of Manav, then Then, will late then obviously will then the those the That for and it sometime, the XXXX go in believe probably to then in -- I XXXX. approval. and as period CARB early hopefully to could for late think coming. comment

this Our -- great commentary lot in view a a the is the of been that is has opportunity.

the worked in and that very general been has a there standard low think that effective. it's I the -- understanding California is carbon fuel

or carbon of from And obligation been, available. that were and there's XX% a actually you Lower you available, to that the would the has XX%. fuels industry enough studies There's there's as could choices enough remember so XX% XX%, reduction state XX%. commentary it from there so could make fuels beyond the -- that is carbon there actually go the that renewable RNG from increase

I'm to the I so they is side, curve. or obligation not see think that state. on the do is opportunity that's here, for that the not targets, like the thinking but I'm in to Lower that something you great -- a could carbon, used closer CARB beginning to tend increase speculating this whether on it aggressive understand then, to looks the increase the being XX%. And the me,

I of be all mean it this you for tremendous that would Now, would -- would think us.

think I that can for state, the be are business. us RNG constructive need pricing will but should of all for great state in the it'd RNG LCFS be it tremendous those be the The get. will to going forward. That

And I I market think to on guess a likely you go I And targets Manav way response able of the have the year, out going goes it see obligated into this aggressive side, as is kind early. once the course, if of been and this LCFS would be would then to mean think would clear becomes parties. to strengthened to four what next it

working fingers our hard. So are crossed. We're

teams staff, go to them members, -- a We're that's stated I are being fuel Board of have ARB reduction Our to and ready government in the make help XX% those goals today fully that's that we its XX understand by move a the State with think regulators working. toward XXXX. engaged can

to them it's for targets. their to they're So hit going aggressive stated necessary if own be

Manav Gupta

of the anything be RNG somewhere CARB know you well, I firmly that you part to RNG. this have not that of agree don't with be side keeps believe heard out the past, and -- under out I I that, be you. up because or we circumstances. RNG, not we CARB but kick is kicked somebody one should have addressed should it program in any have on is popping agree with says, and supportive the question going

Robert Vreeland

eliminated. do and that there suggested eye that dairy, have And methane, somehow Well, the I low believe Manav, carbon in and program eye. that to are you that that's the captured be it program, standard those should fuel should you see be some not

that together not have program diesel so sure would wants. our And renewable ARB it's they hit carbon. sure I can clear is you that's targets fuel, the what State eliminate not I'm which that you that want, if mean think low, all a of would in California. in you this low I'm exactly the

different that So important kind that has is -- want would I'm so low said not we but I the program. ARB think better believe an I saying of that workshops that, believe, renewable fact of about carbon gas feeling the part those at industry's natural And is there the fuel recognized. aren't standard these

you'll I you’ll up case. So that seeing end see end think be that -- believe don't I the up

Manav Gupta

My 'XX. front? your growing RNG sometimes just you. when here give credit which your growth, something with and remind volumes in enough could so third-party you is we, looking you volume question for the agree 'XX people I party last is 'XX, are is, everybody, how on third pipeline that don't How

Andrew Littlefair

I it's would all looking well volume this Most Yeah. third and it. planned of is year party. as our Well, -- -- we've

tap that securing, growth third-party come the we've we RNG XX So that that they suppliers, to out, rate sources and kind work of there's a goes continue on behind laid online. as and good the of we've lot got that's looking into and over

good partners have space, BP, acquisitions. their are in with that We recent particularly that

So good we're feeling about.

Robert Vreeland

we the It's fair bring though, transportation. of we, account I XX% mean point -- in RNG or XX% still Manav, in about all for a we

that's there. from out RNG provider almost source we every So,

our that see really So that is, XXX almost sticking of another on area, laid we need we Even million, good front we RNG. at the contracts. earlier million XXX it it. as on gallons And plan little works trucking million end the supply, our need XXXX, looked yeah, at with in you and gallons that we equity we still own to call, growth of with but about over XXX need relationships that going we're -- those cultivating we that we if out hard, those the the a called we're have on growth was team and third-party and mentioned for that have bringing of

our of forward. business part important an it's going So

Manav Gupta

Thank you so much.

Operator

Stifel. Please question comes from with Derrick next ahead. go Our Whitfield

Derrick Whitfield

for thanks and my taking and team, question. Good afternoon, Andrew

Andrew Littlefair

Sure.

You bet, Derrick.

Derrick Whitfield

do XX see of been quarters. pipeline, to to regard few kind you impediment opportunities greatest your engineering to in level the contractual for that With the XX into those What advancing is at a phases? it's

Robert Vreeland

Derrick. don't know it's impediment, I if an Well,

think they and interconnects bit solved reality of just terms these the and lot a terms cleanup there's it's of to are take newer and each I engineering, be is on handled. dairy in what the composition in of right, considerations the of some different little that how and the needs

And a so of that wish less into. just these just things and be a go make time, still to lot you I there's believe to we'll over it. able lots to we I there's that bit custom, but happen And projects that if these go has will, learning a go. into little as we're

engineering handle experience able gaining with lot to it. a folks a team here out teams, to and we're Now be our and bigger our construction now built we've of

But we've on, they meet a carbon figured that returns meet, they bring through that the equipment. do get but that impediment. a particular I certain don't some now. we'll forward, generally think at ago know cleanup we that's not resolved I sure things We the saw technologies intensity where project itself the that fuel and bring year the time it's steel. time well get phase take to any to on. situations necessarily you and some and it's have It's better on But with and designed time engineering these some take, long that can as had going lead spent it make at probably

Derrick Whitfield

sense. Great. And for to maybe over shifting my That follow-up. makes policy

think in business around the how the your next the we ITC, have over we should about place CapEx rulemaking implications years? upstream few that full Now for

Andrew Littlefair

whatever Derrick, Okay. Well, would period. I motivated to the CapEx within we're accelerate say ITC

we're take right, under mandate, And of to our so of are we're -- it. advantage projects -- we to managing kind managing

mean number of Act. a I Reduction in we First and we that fortunate Inflation foremost, the had projects before place were

starting that and So end on on of was gravy kind kind the 'XX conversation but top returns, definitely as we're end construction the it's the of of the of is that. part by on now ready of timing

much take we're of as that possible. So, I to trying mean, advantage basically as

Derrick Whitfield

you that. it potential to XX% Do see follow-up the a range just more you? in as Maybe to benefit XX% for the

Andrew Littlefair

-- things, million some to that can going the of looking they-- range. but Yes. domestic frankly pretty projects are with -- think in number front and on you content Yeah. There $XX is the there good from nuances there a are that $XX, I

Derrick Whitfield

That's great. time. your Thanks for

Operator

Our next question TPH. ahead. go comes with Please from Michael Blair

Michael Blair

a good Hey, you're and Andrew of XX%. share to volumes RNG looks record like afternoon, rose total Bob. It

congrats that. So on

past However, what capture much two any has related, these structural timing we been there receiving RNG volumes? Is system, lower how have on of percentage-based revenue you're in in RINs your RIN quarters been these saw or just revenue a changes for XXXX. it

Andrew Littlefair

market just I of structural look to think, we Matthew, we on kind mean, you LCFS. but nothing -- No, normal that. at at kind of dynamics, I look have together have also both

structural changes -- it's on we -- at standpoint. is So, from with seeing There going but just it's our on the think money we're that. all And there. Yeah. together no I it look with and LCFS still just comfortable and activity good our their normal

Michael Blair

think Sounds what's XXXX this remainder Texas good. in of for outage? the headwind XXXX. stay mentioned And total happens, EBITDA then, approximately you down from LNG Bob, the plant I that may If the

Robert Vreeland

I it, this mean, testing quarter, necessarily they mean have equipment won't what some I this happened going we're on sustain that really -- of but quarter. we're in going I to that. work try will So there's say to to still capitalize

negative it, or generate were depends $XXX,XXX you, a how So if you that in I to look what on which if neighborhood could if at frankly, that $XXX,XXX. our and a it $X.X what with that's to it because was effect, view, about million we $X really negative come should second million up you have then, my is was of EBITDA. that that -- quarter And said quarter want plant made more is in in we

considered, So things And a at million of kind of couple we or little and operating not. plant's rest be or all a our and again, was enough of it's binary. guidance could just factored the it's that, that the that I'm looking that headwind -- bucks year more. either like, of It's

out. the get So kind just that doesn't so it’s activity, -- absorbed a of it into called normal little we

get and that will have flowing repair a get we'll impact. but some So that in,

Michael Blair

Great. Thank you.

Operator

from comes Molchanov go Please question James. next with Raymond Our ahead. Pavel

Pavel Molchanov

the a question. strategy statement Thanks that also was you new hydrogen there to lot hydrogen on can talk statement policy, guys to kind just for a economy? taking on the for a California. of comment your about CARB today, Governor Newsom had about you by questions for approach We broadly specifically a of but be more little early literally Might green

Andrew Littlefair

and who on our hydrogen thanks. mean, that of in have of, may you Board, would have I discuss we is on lot Pavel, at Station. the state-of-the-art and think that what so has a hydrogen now say California hydrogen who ago on brought We've XX our have what a kind Pavel, Directors, one of fueling would talked for about LAX and the of don't Board today we Board at edge comment it on and rotated almost customers. our new for state we we time, I built kind hythane. had been of recently I've actually actually the a policy We've a years, We the station I meetings, we how a our Yeah. Board hydrogen have cutting with got announced member, this twice call station I in Governor Canada, Years though. participate. clear since of often off station this, into our fueling we

build provide hydrogen. four of properties out our RFPs stations with transit we and where for now right We’re them three or would

see RNG future. most likely a carbon of that one the in for hydrogen low for feedstock could We solutions elegant the be

to the cell us out, are pressure on we but industry count could high of able vehicles, to having the don't to there vehicles RNG with fueling deliver to there And to We be that, be with said we my kind some, pipeline discussions running work to but a companies industrial expect to locations working along Now we be yet. come be to able ongoing them. hydrogen of largest more hydrogen the the hydrogen we reformed and see some go in need country see have with need the station while future, is at through in needs believe that the fuel just way fuel, understand that done.

to be player we'll We think that that. have in a RNG

Italy. company a We a have in a -- XX% that's in and compressor we ownership Canada have

We bolted very well compressor now. have hydrogen doing and acquired a that there on that's right company

a gaining about future, it's be out. go to hydrogen are to the always So network how of will bit, There lots little our understanding but ready Pavel. in we're deliver

will, to super there trying our be the might about will in hydrogen. if to I provide you program, because are We think low there made carbon participate be available RNG learn or low-carbon fuel be money standard

will participate as the for think So, hydrogen play clean I economy. innings us well be in anybody as deliver as to but we're on be have there'll because it. kind there we're of in to energy well, think positioned the I Though, able a early how we infrastructure

Pavel Molchanov

with a but to in a sense obviously recent north become? in big shifting deal station your maybe have do that, bit then of can And ultimately how Understood. Tourmaline, fuel network days early still Western that Canada

Andrew Littlefair

Well, our for that just Bob, things. of company. chairman at of actually committee a our joint is development And, couple company the

a to of involved speak as in a got to. diesel XX I've almost base have him been Canada first resource you've got you a it years, natural Well, let huge important couple compared of in in little bit. for Canada. Canada And things. gas So off, expensive I'll pretty But

in economics, have largest good is very have you producer So a -- Canada gas important our very partner. you

Eastern stations we of so corridors the And traveled some Canada. in some have on highly

program to building we're from venture in of would truck out they Now, Canada, XX where think lot this that start right and focus long, We'll activity to we're I to start. depending joint that now and a West -- believe contemplates Western our have goes Calgary friends stations going think, as that start could or at you with be XX start stations Canada. I And in out then XX. demand, we'll, we'll then let's many need move as five on Tourmaline going eventually, to there clear, Western firmly, four

Robert Vreeland

but companies first our exciting, a Calgary. it's time. it's at largest up, fleets to So working bit largest We'll for of four trucking one Edmonton get we've stations in and station purchased fueling we're We're the our already of little take just with those land the going now.

online. about the first those bring potential. more We'll four stations need quickly and gauge we'll begin excited So up we get how we're to to then

Andrew Littlefair

natural $XX And with diesel fuel gas. and -- Canadians. agreement the The the with to displace is, million seeing it's their be frankly, there. we roadmap nice Tourmaline is can was and as motivation them there, start The working initial

this kind very of up start because in with which to each synced is the the good million is important $XX first And wave. engine, timing the XX-liter So Canada.

And really the And so stations coincide three. fast truck -- meaningful will will going on I kind -- big of and we is we important really and in so late kind be be of remaining are 'XX look we about as before station really now the But about. is to talk the into necessarily not in up and then between running XX-liter as going mid from make with looking coming you're will coming but, can, to to just to these of one which volumes, then and get that this. progress 'XX, some

Pavel Molchanov

a somewhere Long the years guess more started How participating space. is that maybe you Last Beach, Two think recently ago, radar, Adopt-a-Port on I little project, question. below marine is else This for on this I the going? kind bit you. of in

Andrew Littlefair

around it it's Pavel. there's in-year from been you, the where in we've in -- That in shed involved Thank we the quality not California The in air for the air good. that to, is just effort port. haulers this familiar, the be the and a those is Southern the No, ships, beginning dirtiest and been may port.

will. of this be you Chevron, port we effort the where with their topped tranche, air a adopter it off And couple what up money and working at with we renditions been spent have, balance And there's of a with Chevron will has program, trucking will call we've largely clean programs port. new where sheet, using put so which is be, if now Chevron

are we'll customers in new fuel the certain of buy gas buy made are amounts to grants then, They here obligated supplier natural and deal trucking have to those the our to We've our stations. purchase our That's And RNG trucks, customers the then as port at trucking may grants is stations. public from some that Chevron. that Chevron. from us well our at

trucks kind into RNG brand a the it's new, which carbon port. win-win-win, So low super is of

got we and program. of to almost add the in the hundred We've in trucks off of kind in topping about to another to think that. funded through couple of I've participated that are XXX that the Chevron have I get to it. talked get kind have queue there money that's

I expand supportive think been they're of very -- program and it. we'll they've probably

new you a of grant you've lot to through. and there's go It's buy to not things while got and because a takes it -- truck public have

XX With So of like as Pavel, zero the as same port. at XX, it's those that of there, know, successful. trucks, RNG it, statements in I fast all the any not been operating going XX been to the zero time, it's public us don't XX, would apart. electric I trucks. XXX, but probably mean operating trucks probably maybe about trucks port, XXX we're down We've XX day there's every in electric there's got

success. So I think it's been a huge

Pavel Molchanov

Thanks very much.

Andrew Littlefair

Pavel. Thanks,

Operator

Ryan next Our go Piper Please question comes Todd Sandler. from ahead. with

Ryan Todd

start you are your earlier guidance know might earlier? at What earlier. was transfer the as look guys of those? question understand for the terms need What on until, the what monetizing of of to comments the bottlenecks if and Maybe like, Do ITCs. -- point far of expectation that couple on the like just you a could of the start -- a pricing what provided from is some a timing of ITCs event? There you some these are in some on what's as I this some Thanks. clearly your for ITCs do wait understand, I XXXX it? you to some follow stuff monetizing monetizing IRS the you to Can up you

Andrew Littlefair

all the expenditures qualifying going There's Ryan, at would We're not say. through locations. I really bottlenecks, the the process of

all, are got process, folks transfer expenditures, are frankly, on taking 'XX. of in kind we're we then following we're the out will understand it of and qualified of looks going market kind to the it a be with our the like. process. that time. capital, but what not our coming through the that then what doesn't are we're that. works, believe you need the more and go that terms I've mean So a putting making, clawbacks up I'm transfer kind of market of when CapEx rush a we're feelers teams, like the and that and in And there I what sure I'm making through

projects And this buttoned principally 'XX. we we're kind counting on in all of So want the to it money down. of have wave for first

Ryan Todd

you. thank Okay,

Andrew Littlefair

and goes XX% that but total monetize intend partners, the the value to transfer capital we we of With our the into we, ours it. get likely that project,

Ryan Todd

you you of visibility engine? over year testing the And potential on signs And heard early you of the on ongoing -- out the you perfect. mentioned maybe that That's there? in around tests any like of helpful. some of earlier uptake anything think feedback, terms Okay, do or feedback milestones might when around then you play when on early the any Have how next the and and might engine. thoughts earliest XX-liter timing see of signs might

Andrew Littlefair

Well, sold this XX,XXX had -- China. gas China. new heavy-duty not Well, engine And you I success engine. mean right? everybody. of new to we've think is they've they know, exactly natural I kind year with think in it's great last I these a important first, had It's remind Ryan, of just in this

same. has engine engine, it's this but improved now on it's, in So that many the essentially ways

for understand, So it's I introduction. untested a This brand important a listening new really isn't this to of heretofore -- those this is a alpha, that isn't product. think test fleet

diesel. and they've do that that after all. they it these -- that want in name everybody And sure right, a got because -- their So careful is the very to about way things, are make this Cummins they on not that's rush. They do

in So some have of up hell -- hear Americas. important Cummins whatever gates fleets testing that they I the used five lined just I to about. largest of talk about or think the it's But

Amazon this is is -- FedEx and and this UPS So Walmart. and

the tail are on they're they've not, got Knight-Swift planning buy stepping here J. big all trucks not girls that really their B. they're boys So and can Hunt. and involved, and Werner because

now. this So, out I in this phase happening those are will feel important, and summer I there that really there's that's and think XX-some introduction be

here, that over Grapevine of the tested and in heard stories those get toughest good Mountain. know anecdotal far. acceptance sort and heard to don't of Now, California some being want I are we've but the we've topographies the Rocky in ahead of so driver from things Cummins the We

So yeah, Cummins I is the in economy fuel the think would heard that's there's be an improvement case. said which what great. We’ve been

QX, I great. the think, I that don't I'm book a was takes than that's not always QX. latest, that's maybe supposed than order this to opened we be know we in how So that I longer other think know little have the going. sure

some be of to though when to -- serious early the go? is for you'll What I begin up. of it order these get that and or will late you're for like. what then though, it that late 'XX. say it year, It 'XX but looking those And we'll at orders will orders here feedback? some Don't And big to get if will point is did those sometime safe book have be think QX 'XX how look milestones, it's fleets. my be this either built interesting guess. in open to for look in initial guessing I'm into see

we've that put fleets if was the substantial that. past two. these that more it saying XX-liters, past doing and we know buy here now mouth now, orders, with I than think did days. XX.X-liter, can Years fleets we're Cummins and ago, take I will is their anticipating I more they think moved We're when be would in the substantially words that first, I

be And five. of going so not hundreds it's to I think we're thinking orders not,

year, that's guided that us have those that. that's of turnover excites so And buy And finally to every a good lot trucks big what news. and we've

and something an got diesel are the XX-liter engines we like that after we've Finally, sold, haven't XX% engine it. accounts the for engine had all of --

for important this think is I the industry. So

Ryan Todd

Great, thanks, great that's color.

Operator

from Our Zhang next with Patty Scotiabank. comes go ahead. question Please

Patty Zhang

taking Hey, Great. questions. Thank you. afternoon thanks my for Andrew. Hey, and Good Bob.

kind just demand. on trucking first question of is my So

on production of heard having e-commerce, we've So, weaker and some impact softer demand so industrial on shipping logistics. other and

So your volumes if was curious had any all? just at I on impact that's

Andrew Littlefair

haven't. really We

oftentimes I the that mean get the natural most. haven't are the We ones engines seen really used gas that.

of down on to So if mix. gas be back pull engines not there a is some little natural going of going that, out the to it's, they're

Robert Vreeland

the volume our is not [indiscernible] just that case. trucking I up. I'm that's limited Sorry, to exposure haven't mean it. numbers in it doubting seen been We our

Andrew Littlefair

now. something or Not we right managing are through around

Patty Zhang

your the then And midpoint of Perfect. question going Great. guidance that $XX Got you've the on year and to kind back same, kept half we're million reach of second Great. to need about the the full-year it. in there.

gives least remainder So you're you ramping margins give us volumes, what of you RNG I then specifically a you about can at the quarter. what bit that? Can more you mentioned $XX million to color year? talk favorable a for and favorable on maybe pricing confidence credit And credit know assuming reach the maybe for pricing, Thank the you.

Andrew Littlefair

not, up RIN It stays I'm but assuming there Yeah. right Well is kind possibly the where going I'm of higher, could not kind of on that. it -- around well go now. I'm maybe that I'm

good of there. too. it So kind And we higher that I is us feel right jump and that the than LCFS RIN where keeps was could go now, and, think that

the was higher around we low initially for you forecast, than a XX. quite Now, it's, like if XX, which it's what our bit XXs, will, in this year, had

So already you're we're seeing from improvement some already kind of, that.

driver on biggest The that talked volume. about, we've is, will as be

we're first talking of that external really that's margin I They really we what and mean but factors the most, you're there the our a millions helps of the the the, meaningful. trying very that's the a RIN, I bit mean, from as all frankly, definitely is dinger meaningful, So multiple credit disappointment Absolutely. to around favorable are recover but are in ultimately important. mean, -- we but the more view. in quarter, stations, there, are the environment I those, the us about dollars all open where looks all get drives

would really, it's that So the a ramp-up. volume, and

We'll see divide don't get how continue, necessarily two. you balance So there. a we'll but that's ramp, we for the the by year

Patty Zhang

Great. Thank you.

Operator

go ahead. Jason Our next question with Cowen. from Please comes Gabelman

Jason Gabelman

Yeah, hey. Gabelman. Good It's Jason afternoon.

Andrew Littlefair

Jason. Hi,

Jason Gabelman

I'll And hear frame for credit and current should I given those And beginning for RNG up, potential RINs, fuel the remind and about you when tax earnings. out on they year. as the guess the dollar Thank positively this gallon to back from tied earnings see could to start you. gallons limited volumes timing of LCFS you And -- then that uplift contribution potential outlook us in there. you the clean we and credit on go if upstream ramp per that. sort sounds to the wanted contributing that, to there. like the it comment to maybe, when leave prices I expect process just to we producer are finally, the But the certification do can your the

Andrew Littlefair

Bob? those, got You

Robert Vreeland

Yeah.

the right, contribution, Jason, the On well, you're on not -- really meaningful.

a the net supply, maybe 'XX that certification really, RNG because from fact, of In bit from drag of that process. in little

into that stating the able later that going assuming really then So that's get can be that's 'XX, to we're time going we monetize are into we're here, be been, I before months. to and to mean and we these commissioned XX look as taking the on LCFS

of So half that's towards us that puts 'XX. latter kind of

contribution minor, go there'll be into, I'll that the but say, in from be 'XX So year. commissioned will that in we the this contribution projects 'XX,

you're markets stand best going of, give now. evaluating LCFS and where our with what you're guidance there is at what to, that going I go from But out things optimization the RIN, the are and time that. point mean, different going then before, because makes be. to 'XX will we're you're into there monetizing Well 'XX, certification to that take right injecting is On numbers don't process, what's to I always standpoint. sense monetize, and specifically DAS the to construction want

this what appropriate store producing, gas to right. for if we is Maybe will and don't -- price. to I then certification long, get get have the we we're don’t then with -- be we're and wait And that into, the we we an want where 'XX as So steady in do all. it don't we process

Jason Gabelman

lower of anything bound when credit, low-end timing without we if a thoughts Got high-end heard the it. comes just then negative you've and from allowing at on on or carbon intensity And hear if on greenfield Beltway inside -- in tax update. producer could an the in terms the it

Andrew Littlefair

Okay.

that. heard haven't not that, anything on with We

that, we're see -- know So, on can the gets, well, $X XXX get to we that tax per $X, that on don't that, negative of XX. anything meaningful but I plays gallon large out, if have gallon category. a and see beyond, that how production that we'll listening kind others the We'll credit --

Robert Vreeland

that on that. We timing that or anything with the haven't would deal promulgated the or be might heard when when of Secretary

Andrew Littlefair

We're heard we that have listening that on we we've up our haven't out, yet, Jason. No, and yet. gotten -- we tentacles haven't -- anything but picked

Jason Gabelman

it. Appreciate Understood. for Thanks answers. the

Operator

no further to at questions the ahead. Littlefair closing I are would back turn Andrew over for Please time. like to floor comments. There go this

Andrew Littlefair

evening. for next Thank operator. look in you everyone, and us Good our on you, to And thank Thank you, forward today joining progress we time. filling you.

Operator

call. conference concludes This today's

You may and at participation this disconnect your Thank have you good for your lines time. a day.

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