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What changed in Clean Energy Fuels Corp.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Clean Energy Fuels Corp.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+376 added−409 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-28)

Top changes in Clean Energy Fuels Corp.'s 2023 10-K

376 paragraphs added · 409 removed · 309 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

89 edited+9 added−6 removed99 unchanged
Biggest changeSafety of our personnel is a core value of Clean Energy and maintaining a safe work environment is critical to an energy company’s ability to attract and retain employees. To support the health and safety of our employees during the COVID-19 pandemic, we enhanced our safety protocols to promote the health of our employees.
Biggest changeCurrently, two of our nine directors are female, and one of our nine directors identify as being members of an ethnic minority. Safety of our personnel is a core value of Clean Energy and maintaining a safe work environment is critical to an energy company’s ability to attract and retain employees.
“Management’s Discussion and Analysis of Results of Operations and Financial Condition.” Fuel Sales We sell RNG and conventional natural gas, in the form of CNG and LNG, as fuel for medium and heavy-duty vehicles. ● RNG is injected into natural gas pipelines, which allows RNG to be transported to vehicle fueling stations where it can be compressed and dispensed as CNG, and to liquefaction facilities where it is liquified and made into LNG.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Fuel Sales We sell RNG and conventional natural gas, in the form of CNG and LNG, as fuel for medium and heavy-duty vehicles. ● RNG is injected into natural gas pipelines, which allows RNG to be transported to vehicle fueling stations where it can be compressed and dispensed as CNG, and to liquefaction facilities where it is liquified and made into LNG.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies, dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance consumer acceptance of their products; or exert more influence on the regulatory landscape that impacts the vehicle fuels market.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies, dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance customer acceptance of their products; or exert more influence on the regulatory landscape that impacts the vehicle fuels market.
Increasing supply of RNG through the development of new project opportunities, expanding our existing supplier portfolio, and leveraging our extensive fueling station network and customer relationships. In our view, the market has not yet unlocked the full potential of RNG.
Increasing supply of RNG through the development of new project investment opportunities, expanding our existing supplier portfolio, and leveraging our extensive fueling station network and customer relationships. In our view, the market has not yet unlocked the full potential of RNG.
As a comprehensive clean energy solutions provider, we also design and build, as well as operate and maintain (“O&M”), public and private vehicle fueling stations in the United States and Canada; sell and service compressors and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional natural gas via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits (collectively, “Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California and the Oregon Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits, grants and incentives.
As a comprehensive clean energy solutions provider, we also design and build, as well as operate and maintain (“O&M”), public and private vehicle fueling stations in the U.S. and Canada; sell and service compressors and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional natural gas via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits (collectively, “Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California, Oregon, and Washington Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits, grants and incentives.
Many existing ANGH stations are located at Pilot Travel Centers, the largest truck fueling operator in the United States. Chevron Adopt-A-Port Program In 2020, we partnered with Chevron Products Company, a division of Chevron U.S.A. Inc (“Chevron”) on Adopt-A-Port, an initiative that provides truck operators serving the ports of Los Angeles and Long Beach with RNG to reduce emissions.
Many existing ANGH stations are located at Pilot Travel Centers, the largest truck fueling operator in the U.S. Chevron Adopt-A-Port Program In 2020, we partnered with Chevron Products Company, a division of Chevron U.S.A. Inc (“Chevron”) on Adopt-A-Port, an initiative that provides truck operators serving the ports of Los Angeles and Long Beach with RNG to reduce emissions.
NG Advantage also has the capability to transport CNG from production facilities to pipeline injection sites using its fleet of 99 high-capacity trailers. ● LNG is RNG or conventional natural gas that is cooled at a liquefaction facility to approximately negative 260 degrees fahrenheit until it condenses into a liquid.
NG Advantage also has the capability to transport CNG from production facilities to pipeline injection sites using its fleet of 97 high-capacity trailers. ● LNG is RNG or conventional natural gas that is cooled at a liquefaction facility to approximately negative 260 degrees Fahrenheit until it condenses into a liquid.
We previously entered into the following agreements to implement the Zero Now program: ● In January 2019, we entered into a term credit agreement with Société Générale (“SG”), as lender, under which we were permitted to draw, from time to time, through January 2, 2022, up to an aggregate of $100.0 million to satisfy our payment obligations for the incremental cost of RNG trucks under the truck lease or sale agreements described above; and ● In January 2019, we entered into a credit support agreement with TotalEnergies Holdings USA Inc.
We previously entered into the following agreements to implement the Zero Now program: ● In January 2019, we entered into a term credit agreement with Société Générale (“SG”), as lender, under which we were permitted to draw, from time to time, through January 2, 2022, up to an aggregate of $100.0 million to 12 Table of Contents satisfy our payment obligations for the incremental cost of RNG trucks under the truck lease or sale agreements described above; and ● In January 2019, we entered into a credit support agreement with TotalEnergies Holdings USA Inc.
As of December 31, 2022, we have not received any U.S. Occupational Health and Safety Administration (“OSHA”) or state OSHA citations in the last five years. How We Generate Revenue We generate revenue from selling RNG and conventional natural gas as a vehicle fuel, as well as by selling the associated Environmental Credits.
As of December 31, 2023, we have not received any U.S. Occupational Health and Safety Administration (“OSHA”) or state OSHA citations in the last five years. How We Generate Revenue We generate revenue from selling RNG and conventional natural gas as a vehicle fuel, as well as by selling the associated Environmental Credits.
During the years ended December 31, 2020, 2021 and 2022, no single customer accounted for 10% or more of our total revenue. Trucking We believe heavy-duty trucking represents the greatest opportunity for RNG and other alternatives to be used as a vehicle fuel.
During the years ended December 31, 2021, 2022 and 2023, no single customer accounted for 10% or more of our total revenue. Trucking We believe heavy-duty trucking represents the greatest opportunity for RNG and other alternatives to be used as a vehicle fuel.
Since 2008, we have served as the general contractor or supervised qualified third-party contractors to build over 450 natural gas fueling stations. Grant Programs. We apply for and help our fleet customers apply for federal, state and local grant programs in areas in which we operate.
Since 2008, we have served as the general contractor or supervised qualified third-party contractors to build over 460 natural gas fueling stations. Grant Programs. We apply for and help our fleet customers apply for federal, state and local grant programs in areas in which we operate.
We support this objective through a multi-pronged strategy of: ● promoting the reduction of GHG emissions and expanding the use of renewable fuels to displace fossil-based fuels; ● increasing supply of RNG through the development of new project investment opportunities, expanding our existing supplier portfolio, and leveraging our existing fuel network and customer relationships; ● empowering our customers to achieve their sustainability and carbon reduction objectives; ● leveraging our management expertise; and ● utilizing our environmental, health and safety and compliance leadership. ​ Promoting the reduction of methane emissions and expanding the use of renewable fuels to displace fossil-based fuels.
We support this objective through a multi-pronged strategy of: ● promoting the reduction of GHG emissions and expanding the use of renewable fuels to displace fossil-based fuels; ● increasing supply of RNG through the development of new project investment opportunities, expanding our existing supplier portfolio, and leveraging our existing fuel network and customer relationships; ● empowering our customers to achieve their sustainability and carbon reduction objectives; ● leveraging our management expertise; and 9 Table of Contents ● utilizing our environmental, health and safety and compliance leadership. ​ Promoting the reduction of methane emissions and expanding the use of renewable fuels to displace fossil-based fuels.
The Boron Plant can produce 56.0 million gallons of LNG per year and has a dual tanker trailer loading system and a 1.8 million gallon storage tank that can hold up to 1.5 million usable gallons.
The Boron Plant can produce 56.0 million gallons of LNG per year and has a dual tanker trailer loading system and a 1.8 million 5 Table of Contents gallon storage tank that can hold up to 1.5 million usable gallons.
This project is estimated to produce up to 1.1 million GGEs of RNG annually, all of which will be available to the Company for sale to the vehicle fuels market. bp Joint Venture On April 13, 2021, pursuant to a memorandum of understanding we entered into with bp in December 2020, we entered into an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture (the “bpJV”) to develop, own and operate new ADG RNG production facilities in the United States.
This project is estimated to produce up to 1.1 million GGEs of RNG annually, all of which will be available to the Company for sale to the vehicle fuels market. bp Joint Venture On April 13, 2021, pursuant to a memorandum of understanding we entered into with bp in December 2020, we entered into an agreement (“bp JV Agreement”) with bp that created a 50/50 joint venture (the “bpJV”) to develop, own and operate new ADG RNG production facilities in the U.S.
We are committed to the sustainable development, deployment, and utilization of RNG to reduce the country’s dependence on fossil fuels. In addition to its methane emission benefits, the increased production and use of RNG have several other environmental benefits. Anaerobically digested livestock waste produces significantly less odor than conventional storage and land application 9 Table of Contents systems.
We are committed to the sustainable development, deployment, and utilization of RNG to reduce the country’s dependence on fossil fuels. In addition to its methane emission benefits, the increased production and use of RNG have several other environmental benefits. Anaerobically digested livestock waste produces significantly less odor than conventional storage and land application systems.
California Air Resources Board “Current Fuel Pathways” Q2 2021 to Q3 2022 ​ At present, we see the best use of RNG as a replacement for fossil-based fuel in the transportation sector.
California Air Resources Board “Current Fuel Pathways” Q2 2021 to Q3 2023 ​ At present, we see the best use of RNG as a replacement for fossil-based fuel in the transportation sector.
The transitioning of California’s energy markets to increased reliance on 15 Table of Contents renewable and carbon-free sources has the potential to create favorable market conditions for RNG but could also harm our vehicle fueling business. Future regulatory actions will be required to meet the state’s zero-emission and carbon neutrality targets.
The transitioning of California’s energy markets to increased reliance on renewable and carbon-free sources has the potential to create favorable market conditions for RNG but could also harm our vehicle fueling business. Future regulatory actions will be required to meet the state’s zero-emission and carbon neutrality targets.
As these facility owners expand their operations, we provide additional access to our fueling infrastructure and customer relationships. As of December 31, 2022, we obtain RNG from over 100 supply sources.
As these facility owners expand their operations, we provide additional access to our fueling infrastructure and customer relationships. As of December 31, 2023, we obtain RNG from over 100 supply sources.
Methane is one of the most potent climate-harming greenhouse gases (“GHG”) with a comparative impact on global warming that is about 25 times more powerful than that of carbon dioxide.
Methane is one of the most potent climate-harming greenhouse gases (“GHG”) with a comparative impact on global warming that is about 28 times more powerful than that of carbon dioxide.
Increasing vehicle availability RNG is a replacement for fossil-based fuel consumed by vehicles that use internal combustion engines like those used in gasoline- or diesel-powered vehicles. Virtually any car, truck, bus, or other vehicle is capable of being manufactured to run on RNG.
Increasing vehicle availability RNG is a replacement for fossil-based fuel consumed by vehicles that use internal combustion engines like those used in gasoline- or diesel-powered vehicles. Virtually any car, truck, bus, or other vehicle is capable of being manufactured to 7 Table of Contents run on RNG.
We obtain LNG from our own liquefaction plants and from third-party suppliers. For LNG obtained from our own liquefaction plants, we supply the RNG, sourced from RNG suppliers or third-party RNG marketers, or conventional natural gas, sourced from local utilities or third-party conventional natural gas marketers, to our liquefaction plants.
We obtain LNG from our own liquefaction plants and from third-party suppliers. For LNG obtained from our own liquefaction plants, we supply the RNG, sourced from our own RNG production facilities, third-party RNG suppliers or third-party RNG marketers, or conventional natural gas, sourced from local utilities or third-party conventional natural gas marketers, to our liquefaction plants.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Intellectual Property Our intellectual property rights primarily consist of trade secrets, patents, know-how and trademarks, and we rely on a combination of trademark laws, trade secret laws, confidentiality provisions and other contractual provisions to protect these rights and our proprietary information.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 16 Table of Contents Intellectual Property Our intellectual property rights primarily consist of trade secrets, patents, know-how and trademarks, and we rely on a combination of trademark laws, trade secret laws, confidentiality provisions and other contractual provisions to protect these rights and our proprietary information.
Item 1. Business. Overview Clean Energy Fuels Corp., a Delaware corporation, is a leading renewable energy company focused on the procurement and distribution of renewable natural gas (“RNG”) and conventional natural gas, in the form of compressed natural gas (“CNG”) and liquefied natural gas (“LNG”), for the United States and Canadian transportation markets.
Item 1. Business. Overview Clean Energy Fuels Corp., a Delaware corporation, is a leading renewable energy company focused on the procurement and distribution of renewable natural gas (“RNG”) and conventional natural gas, in the form of compressed natural gas (“CNG”) and liquefied natural gas (“LNG”), for the United States (“U.S.”) and Canadian transportation markets.
Biogas processing facilities substantially reduce methane emissions at livestock farms and landfills, which together accounted for approximately 53% of U.S. methane emissions in 2020 according to the EPA. Over the past decade we have seen the transportation sector be the fastest growing end market for RNG, where RNG is used as a replacement for fossil-based fuel.
Biogas processing facilities substantially reduce methane emissions at livestock farms and landfills, which together accounted for approximately 40% of U.S. methane emissions in 2021 according to the EPA. Over the past decade we have seen the transportation sector be the fastest growing end market for RNG, where RNG is used as a replacement for fossil-based fuel.
O&M Services. We perform maintenance service on Clean Energy-owned and customer-owned fueling stations. Our maintenance program is backed by over 200 company employed service technicians and support personnel, an in-house 24/7 remote monitoring center, technician training center, computerized maintenance management system and inventory warehouses throughout the United States and Canada.
O&M Services. We perform maintenance service on Clean Energy-owned and customer-owned fueling stations. Our maintenance program is backed by over 200 company employed service technicians and support personnel, an in-house 24/7 remote monitoring center, technician training center, computerized maintenance management system and inventory warehouses throughout the U.S. and Canada.
In consideration for such guaranty, we agreed to pay to THUSA a 12 Table of Contents quarterly fee at a rate per annum equal to 10% of the average amount owed by us under the term credit agreement during the preceding quarter.
In consideration for such guaranty, we agreed to pay to THUSA a quarterly fee at a rate per annum equal to 10% of the average amount owed by us under the term credit agreement during the preceding quarter.
Employees and our Human Capital As of December 31, 2022, we employed 496 people. We have not experienced any work stoppages, and none of our employees are subject to collective bargaining agreements. The success and growth of our business is significantly correlated with our ability to recruit, train, promote and retain talented individuals at all levels of our organization.
Employees and our Human Capital As of December 31, 2023, we employed 566 people. We have not experienced any work stoppages, and none of our employees are subject to collective bargaining agreements. The success and growth of our business is significantly correlated with our ability to recruit, train, promote and retain talented individuals at all levels of our organization.
TotalEnergies Joint Venture On March 3, 2021, we entered into an agreement (the “TotalEnergies JV Agreement”) with TotalEnergies to create 50/50 joint ventures to develop ADG RNG production facilities in the United States. The TotalEnergies JV Agreement contemplates investing up to $400.0 million of equity in production projects, and TotalEnergies and the Company each committed to initially provide $50.0 million.
TotalEnergies Joint Venture On March 3, 2021, we entered into an agreement (the “TotalEnergies JV Agreement”) with TotalEnergies to create 50/50 joint ventures to develop ADG RNG production facilities in the U.S. The TotalEnergies JV Agreement contemplates investing up to $400.0 million of equity in production projects, and TotalEnergies and the Company each committed to initially provide $50.0 million.
RNG made up 84% of our vehicle fuel sales in 2022, and we expect 100% of our vehicle fuel sales to be RNG by 2025. Although RNG has the same chemical composition as natural gas from fossil sources, it has unique Environmental Credits assigned to it due to its origin from low- and negative-carbon, renewable sources.
RNG made up 89% of our vehicle fuel sales in 2023, and we expect 100% of our vehicle fuel sales to be RNG by 2025. Although RNG has the same chemical composition as natural gas from fossil sources, it has unique Environmental Credits assigned to it due to its origin from low- and negative-carbon, renewable sources.
The fuel we provide enables our customers to transition from diesel to a solution with significantly lower GHG emissions and air quality impacts today . We are committed to pushing ourselves and our partners further by helping to produce and distribute 100% RNG fuels, which can have a negative net carbon emissions profile.
The fuel we provide enables our customers to transition from diesel to a solution with significantly lower GHG emissions and air quality impacts today. We are committed to pushing ourselves and our partners further by helping to produce and distribute 100% RNG, which can have a low carbon profile.
In many areas, increasingly stringent emissions standards have limited the fueling options available to public transit operators. Also, transit agencies typically fuel at a central location and use high volumes of fuel. We estimate that transit agencies in the United States consume approximately one billion gallons of fuel per year.
In many areas, increasingly stringent emissions standards have limited the fueling options available to public transit operators. Also, transit agencies typically fuel at a central location and use high volumes of fuel. We estimate that transit agencies in the U.S. consume approximately one billion gallons of fuel per year.
Additionally, we sell LNG for non-vehicle purposes, including to customers who use LNG in rocket propulsion and oil fields, and for utility, industrial, marine and rail applications. Sales of Environmental Credits. We generate Environmental Credits consisting of RINs and LCFS Credits when we sell RNG for use as a vehicle fuel in the United States.
Additionally, we sell LNG for non-vehicle purposes, including to customers who use LNG in rocket propulsion and oil fields, and for utility, industrial, marine and rail applications. Sales of Environmental Credits. We generate Environmental Credits consisting of RINs and LCFS Credits when we sell RNG for use as a vehicle fuel in the U.S.
Refuse We believe that there are nearly 200,000 refuse trucks in the United States that collect and haul refuse and recyclables, which aggregately consume approximately two billion gallons of fuel per year. We estimate that approximately 60% of new refuse trucks are capable of operating on RNG, up from approximately 3% of new refuse trucks in 2008.
Refuse We believe that there are nearly 200,000 refuse trucks in the U.S. that collect and haul refuse and recyclables, which aggregately consume approximately two billion gallons of fuel per year. We estimate that approximately 60% of new refuse trucks are capable of operating on RNG, up from approximately 3% of new refuse trucks in 2008.
We cannot estimate the expenses we may incur to comply with potential new laws or changes to existing laws, or the other potential effects these laws may have on our business, and these unknown costs and effects are not specifically contemplated by our existing customer agreements or our budgets and cost estimates.
We cannot estimate the expenses we may incur to comply with potential new laws or changes to existing laws, or the other 14 Table of Contents potential effects these laws may have on our business, and these unknown costs and effects are not specifically contemplated by our existing customer agreements or our budgets and cost estimates.
We are subject to federal, state, and local air quality, solid waste, and water quality regulations and permitting requirements. Specific construction and operating permit requirements may differ among states. Specific permits we frequently must obtain include air permits, nonhazardous waste management permits, pollutant discharge elimination 14 Table of Contents permits, and beneficial use permits.
We are subject to federal, state, and local air quality, solid waste, and water quality regulations and permitting requirements. Specific construction and operating permit requirements may differ among states. Specific permits we frequently must obtain include air permits, nonhazardous waste management permits, pollutant discharge elimination permits, and beneficial use permits.
As of December 31, 2022, we served over 1,000 fleet customers operating over 50,000 vehicles on our fuels. We believe we are the only company in the U.S. that provides RNG vehicle fuel at scale in California and nationally. Longer term, we plan to expand availability of hydrogen fuel for vehicle fleets.
As of December 31, 2023, we served over 1,000 fleet customers operating over 50,000 vehicles on our fuels. We believe we are the only company in the U.S. that provides RNG vehicle fuel at scale in California and nationally. 4 Table of Contents Longer term, we plan to expand availability of hydrogen fuel for vehicle fleets.
The need to liquefy and transport 5 Table of Contents LNG generally causes LNG to cost more than CNG. We sell LNG through supply contracts and on a per fill-up basis at prices we set at public access fueling stations based on prevailing market conditions.
The need to liquefy and transport LNG generally causes LNG to cost more than CNG. We sell LNG through supply contracts and on a per fill-up basis at prices we set at public access fueling stations based on prevailing market conditions.
The Pickens Plant can produce 28.0 million gallons of LNG per year and includes a tanker trailer loading system and a 1.0 million gallon storage tank that can hold up to 840,000 usable gallons. In 2022, we produced 94.8% of our LNG at our plants and purchased the remainder of our LNG from third-party suppliers.
The Pickens Plant can produce 28.0 million gallons of LNG per year and includes a tanker trailer loading system and a 1.0 million gallon storage tank that can hold up to 840,000 usable gallons. In 2023, we produced 83% of our LNG at our plants and purchased the remainder of our LNG from third-party suppliers.
Since 2008, we have served as the general contractor or supervised qualified third-party contractors to build over 450 fueling stations. ● Equipment for RNG stations consists of compressors, storage tanks, and dispensers. 11 Table of Contents ● As operators deploy hydrogen-powered vehicles, we can modify our fueling stations and build additional stations to dispense clean hydrogen produced from our RNG.
Since 2008, we have served as the general contractor or supervised qualified third-party contractors to build over 460 fueling stations. ● Equipment for RNG stations consists of compressors, storage tanks, and dispensers. ● As operators deploy hydrogen-powered vehicles, we can modify our fueling stations and build additional stations to dispense clean hydrogen produced from our RNG.
Multiple other states, including New York, Washington, and New Mexico are considering LCFS initiatives like those implemented in California and Oregon. In 2022, we estimate that we generated 41% of all LCFS credits under Bio-CNG and Bio-LNG pathways in the CA LCFS.
Multiple other states, including New York and New Mexico are considering LCFS initiatives like those implemented in California, Oregon and Washington. In 2023, we estimate that we generated 44% of all LCFS credits under Bio-CNG and Bio-LNG pathways in the CA LCFS.
CNG is typically sold by obtaining RNG from RNG suppliers or third-party RNG marketers or conventional natural gas from local utilities or third-party conventional natural gas marketers, compressing and storing it at a fueling station, and dispensing it directly into a vehicle.
CNG is typically sold by obtaining RNG from our own RNG production facilities, third-party RNG suppliers or third-party RNG marketers or conventional natural gas from local utilities or third-party conventional natural gas marketers, compressing and storing it at a fueling station, and dispensing it directly into a vehicle.
In accordance with the TotalEnergies JV Agreement, we will provide TotalEnergies with the right of first opportunity to invest in these ADG RNG projects alongside the Company.
In accordance with the TotalEnergies JV Agreement, we will provide TotalEnergies with the right of first opportunity to invest in these ADG RNG projects 8 Table of Contents alongside the Company.
With the Company’s focus on RNG, our sales of RNG have grown from 12% of our vehicle fuel sales in 2013 to 84% of our vehicle fuel sales in 2022 (excluding GGEs from O&M (as defined below) services sales and non-vehicle sales).
With the Company’s focus on RNG, our sales of RNG have grown from 12% of our vehicle fuel sales in 2013 to 89% of our vehicle fuel sales in 2023 (excluding GGEs from O&M (as defined below) services sales and non-vehicle sales).
The number of Environmental Credits we sell and our revenue from these sales can vary depending on a number of factors, including the market for these credits, which has been volatile and subject to significant price fluctuations in recent periods (for example, in 2022, market prices for RINs were as high as $3.56 and as low as $2.47), any changes to the federal and state programs under which the credits are generated and sold, and our ability to strictly comply with these programs.
The number of Environmental Credits we sell and our revenue from these sales can vary depending on a number of factors, including the market for these credits, which has been volatile and subject to significant price fluctuations in recent periods (for example, in 2023, market prices for RINs were as high as $3.55 and as low as $1.88), any changes to the federal and state programs under which the credits are generated and sold, and our ability to strictly comply with these programs.
Environmental Protection Agency (“EPA”), methane is a significant GHG, which accounted for roughly 11% of all U.S. GHG emissions from human activities in 2020 and which has a comparative impact on global warming that is about 25 times more powerful than that of carbon dioxide over a 100-year period.
Environmental Protection Agency (“EPA”), methane is a significant GHG, which accounted for roughly 12% of all U.S. GHG emissions from human activities in 2021 and which has a comparative impact on global warming that is about 28 times more powerful than that of carbon dioxide over a 100-year period.
We are North America’s leading provider of the cleanest fuel for the commercial transportation market, based on both the number of stations we operate and the amount of GGEs serviced and GGEs sold of RNG and conventional natural gas, in the form of CNG and LNG, which amounted to a total of 428.4 million GGEs in 2022.
We are North America’s leading provider of the cleanest fuel for the commercial transportation market, based on both the number of stations we operate and the amount of GGEs serviced and GGEs sold of RNG and conventional natural gas, in the form of CNG and LNG, which amounted to a total of 466.2 million GGEs in 2023.
According to NGV America, a national organization dedicated to the development of a growing, profitable, and sustainable market for vehicles powered by RNG, in 2021, “RNG use as a transportation fuel increased 234% from 2017 levels, and RNG use as a motor fuel displaced 3.8 million tons of carbon dioxide equivalent.” Further, RNG engines now commercially available for heavy-duty, regional-haul, refuse, transit, and vocational applications have been certified to satisfy CARB’s optional low nitrogen oxide (“NOx”) emission standard of 0.02 g/bhp-hr.
According to NGV America, a national organization dedicated to the development of a growing, profitable, and sustainable market for vehicles powered by RNG, in 2022, “RNG use as a transportation fuel increased 218% from 2018 levels, and RNG use as a motor fuel displaced 5.63 million metric tons of carbon dioxide equivalent.” Further, RNG engines now commercially available for heavy-duty, regional-haul, refuse, transit, and vocational applications have been certified to satisfy CARB’s optional low nitrogen oxide (“NOx”) emission standard of 0.02 g/bhp-hr.
As of December 31, 2022, we fuel approximately 15,000 refuse vehicles for customers including Waste Management, Republic Services, Waste Connections, GFL Environmental, Atlas Disposal, Burrtec, CR&R, Recology and Waste Pro, among others. We also provide vehicle fueling services to municipal refuse fleets. Public Transit We believe that there are over 72,000 municipal transit buses operating in the United States.
As of December 31, 2023, we fuel approximately 16,000 refuse vehicles for customers including Waste Management, Republic Services, Waste Connections, GFL Environmental, Atlas Disposal, Burrtec, CR&R, Recology and Waste Pro, among others. We also provide vehicle fueling services to municipal refuse fleets. Public Transit We believe that there are over 72,000 municipal transit buses operating in the U.S.
These ADG RNG projects are estimated to collectively produce up to 11.2 million GGEs of RNG annually, and 100% of the RNG produced from these projects will be available to us for sale as vehicle fuel pursuant to our existing marketing agreement with bp.
Collectively, the six ADG RNG projects in the bpJV are currently estimated to produce up to 11.1 million GGEs of RNG annually, and 100% of the RNG produced from these projects will be available to us for sale as vehicle fuel pursuant to our existing marketing agreement with bp.
In 2022, we estimate that we generated 48% of all D3 RINs in the U.S. The monetization of RNG also benefits from low-carbon fuel initiatives at the state-level, specifically from established programs in California and Oregon.
In 2023, we estimate that we generated 47% of all D3 RINs in the U.S. The monetization of RNG also benefits from low-carbon fuel initiatives at the state-level, specifically from established programs in California, Oregon and Washington.
We believe we were the first organization to supply RNG for vehicle fuel use in the U.S., and sales of our RNG for such purpose have increased from 13.0 million gasoline gallon equivalents (“GGEs”) in 2013 to 198.2 million GGEs in 2022.
We believe we were the first organization to supply RNG for vehicle fuel use in the U.S., and sales of our RNG for such purpose have increased from 13.0 million gasoline gallon equivalents (“GGEs”) in 2013 to 225.7 million GGEs in 2023.
In addition to revenues generated from sales of RNG and conventional natural gas as a vehicle fuel and Environmental Credits, we also generate revenues by providing O&M services for public and private RNG, natural gas and hydrogen vehicle fleet customer stations; selling and servicing compressors and other equipment used in RNG production and at RNG, natural gas and hydrogen stations; and obtaining federal, state and local tax credits, grants and incentives.
In addition to revenues generated from sales of RNG and conventional natural gas as a vehicle fuel and Environmental Credits, we also generate revenues by providing O&M services for public and private RNG, natural gas and hydrogen vehicle fleet customer stations; selling and servicing compressors and other equipment used in RNG production and at RNG, natural gas and hydrogen stations; and obtaining federal, state and local tax credits, grants and incentives. 11 Table of Contents We are experts in the engineering, design and construction of fueling stations.
Our sources of commercial scale biogas are anaerobic digester gas (“ADG”), which is produced inside an airtight 3 Table of Contents tank used to breakdown organic matter such as dairy and other livestock waste, and landfill gas (“LFG”), which is produced by the decomposition of organic waste at landfills.
Our sources of commercial scale biogas are ADG, which is produced inside an airtight tank used to breakdown organic matter such as dairy and other livestock waste, and landfill gas (“LFG”), which is produced by the decomposition of organic waste at landfills.
The Company’s RNG projects As of December 31, 2022, we had two 100% owned ADG RNG projects under development, which are anticipated to be substantially complete between the second and third quarter of 2024.
The Company’s RNG projects As of December 31, 2023, we had three 100% owned ADG RNG projects under development, which are anticipated to be substantially complete between the second and third quarter of 2025.
The biggest competition for RNG use as a vehicle fuel is gasoline and diesel because most vehicles in our key markets are powered by these fuels.
The biggest competition for RNG use as a vehicle fuel is diesel because most vehicles in our key markets are powered by this fuel.
Common sources of biogas include livestock farms, landfills, and wastewater resource recovery facilities. Livestock- and landfill-sourced biogas represent a significant opportunity to produce RNG and reduce GHG emissions. Although LFG has accounted for most of the growth in biogas projects to date, biogas from dairy and other livestock farm waste represents significant opportunities for RNG production that remain largely untapped.
Livestock- and landfill-sourced biogas represent a significant opportunity to produce RNG and reduce GHG emissions. Although LFG has accounted for most of the growth in biogas projects to date, biogas from dairy and other livestock farm waste represents significant opportunities for RNG production that remain largely untapped.
In 2022, customers contracted 207 trucks under Adopt-A-Port, and we expect 250 additional trucks to be ordered in 2023. Airports We estimate that vehicles serving airports in the United States, including airport delivery fleets, rental car and parking passenger shuttles and taxis, consume an aggregate of approximately two billion gallons of fuel per year.
In 2023, customers contracted 95 trucks under Adopt-A-Port, and we expect 96 additional trucks to be ordered in 2024. Airports We estimate that vehicles serving airports in the U.S., including airport delivery fleets, rental car and parking passenger shuttles and taxis, consume an aggregate of approximately two billion gallons of fuel per year.
By extension, we incorporate our EHS standards into our subcontractor selection qualifications to ensure that our commitment to high EHS standards is shared by our subcontractors. For 2022, our Total Recordable Incident Rate (“TRIR”) was 2.8, which is lower than the 2021 national average of 2.9 TRIR for all industries.
By extension, we incorporate our EHS standards into our subcontractor selection qualifications to ensure that our commitment to high EHS standards is shared by our subcontractors. For 2023, our Total Recordable Incident Rate (“TRIR”) was 1.89, which is lower than the 2022 national average of 3.0 TRIR for all industries.
As of December 31, 2022, we deliver RNG to the transportation market through 569 fueling stations we own, operate or supply in 42 states and the District of Columbia in the U.S., including over 200 stations in California. We also own, operate, or supply 25 fueling stations in Canada as of December 31, 2022.
As of December 31, 2023, we deliver RNG to the transportation market through 579 fueling stations we own, operate or supply in 43 states and the District of Columbia in the U.S., including over 200 stations in California. We also own, operate, or supply 24 fueling stations in Canada as of December 31, 2023.
According to the Global Carbon Project’s Global Carbon Budget published in November 2022 and International Energy Agency’s topic analysis on transport, 37.1 billion metric tons of carbon dioxide were emitted globally in 2021, of which 7.7 billion metric tons, or 21%, came from the transportation sector.
According to the Global Carbon Project’s Global Carbon Budget published in December 2023 and International Energy Agency’s topic analysis on transport, 37.1 billion metric tons of carbon dioxide were emitted globally in 2022, of which 8.0 billion metric tons, or 22%, came from the transportation sector.
Conventional natural gas is typically sourced from local utilities or third-party conventional natural gas marketers. We purchase conventional natural gas under North American Energy Standards Board base contracts on a spot market or short-term forward index basis or forward purchase contracts under take-or-pay arrangements that require us to purchase minimum volumes of conventional natural gas.
We purchase conventional natural gas under North American Energy Standards Board base contracts on a spot market or short-term forward index basis or forward purchase contracts under take-or-pay arrangements that require us to purchase minimum volumes of conventional natural gas.
Regarding RNG production and supply, our primary competition is from other companies or solutions for access to biogas from waste. Evolving consumer preferences, regulatory conditions, ongoing waste industry trends, and project economics have a strong effect on the competitive landscape.
Competition There are many other companies operating in the renewable energy and waste-to-energy space. Regarding RNG production and supply, our primary competition is from other companies or solutions for access to biogas from waste. Evolving customer preferences, regulatory conditions, ongoing waste industry trends, and project economics have a strong effect on the competitive landscape.
We are experts in the engineering, design and construction of fueling stations. When we build stations for customers, we charge construction, other fees, or lease rates based on the size and complexity of the project.
When we build stations for customers, we charge construction, other fees, or lease rates based on the size and complexity of the project.
At Clean Energy we have always had a strong focus on employee and contractor safety and strive to be a zero-incident workplace for our service technicians and staff, as well as our customers using our facilities.
At Clean Energy we have always had a strong focus on employee and contractor safety and strive to be a zero-incident workplace for our service technicians and staff, as well as our customers using our facilities. Looking towards the future, we will continue to focus on employee recruitment, retention, and engagement.
Pursuant to the TotalEnergies JV Agreement, the Company and TotalEnergies have given each party a limited right of first opportunity to invest in ADG RNG projects they respectively originate. Currently, there is one ADG RNG joint venture project under construction pursuant to the TotalEnergies JV Agreement and is expected to be substantially complete in early 2023.
Pursuant to the TotalEnergies JV Agreement, the Company and TotalEnergies have given each party a limited right of first opportunity to invest in ADG RNG projects they respectively originate. Currently, there is one ADG RNG joint venture project (the DR JV) in operation pursuant to the TotalEnergies JV Agreement.
Many transit agencies have been early adopters of vehicles using our fuels, and over 25% of existing transit buses and approximately 35% of new transit buses operate on RNG.
Many transit agencies have been early adopters of vehicles using our 13 Table of Contents fuels, and approximately 30% of existing transit buses and approximately 35% of new transit buses can operate on RNG.
We also believe our RNG can be used to generate clean electricity to power electric vehicles, and we have the capability to add electric vehicle charging at our station sites, although the cost of adding electric vehicle charging capacity may be significant. 4 Table of Contents Our Principal Products, Services and Other Business Activities Our principal products, services and other business activities are described below.
We also believe our RNG can be used to generate clean electricity to power electric vehicles, and we have the capability to add electric vehicle charging at our station sites, although the cost of adding electric vehicle charging capacity may be significant.
There is pressure from politicians, regulators, non-governmental organizations and the investment community directed at corporations to sharpen focus on credible, net-zero aligned transition plans, and key investors have made climate change risk management a key priority.
There is pressure from politicians, regulators, non-governmental organizations and the investment community directed at corporations to sharpen focus on credible, net-zero aligned transition plans, and key investors have made climate change risk management a key priority. We believe we are uniquely positioned to empower our customers to achieve their sustainability and carbon reduction goals.
There is a global demand for reducing GHG emissions, as evidenced by 96% of the world’s countries having committed to the Paris Agreement according to The United Nations Framework Convention in Climate Change, and 96% of S&P 500 companies focusing on sustainability metrics, including GHG emissions, according to the Governance & Accountability Institute’s Flash Report published in 2022.
There is a global demand for reducing GHG emissions, as evidenced by 96% of the world’s countries having committed to the Paris Agreement according to The United Nations Framework Convention in Climate Change, and 98% of S&P 500 companies focusing on sustainability metrics, including GHG emissions, according to the Governance & Accountability Institute’s Flash Report published in 2023. 3 Table of Contents Biogas, the primary source of RNG, is produced by microbes as they break down organic matter in the absence of oxygen.
From inception to December 31, 2022, we and bp have collectively contributed approximately $300 million of equity to the bpJV. Currently, there are six ADG RNG projects under construction in the bpJV, which are planned to be substantially complete between the first quarter of 2023 and the third quarter of 2024.
From inception to December 31, 2023, we and bp have collectively contributed approximately $455.5 million of equity to the bpJV. Currently, there are five ADG RNG projects under construction, which are planned to be substantially complete between the first quarter of 2024 and the first quarter of 2025, and one ADG RNG project, located at Drumgoon Dairy, in operation.
As of December 31, 2022, public transit customers for which we serve include the Los Angeles County Metropolitan Transit Authority, New York MTA, Foothill Transit (Los Angeles County, California), Orange County Transit Authority, Santa Monica Big Blue Bus, Dallas Area Rapid Transit, Phoenix Transit, New Jersey Transit, Jacksonville Transportation Authority, NICE Bus (Nassau County, New York) and Washington Metro Area Transportation Authority. 13 Table of Contents Competition There are many other companies operating in the renewable energy and waste-to-energy space.
As of December 31, 2023, public transit customers for which we serve include the Los Angeles County Metropolitan Transit Authority, New York MTA, Foothill Transit (Los Angeles County, California), Orange County Transit Authority, Santa Monica Big Blue Bus, Dallas Area Rapid Transit, Phoenix Transit, New Jersey Transit, Jacksonville Transportation Authority, NICE Bus (Nassau County, New York) and Washington Metro Area Transportation Authority.
We believe that we have one of the largest and most diverse supply portfolios in the RNG industry, which allows us to provide certainty of RNG supply to our vehicle operator customers. In our view, all the foregoing gives us a competitive advantage relative to existing and new market entrants.
We believe that we have one of the largest and most diverse supply portfolios in the RNG industry, which allows us to provide certainty of RNG supply to our vehicle operator customers.
On September 23, 2020, the California Governor issued an Executive Order N-79-20 setting goals for expanding the sale and use of zero-emission vehicles within California, including 100% of in-state sales of new passenger cars and trucks to be zero-emission by 2035, and 100% of medium- and heavy-duty truck vehicles in California to be zero-emission by 2045 for all operations where feasible.
In addition, the Clean Water Act and implementing state laws and regulations require individual permits or coverage under general permits for discharges of storm water runoff from certain types of facilities. 15 Table of Contents On September 23, 2020, the California Governor issued an Executive Order N-79-20 setting goals for expanding the sale and use of zero-emission vehicles within California, including 100% of in-state sales of new passenger cars and trucks to be zero-emission by 2035, and 100% of medium- and heavy-duty truck vehicles in California to be zero-emission by 2045 for all operations where feasible.
We purchase RNG from bp and other third-party producers, comprising over 100 supply sources, typically under long-term RNG supply offtake agreements. In exchange for the agreement to offtake RNG supply, we and the supplier negotiate to determine what percentage share of the value of the Environmental Credit each party will retain.
In exchange for the agreement to offtake RNG supply, we and the supplier negotiate to determine what percentage share of the value of the Environmental Credit each party will retain.
We believe that during 2022 we provided 54% and 48% of the RNG used for transportation fuel in California and the United States, respectively.
We believe that during 2023 we provided 53% and 47% of the RNG used for transportation fuel in California and the U.S., respectively.
Information about the revenue we receive from these activities is discussed in this report in Item 7.
Our Principal Products, Services and Other Business Activities Our principal products, services and other business activities are described below. Information about the revenue we receive from these activities is discussed in this report in Item 7.
Many types and models of heavy- and medium-duty RNG vehicles and engines are available in the U.S., including, among others, long-haul tractors, refuse trucks, regional tractors, transit buses, ready-mix trucks, delivery trucks, vocational work trucks, school buses, shuttles, pickup trucks and cargo and passenger vans. 7 Table of Contents More broadly, many companies are developing and commercializing hydrogen and electric commercial vehicles, particularly as the commercial transportation sector increasingly shifts toward low-emission, zero-emission, or carbon neutral vehicle solutions.
Many types and models of heavy- and medium-duty RNG vehicles and engines are available in the U.S., including, among others, long-haul tractors, refuse trucks, regional tractors, transit buses, ready-mix trucks, delivery trucks, vocational work trucks, school buses, shuttles, pickup trucks and cargo and passenger vans.
These Environmental Credits are provided under a variety of programs, including the national Renewable Fuel Standards (“RFS”), and state-level Low Carbon Fuel Standard (“LCFS”) programs. The RFS program requires transportation fuel to contain a minimum volume of renewable fuel.
Use of environmental credits to promote RNG growth When used as a transportation fuel, RNG generates additional revenue streams through Environmental Credits. These Environmental Credits are provided under a variety of programs, including the national Renewable Fuel Standards (“RFS”), and state-level Low Carbon Fuel Standard (“LCFS”) programs.
Looking towards the future, we will continue to focus on employee recruitment, retention, and engagement, with a specific emphasis on diversity, equity, and inclusion in all areas of our company. It is important that we build and maintain a diverse and inclusive workforce, leadership team and supplier base that are reflective of the communities in which we operate.
We are committed to increasing diversity, equity, and inclusion in all areas of our company. It is important that we build and maintain a diverse and inclusive workforce and leadership team that is reflective of the communities in which we operate. We also strive to promote diversity on our Board of Directors.
Our supply offtake agreements are variable and are based on actual RNG produced by the third-party producers, up to various maximum volume levels as governed by the arrangement with no minimum purchase volume required. In 2022, our third-party sourced RNG consisted of 18.0% ADG and 82.0% landfill gas (“LFG”).
Our supply offtake agreements are variable and are based on actual RNG produced by the third-party producers, up to various maximum volume levels as governed by the arrangement. In 2023, our third-party sourced RNG consisted of 22% ADG and 78% LFG. Conventional natural gas is typically sourced from local utilities or third-party conventional natural gas marketers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may be subject to various risks and uncertainties because of the COVID-19 pandemic or other pandemics, epidemics, or infectious disease outbreaks, including a delay in the adoption of our RNG and natural gas vehicle fuels by heavy-duty trucks and/or a delay in increasing the use of our vehicle fuels; a decrease in the volume of truck and fleet operations, including shuttle buses at airports, and lower-than-normal levels of public transportation generally, which have resulted and may in the future result in decreased demand for our vehicle fuels; and the effect of business disruptions on the production of vehicles and engines that use our fuels, which has resulted in, and may in the future result in, plant closures, decreased manufacturing capacity, and delays in deliveries.
Biggest changeAny future pandemic, epidemic, or infectious disease outbreak could also adversely affected our business through delaying the adoption of our RNG and natural gas vehicle fuels by heavy-duty trucks and/or a delaying increased usage of our vehicle fuels; decreasing the volume of truck and fleet operations, including shuttle buses at airports, and public transportation generally, and disrupting production of vehicles and engines that use our fuels.
We are dependent on the production of vehicles and engines in our key customer and geographic markets by vehicle and engine manufacturers, over which we have no control. Vehicle and engine manufacturers control the development, production, quality assurance, cost and sales and marketing of their products, which shapes the performance, availability and reputation of these products in the marketplace.
We are dependent on the production of vehicles and engines in our key customer and geographic markets by manufacturers, over which we have no control. Vehicle and engine manufacturers control the development, production, quality assurance, cost and sales and marketing of their products, which shapes the performance, availability and reputation of these products in the marketplace.
In addition, our technology infrastructure and information systems are vulnerable to damage or interruption from natural disasters, power loss and telecommunications failures.
In addition, our information technology infrastructure and information systems are vulnerable to damage or interruption from natural disasters, power loss and telecommunications failures.
NG Advantage faces unique risks, including among others: (i) it has a history of net losses and has incurred substantial indebtedness; (ii) NG Advantage will need to raise additional capital, which may not be available, may only be available on onerous terms, or may only be available from the Company; (iii) the labor market for truck drivers is very competitive, which increases NG Advantage’s difficulty in meeting its delivery obligations; (iv) NG Advantage often transports CNG in trailers over long distances and these trailers may be involved in accidents; and (v) NG Advantage’s CNG trailers may become subject to new or changed regulations that could adversely affect its business.
NG Advantage faces unique risks, including among others: (i) it has a history of net losses and has incurred substantial indebtedness; (ii) NG Advantage may need to raise additional capital, which may not be available, may only be available on onerous terms, or may only be available from the Company; (iii) the labor market for truck drivers is very competitive, which increases NG Advantage’s difficulty in meeting its delivery obligations; (iv) NG Advantage often transports CNG in trailers over long distances and these trailers may be involved in accidents; and (v) NG Advantage’s CNG trailers may become subject to new or changed regulations that could adversely affect its business.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies; dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance consumer acceptance of their products; or exert more influence on the regulatory landscape that affects the vehicle fuels market.
As a result, these competitors may be able to respond more quickly to changes in customer preferences, legal requirements or other industry or regulatory trends; devote greater resources to the development, promotion and sale of their products; adopt more aggressive pricing policies; dedicate more effort to infrastructure and systems development in support of their business or product development activities; implement more robust or creative initiatives to advance customer acceptance of their products; or exert more influence on the regulatory landscape that affects the vehicle fuels market.
If the prices of crude oil, gasoline and diesel are low or decline, or if the price of RNG or natural gas increases without corresponding increases in the prices of crude oil, gasoline and diesel or Environmental Credits, we may not be able to offer our customers an attractive price for our vehicle fuels, market adoption of our vehicle fuels could be slowed or limited and/or we may be forced to reduce the prices at which we sell our vehicle fuels in order to try to attract new customers or prevent the loss of demand from existing customers.
If the prices of crude oil and diesel are low or decline, or if the price of RNG or natural gas increases without corresponding increases in the prices of crude oil and diesel or Environmental Credits, we may not be able to offer our customers an attractive price for our vehicle fuels, market adoption of our vehicle fuels could be slowed or limited and/or we may be forced to reduce the prices at which we sell our vehicle fuels in order to try to attract new customers or prevent the loss of demand from existing customers.
These actions could result in state funding and incentive programs being directed only to the adoption of electric vehicles. In December 2021, President Biden signed an executive order (the “2021 Executive Order”) that directs the federal government to achieve certain goals, including purchasing 100% zero-emission vehicles by 2035 for its fleet of over 600,000 cars and trucks.
These actions could result in state funding and incentive programs being directed only to the adoption of zero emission vehicles. In December 2021, President Biden signed an executive order (the “2021 Executive Order”) that directs the federal government to achieve certain goals, including purchasing 100% zero-emission vehicles by 2035 for its fleet of over 600,000 cars and trucks.
Factors that may cause volatility in the price of our common stock, many of which are beyond our control, include, among others, the following: (i) the factors that may influence the adoption of our vehicle fuels, as discussed elsewhere in these risk factors; (ii) our ability to implement our business plans and initiatives and their anticipated, perceived or actual level of success; (iii) failure to meet or exceed any financial guidance we have provided to the public or the estimates and projections of the investment community; (iv) the market’s perception of the success and importance of any of our acquisitions, divestitures, investments or other strategic relationships or transactions; (v) the amount of and timing of sales of, and prices for, Environmental Credits; (vi) actions taken by state or federal governments to mandate or otherwise promote or incentivize alternative vehicles or vehicle fuels over, or to the exclusion of, RNG; (vii) technical factors in the public trading market for our common stock that may produce price movements that may or may not comport with macro, 30 Table of Contents industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our common stock, access to margin debt, and trading in options and other derivatives on our common stock; (viii) changes in political, regulatory, health, economic and market conditions; and (ix) a change in the trading volume of our common stock.
Factors that may cause volatility in the price of our common stock, many of which are beyond our control, include, among others, the following: (i) the factors that may influence the adoption of our vehicle fuels, as discussed elsewhere in these risk factors; (ii) our ability to implement our business plans and initiatives and their anticipated, perceived or actual level of success; (iii) failure to meet or exceed any financial guidance we have provided to the public or the estimates and projections of the investment community; (iv) the market’s perception of the success and importance of any of our acquisitions, divestitures, investments or other strategic relationships or transactions; (v) the amount and timing of sales of, and prices for, Environmental Credits; (vi) actions taken by state or federal governments to mandate or otherwise promote or incentivize alternative vehicles or vehicle fuels over, or to the exclusion of, RNG; (vii) technical factors in the public trading market for our common stock that may produce price movements that may or may not comport with macro, industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed on financial trading and other social media sites), the amount and status of short interest in our common stock, access to margin debt, and trading in options and other derivatives on our common stock; (viii) changes in political, regulatory, health, economic and market conditions; and (ix) a change in the trading volume of our common stock.
If we cannot fund any of these activities with capital on-hand or cash provided by our operations, we may seek to obtain additional capital from other sources, such as by selling assets or pursuing debt or equity financing. Asset sales and equity or debt financing may not be available when needed, on terms favorable to us or at all.
If we cannot fund any of these activities with capital on-hand or cash provided by our operations, we may seek additional capital from other sources, such as by selling assets or pursuing debt or equity financing. Asset sales and equity or debt financing may not be available when needed, on terms favorable to us or at all.
The biggest competition for our products is gasoline and diesel because most vehicles in our key markets are powered by these fuels. We also compete with suppliers of other alternative vehicle fuels, including renewable diesel, biodiesel, and ethanol, as well as producers and fuelers of alternative vehicles, including hybrid, electric and hydrogen-powered vehicles.
The biggest competition for our products is diesel because most vehicles in our key markets are powered by these fuels. We also compete with suppliers of other alternative vehicle fuels, including renewable diesel, biodiesel, and ethanol, as well as producers and fuelers of alternative vehicles, including hybrid, electric and hydrogen-powered vehicles.
If new debt were to be incurred in the future, the related risks that we now face could intensify. The Credit Agreement requires us and our subsidiaries, on a consolidated basis, to comply with a maximum total leverage ratio, a minimum interest coverage ratio, and a minimum liquidity test.
If new debt were to be incurred in the future, the related risks that we now face could intensify. The Credit Agreement requires us and our subsidiaries, on a consolidated basis, to comply with a maximum total net leverage ratio, a minimum interest coverage ratio, and a minimum liquidity test.
These manufacturers may decide not to expand or maintain, or may decide to discontinue or curtail, their engine or vehicle product lines for a variety of reasons, including as a result of the adoption of government policies or programs such as the Advanced Clean Trucks regulation and the September 2020 Executive Order.
These manufacturers may decide not to expand or maintain, or may decide to discontinue or curtail, their engine or vehicle product lines for a variety of reasons, including as a result of the adoption of government policies or programs such as the Advanced Clean Trucks regulation, the September 2020 Executive Order and the Advanced Clean Fleets regulation.
If the alternative vehicle fuel market grows, the number and type of participants in this market and their level of capital and other commitments to alternative vehicle fuel programs could increase. Many of our competitors have substantially greater experience, customer bases, brand awareness and financial, marketing and other resources than we have.
If the alternative vehicle fuel market grows, the number and type of participants in this market and their level of capital and other commitments to alternative vehicle fuel programs could increase. Many of our competitors have substantially greater customer bases, brand awareness and financial, marketing and other resources than we have.
Operators may, however, perceive an inability to timely recover these additional initial costs if our vehicle fuels are not available at prices sufficiently lower than gasoline and diesel. Such an outcome could decrease our potential customer base and harm our business prospects.
Operators may, however, perceive an inability to timely recover these additional initial costs if our vehicle fuels are not available at prices sufficiently lower than diesel. Such an outcome could decrease our potential customer base and harm our business prospects.
We face increasing competition from competitors, many of which have far greater resources, experience, customer bases and brand awareness than we have, and we may not be able to compete effectively with these businesses. The market for vehicle fuels is highly competitive.
We face increasing competition from competitors, many of which have far greater resources, customer bases and brand awareness than we have, and we may not be able to compete effectively with these businesses. The market for vehicle fuels is highly competitive.
Factors that may influence the adoption of our vehicle fuels, many of which are beyond our control, include, among others: ● Lack of demand for trucks that use our vehicle fuels; ● Adoption or expansion of government policies, programs, funding or incentives, or increased publicity or popular sentiment in favor of vehicles or fuels other than RNG and natural gas, including long-standing support for gasoline and diesel-powered vehicles, changes to emissions requirements applicable to vehicles powered by gasoline, diesel, RNG, natural gas, or other vehicle fuels and/or growing support for electric and hydrogen-powered vehicles; ● Limitations on the capabilities of utilities to provide services to meet our requirements.
Factors that may influence the adoption of our vehicle fuels, many of which are beyond our control, include, among others: lack of demand for trucks that use our vehicle fuels; adoption or expansion of government policies, programs, funding or incentives, or increased publicity or popular sentiment in favor of vehicles or fuels other than RNG and natural gas, including long-standing support for diesel-powered vehicles, changes to emissions requirements applicable to vehicles and fleets powered by diesel, RNG, natural gas, or other vehicle fuels and/or growing support for electric and hydrogen-powered vehicles; limitations on the capabilities of utilities to provide services to meet our requirements.
Among other things, we believe the intent of the Advanced Clean Trucks regulation and the September 2020 Executive Order is to limit and ultimately discontinue the production and use of internal combustion engines because such engines have “tailpipe” emissions.
Among other things, we believe the intent of the Advanced Clean Trucks regulation, the September 2020 Executive Order, and the Advanced Clean Fleets regulation is to limit and ultimately discontinue the production and use of internal combustion engines because such engines have “tailpipe” emissions.
Our common stock held by TMS and our common stock underlying the Amazon Warrant may be sold in the public market under Rule 144 or in registered sales or offerings pursuant to registration rights held by each stockholder.
Our common stock held by TMS, our common stock underlying the Amazon Warrant, and our common stock underlying the Stonepeak Warrant may be sold in the public market under Rule 144 or in registered sales or offerings pursuant to registration rights held by each stockholder.
In addition, other factors related to the development and operation of renewable energy projects could adversely affect our business, including: (i) changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to vehicles or increase the costs of processing RNG to allow for such deliveries; (ii) construction risks, including the risk of delay, that may arise because of inclement weather, labor disruptions, disputes, or increases in costs for equipment and construction materials; (iii) operating risks; (iv) weather conditions; (v) financial condition of the applicable source owner; (vi) health of the applicable dairy herd; (vii) consolidation in the dairy industry; (viii) budget overruns; (ix) possible liabilities because of unforeseen environmental, construction, technological or other complications; (x) failures or delays in obtaining desired or necessary rights, including leases and feedstock agreements; and (xi) failures or delays in obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and U.S. federal governments as well as local and U.S. federal governmental organizations.
In addition, other factors related to the development and operation of renewable energy projects could adversely affect our business, including: (i) changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to vehicles or increase the costs of processing RNG to allow for such deliveries; (ii) construction risks, including the risk of delay, that may arise because of inclement weather, natural disasters, accidents, labor disruptions, disputes, or increases in costs for or shortages of equipment and construction materials; (iii) operating risks; (iv) weather conditions; (v) financial condition of the applicable source owner; (vi) health of the applicable dairy herd; (vii) consolidation in the dairy industry; (viii) budget overruns; (ix) possible liabilities because of unforeseen environmental, construction, technological or other complications; (x) failures or delays in obtaining desired or necessary rights, including leases and feedstock agreements; and (xi) failures or delays in obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and U.S. federal governments as well as local and U.S. federal governmental organizations.
Pricing conditions may also exacerbate the cost differential between vehicles that use our fuels and gasoline or diesel-powered vehicles, which may lead operators to delay or refrain from purchasing or converting to our vehicle fuels.
Pricing conditions may also exacerbate the cost differential between vehicles that use our fuels and diesel-powered vehicles, which may lead operators to delay or refrain from purchasing or converting to our vehicle fuels.
Risks Related to Our Common Stock A significant portion of our outstanding common stock is owned or otherwise subject to acquisition by two equityholders, each of which may have interests that differ from the Company’s other stockholders and which now or in the future may be able to influence the Company’s corporate decisions, including a change of control.
Risks Related to Our Common Stock A significant portion of our outstanding common stock is owned or otherwise subject to acquisition by three equityholders, each of which may have interests that differ from the Company’s other stockholders and which now or in the future may be able to influence the Company’s corporate decisions, including a change of control.
There have also been several highly publicized cases in which hackers have requested “ransom” payments in exchange for not disclosing customer or other confidential information or for not disabling the target company’s computer or other systems. Implementing security measures designed to prevent, detect, mitigate or correct these or other IT security threats involves significant costs.
There have also been several highly publicized cases in which hackers have requested “ransom” payments in exchange for not disclosing customer or other confidential information or for not disabling the target company’s computer or other systems. Implementing security measures designed to prevent, detect, mitigate or correct these or other cybersecurity threats involves significant costs.
Although we have taken steps to protect the security of our information systems and the data maintained in those systems, we have, from time to time, experienced cyberattacks or other cyber incidents that have threatened our data and systems, including malware and computer virus attacks and it is possible that future cyber incidents we may experience may materially and adversely affect our business.
Although we have taken steps to protect the security of our information systems and the data maintained in those systems, we have, from time to time, experienced cyberattacks or other cybersecurity incidents that have threatened our data and information systems, including malware and computer virus attacks and it is possible that future cybersecurity incidents we may experience may materially and adversely affect our business.
Further, a cyber incident could occur and persist for an extended period of time without detection, and an investigation of any successful cyber incident would likely require significant time, costs and other resources to complete. We may be required to expend significant financial resources to protect against or to remediate such cyber incidents.
Further, a cybersecurity incident could occur and persist for an extended period of time without detection, and an investigation of any successful cybersecurity incident would likely require significant time, costs and other resources to complete. We may be required to expend significant financial resources to protect against or to remediate such cybersecurity incidents.
Risks Related to Our Business Our success is dependent on the willingness of fleets and other consumers to adopt our vehicle fuels, which may not occur in a timely manner, at expected levels or at all. Our success is highly dependent on the adoption by fleets and other consumers of our RNG and conventional natural gas vehicle fuels.
Risks Related to Our Business Our success is dependent on the willingness of fleets and other customers to adopt our vehicle fuels, which may not occur in a timely manner, at expected levels or at all. Our success is highly dependent on the adoption by fleets and other customers of our RNG and conventional natural gas vehicle fuels.
There have been several recent, highly publicized cases in which organizations of various types and sizes have reported the unauthorized disclosure of customer or other confidential information, as well as cyber incidents involving the dissemination, theft and destruction of corporate information, intellectual property, cash or other valuable assets.
There have been several recent, highly publicized cases in which organizations of various types and sizes have reported the unauthorized disclosure of customer or other confidential information, as well as cybersecurity incidents involving the dissemination, theft and destruction of corporate information, intellectual property, cash or other valuable assets.
Implementation of such regulations and executive actions may slow, delay or prevent the adoption by fleets and other commercial consumers of our vehicle fuels, particularly in California. Moreover, other states have taken steps to enact similar regulations, which may slow, delay, change, or prevent the adoption of our vehicle fuels in those states as well.
Implementation of such regulations and executive actions may slow, delay or prevent the adoption by fleets and other commercial customers of our vehicle fuels, particularly in California. Moreover, other states have taken steps to enact similar regulations, which may slow, delay, change, or prevent the adoption of our vehicle fuels in those states as well.
If NG Advantage is not able to obtain financing from external sources, we may need to provide additional debt or equity capital to allow NG Advantage to satisfy its commitments and maintain operations. Our station construction activities subject us to business and operational risks.
If NG Advantage needs to raise additional capital and is not able to obtain financing from external sources, we may need to provide additional debt or equity capital to allow NG Advantage to satisfy its commitments and maintain operations. Our station construction activities subject us to business and operational risks.
These strategic transactions and relationships and any others we may pursue in the future involve numerous risks, any of which could harm our business, performance and liquidity, including, among others, the following: (i) difficulties integrating the operations, personnel, contracts, service providers and technologies of an acquired company or partner; (ii) diversion of financial and management resources from existing operations or alternative acquisition, investment, strategic or other opportunities; (iii) failure to realize the anticipated synergies or other benefits of a transaction or relationship; (iv) risks of entering new customer or geographic markets in which we may have limited or no experience; (v) potential loss of an acquired company’s or partner’s key employees, customers or vendors in the event of an acquisition or investment, or potential loss of our assets (and their associated revenue streams), employees or customers in the event of a divestiture or other strategic transaction; and (vi) incurrence of substantial costs or debt or equity dilution to fund an acquisition, investment or other transaction or relationship, as well as possible write-offs or impairment charges relating to any businesses we partner with, invest in or acquire.
These strategic transactions and relationships and any others we may pursue in the future involve numerous risks, any of which could harm our business, performance and liquidity, including, among others, the following: (i) difficulties integrating the operations, personnel, contracts, service providers and technologies of an acquired company or partner; (ii) diversion of financial and management resources from existing operations or other opportunities; (iii) failure to realize the anticipated synergies or other benefits of a transaction or relationship; (iv) risks of entering new customer or geographic markets in which we may have limited or no experience; (v) potential loss of our or an acquired company’s or partner’s key employees, customers, vendors or assets in the event of an acquisition or investment; and (vi) incurrence of substantial costs or debt or equity dilution to fund an acquisition, investment or other transaction or relationship, as well as possible write-offs or impairment charges relating to any businesses we partner with, invest in or acquire.
Generally, vehicles that use our fuels cost more initially than gasoline or diesel-powered vehicles because the components needed for a vehicle to use our fuels add to the vehicle’s base cost. Operators then seek to recover the additional base cost over time through a lower cost to use our fuels.
Generally, vehicles that use our fuels cost more initially than diesel-powered vehicles because the components needed for a vehicle to use our fuels add to the vehicle’s base cost. Operators then seek to recover the additional base cost over time through a lower cost to use our fuels.
Furthermore, additional federal or state taxes could be implemented on “tailpipe” emissions, which would have a negative impact on the cost of our vehicle fuels, as compared to vehicle fuels that do not generate tailpipe emissions.
Furthermore, additional federal or state taxes could be implemented on “tailpipe” emissions or on methane emissions generally, which would have a negative impact on the cost of our vehicle fuels, as compared to vehicle fuels that do not generate tailpipe emissions.
In addition, higher levels of indebtedness could increase our risk of non-repayment, adversely affect our creditworthiness, and amplify the other risks associated with our existing debt, which are discussed elsewhere in these risk factors. Further, we may incur substantial costs in pursuing any capital-raising transactions, including investment banking, legal and accounting fees.
In addition, higher levels of indebtedness could increase our risk of non-repayment, adversely affect our creditworthiness, and amplify the other risks associated with our existing debt, which are discussed elsewhere in these risk factors. Further, we may incur substantial costs in pursuing any capital-raising transactions, including investment 25 Table of Contents banking, legal and accounting fees.
We cannot provide assurance that our safety and security measures will prevent our information systems from improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cyber incidents.
We cannot provide assurance that our safety and security measures will prevent our information systems from improper functioning or damage, or the improper access or disclosure of personally identifiable information such as in the event of cybersecurity incidents.
In addition, some operators have communicated to us that the first-generation models of heavy-duty truck engines using our fuels have a reputation for unsatisfactory performance, and that this reputation or their first-hand experiences of such performance may be a factor in operator decisions regarding whether to convert their fleets to vehicles that use our fuels.
In addition, some operators have communicated to us that earlier models of heavy-duty truck engines using our fuels have a reputation for unsatisfactory performance, and that this reputation or their first-hand experiences of such performance may be a factor in operator decisions regarding whether to convert their fleets to vehicles that use our fuels.
TotalEnergies or other large stockholders may be able to influence or control matters requiring approval by our stockholders, including the election of directors, mergers and acquisitions, or other extraordinary transactions.
TotalEnergies or other current or future large stockholders may be able to influence or control matters requiring approval by our stockholders, including the election of directors, mergers and acquisitions, or other extraordinary transactions.
Federal or state laws, orders or regulations have been adopted, such as California’s AB 32 cap and trade law and the 2021 Executive Order, and may in the future be adopted that impose limits on GHG emissions or otherwise require the adoption of zero-emission electric vehicles.
Federal or state laws, orders or regulations have been adopted, such as California’s AB 32 cap and trade law, and may in the future be adopted that impose limits on GHG emissions or otherwise require the adoption of zero-emission electric vehicles.
Our outstanding and any future indebtedness could make us more vulnerable to adverse changes in general U.S. and worldwide economic, regulatory, and competitive conditions, limit our flexibility to plan for or react to changes in our business or industry, place us at a disadvantage compared to our competitors that have less debt, or limit our ability to borrow or otherwise raise additional capital as needed.
Our outstanding and any future indebtedness could make us more vulnerable to adverse changes in general U.S. and worldwide economic, including rising interest rates, regulatory, and competitive conditions, limit our flexibility to plan for or react to changes in our business or industry, place us at a disadvantage compared to our competitors that have less debt, or limit our ability to borrow or otherwise raise additional capital as needed.
Our business is influenced by federal, state, and local tax credits, rebates, grants and other government programs and incentives that promote the use of our vehicle fuels.
Our business is influenced by federal, state, and local tax credits, rebates, grants and other government programs and incentives that promote or exclude the use of our vehicle fuels.
Natural gas and crude oil prices are expected to remain volatile for the near future because of market uncertainties over supply and demand, including due to the state of the world economy, geopolitical conditions, military conflicts such as the war in Ukraine, energy infrastructure and other factors.
Natural gas and crude oil prices are expected to remain volatile for the near future because of market uncertainties over supply and demand, including due to the state of the world economy, geopolitical conditions, military conflicts such as the wars in Ukraine and the Middle East, energy infrastructure and other factors.
NG Advantage provides “virtual pipelines” to transport CNG by truck from compression facilities to pipeline interconnects and to industrial and commercial customer users that do not have direct access to natural gas pipelines.
NG Advantage may not be successful. NG Advantage provides “virtual pipelines” to transport CNG by truck from compression facilities to pipeline interconnects and to industrial and commercial customer users that do not have direct access to natural gas pipelines.
Any debt financing we may pursue could require us to make significant interest or other payments and to pledge some or all of 25 Table of Contents our assets as security.
Any debt financing we may pursue could require us to make significant interest or other payments and to pledge some or all of our assets as security.
The success of our RNG business depends on our ability to secure, on acceptable terms, a sufficient supply of RNG; sell this RNG in adequate volumes and at prices that are attractive to customers and produce acceptable margins for us; and sell Environmental Credits we may generate under applicable federal or state programs from our sale of RNG as a vehicle fuel at favorable prices.
The success of our RNG business depends on our ability to secure, on acceptable terms, a sufficient supply of RNG; sell this RNG in adequate volumes and at prices that are attractive to customers and produce acceptable margins for us; and sell Environmental Credits we may generate under applicable federal or state programs from our sale of RNG as a vehicle fuel at favorable prices as well as our ability to appropriately balance supply we take with demand from customers.
Subject to vesting of the Amazon Warrant, the Amazon Warrant will be exercisable for up to 19.999% of our outstanding common stock on a fully diluted basis (determined at the time of issuance of the Amazon Warrant), subject to certain anti-dilution provisions, and Amazon Holding’s beneficial ownership will initially be contractually limited to the beneficial ownership limitation unless Amazon Holdings gives the Company sixty one (61) days’ notice that it is waiving such limitation.
Subject to additional vesting through fuel purchase from the Company pursuant to the Fuel Agreement, the Amazon Warrant will be exercisable for up to 19.999% of our outstanding common stock on a fully diluted basis (determined at the time of issuance), subject to certain anti-dilution provisions, and Amazon Holding’s beneficial ownership will initially be contractually limited to the beneficial ownership limitation unless Amazon Holdings gives the Company sixty one (61) days’ notice that it is waiving such limitation.
Our partners may choose to invest in renewable or low carbon vehicle fuels other than RNG . Our partners, including TotalEnergies, bp and Chevron, may reallocate their resources from RNG to other renewable or low carbon vehicle fuels. Any such action would have a material adverse effect on our plans, results of operations and financial condition.
Further, our partners, including TotalEnergies, bp and Chevron, may reallocate their resources from RNG to other renewable or low carbon vehicle fuels. Any such action would have a material adverse effect on our plans, results of operations and financial condition.
We believe the risks and uncertainties described below are the most significant we face, but additional risks 16 Table of Contents and uncertainties not known to us or that we currently deem immaterial could also be or become significant.
We believe the risks and uncertainties described below are the most significant we face, but additional risks and uncertainties not known to us or that we currently deem immaterial could also be or become significant.
For example, natural gas utilities may be unable to expand piping or provide services for new expansions, and electric utilities may lack the capacity to provide service for our projects; ● Perceptions about the benefits of our vehicle fuels relative to gasoline, diesel and other alternative vehicle fuels, including with respect to factors such as supply, cost savings, environmental benefits and safety; ● Increases, decreases or volatility in the supply, demand, use and prices of crude oil, gasoline, diesel, RNG, natural gas and other vehicle fuels, such as electricity, hydrogen, renewable diesel, biodiesel and ethanol; ● Inertia among fleets and fleet vehicle operators, who may be unable or unwilling to prioritize converting a fleet to our vehicle fuels over an operator’s other general business concerns, particularly if the operator is not sufficiently incentivized by emissions regulations or other requirements or lacks demand for the conversion from its customers, drivers, or other stakeholders; ● Vehicle cost, fuel efficiency, availability, quality, safety, convenience (to fuel and service), design, performance and residual value, as well as operator perception with respect to these factors, generally and in our key customer markets and relative to comparable vehicles powered by other fuels; ● The development, production, cost, availability, performance, sales and marketing and reputation of engines that are well-suited for the vehicles used in our key customer markets, including heavy-duty trucks and other fleets; 17 Table of Contents ● Increasing competition in the market for vehicle fuels generally, and the nature and effect of competitive developments in this market, including improvements in or perceived advantages of other vehicle fuels and engines powered by these fuels; ● The availability and effect of environmental, tax or other government regulations, programs or incentives that promote our products or other alternatives as a vehicle fuel, including certain programs under which we generate credits by selling RNG as a vehicle fuel, as well as the market prices for such credits; and ● Emissions and other environmental regulations and pressures on producing, transporting, and dispensing our fuels.
For example, natural gas utilities may be unable to expand piping or provide services for new expansions, and electric utilities may lack the capacity to provide service for our projects; perceptions about the benefits of our vehicle fuels relative to diesel and other alternative vehicle fuels, including with respect to factors such as supply, cost savings, environmental benefits and 17 Table of Contents safety; increases, decreases or volatility in the supply, demand, use and prices of crude oil, diesel, RNG, natural gas and other vehicle fuels, such as electricity, hydrogen, renewable diesel, biodiesel and ethanol; inertia among fleets and fleet vehicle operators, who may be unable or unwilling to prioritize converting a fleet to our vehicle fuels over an operator’s other general business concerns, particularly if the operator is not sufficiently incentivized by emissions regulations or other requirements or lacks demand for the conversion from its customers, drivers, or other stakeholders; vehicle cost, fuel efficiency, availability, quality, safety, convenience (to fuel and service), design, performance and residual value, as well as operator perception with respect to these factors, generally and in our key customer markets and relative to comparable vehicles powered by other fuels; the development, production, cost, availability, performance, sales and marketing and reputation of engines that are well-suited for the vehicles used in our key customer markets, including heavy-duty trucks and other fleets; increasing competition in the market for vehicle fuels generally, and the nature and effect of competitive developments in this market, including improvements in or perceived advantages of other vehicle fuels and engines powered by these fuels; the impact of federal or state laws, orders or regulations mandating new or additional limits on GHG emissions, “tailpipe” emissions or internal combustion engines, including the Advanced Clean Trucks regulation, the September 2020 Executive Order, the Advanced Clean Fleets regulation and the 2021 Executive Order (each as defined below); the availability and effect of environmental, tax or other government regulations, programs or incentives that promote our products or other alternatives as a vehicle fuel, including certain programs under which we generate credits by selling RNG as a vehicle fuel, as well as the market prices for such credits; and emissions and other environmental regulations and pressures on producing, transporting, and dispensing our fuels.
Many of these parties have substantially greater resources and influence than we have. Further, changes in federal, state or local political, social or economic conditions, including a lack of legislative focus on these programs and regulations, could result in their modification, delayed adoption or repeal.
Many of these parties have substantially greater resources and influence than we have. Further, changes in federal, state or local political, social or economic conditions, including as a result of a lack of legislative focus on these programs and regulations or prolonged U.S. government shutdown, could result in their modification, delayed adoption or repeal.
Our RNG business may not be successful. Our RNG business consists of procuring RNG from projects we plan to develop and own or from projects owned by third-party producers and reselling this RNG through our fueling infrastructure.
Our RNG business consists of procuring RNG from projects we plan to develop and own or from projects owned by third-party producers and reselling this RNG through our fueling infrastructure.
See the risks discussed under “ We are dependent on the production of vehicles and engines in our key customer and geographic markets by vehicle and engine manufacturers, over which we have no control ,” above and elsewhere in these risk factors. 21 Table of Contents Increases, decreases and general volatility in oil, gasoline, diesel, natural gas and RNG prices could adversely affect our business.
See the risks discussed under “ We are dependent on the production of vehicles and engines in our key customer and geographic markets by original equipment manufacturers, over which we have no control ,” above and elsewhere in these risk factors. 21 Table of Contents Increases, decreases and general volatility in oil, diesel, renewable diesel, natural gas, RNG and Environmental Credit prices could adversely affect our business.
If our vehicle fuels are not able to meet GHG emission limits or perform as well as other alternative fuels and vehicles, our solutions could be less competitive.
If our vehicle 27 Table of Contents fuels are not able to meet GHG emission limits or perform as well as other alternative fuels and vehicles, our solutions could be less competitive.
Our failure to comply with any applicable laws and regulations could result in a variety of administrative, civil and criminal enforcement measures, including, among others, assessment of monetary penalties, imposition of corrective requirements or prohibition from providing services to government entities.
Our failure to comply with any applicable laws and regulations could result in property damage, bodily injury or a variety of administrative, civil and criminal enforcement measures, including, among others, assessment of monetary penalties, imposition of corrective requirements, including cleanup costs, or prohibition from providing services to government entities.
Factors that may cause volatility in the prices of RNG, natural gas, crude oil, gasoline and diesel include, among others, changes in supply and availability of crude oil, RNG, and natural gas, government regulations, inventory levels, consumer demand, price and availability of alternatives, weather conditions, negative publicity about crude oil or natural gas drilling, production or transportation techniques and methods, worldwide economic, military, health and political conditions, transportation costs and the price of foreign imports.
Factors that may cause volatility in the prices of RNG, natural gas, crude oil, diesel, renewable diesel, and Environmental Credits include, among others, changes in supply and availability of crude oil, RNG and other renewable transportation fuels, and natural gas, government regulations, inventory levels, customer demand, price and availability of alternatives, weather conditions, negative publicity about crude oil or natural gas drilling, production or transportation techniques and methods, worldwide economic, military, health and political conditions, transportation costs and the price of foreign imports.
Risks Related to Our Indebtedness and Other Capital Resources. We may need to raise additional capital to continue to fund our business, which could have negative effects and may not be available when needed, on acceptable terms or at all.
We may need to raise additional capital to continue to fund our business, which could have negative effects and may not be available when needed, on acceptable terms or at all.
Fluctuations in the price of LCFS credits or the number of LCFS credits assigned will have a significantly greater effect on the success of livestock waste and dairy farm projects. RINs and LCFS Credit prices have fluctuated in recent years and will likely continue to be volatile.
Fluctuations in the price of LCFS credits or the number of LCFS credits assigned will significantly affect the success of our livestock waste and dairy farm projects. RINs and LCFS Credit prices have fluctuated in recent years and will likely continue to be volatile.
Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other alternative fuels or alternative vehicles over RNG (such as the September 2020 Executive Order or the 2021 Executive Order), would reduce the market for RNG as a vehicle fuel and harm our operating results, liquidity, and financial condition.
Any failure to adopt, delay in implementing, expiration, repeal or modification of these programs and regulations, or the adoption of any programs or regulations that encourage the use of other alternative fuels or alternative vehicles over RNG, could reduce the market for RNG as a vehicle fuel and harm our operating results, liquidity, and financial condition.
The prices of RNG, natural gas, crude oil, gasoline and diesel can be volatile and this volatility may continue to increase.
The prices of RNG, natural gas, crude oil, diesel, renewable diesel, and Environmental Credits can be volatile, and this volatility may continue to increase.
We have, and expect to continue to seek, long-term fueling station construction, maintenance and fuel sale contracts with various government bodies, which accounted for 22%, 31% and 27% of our revenue in 2020, 2021 and 2022, 23 Table of Contents respectively.
We have, and expect to continue to seek, long-term fueling station construction, maintenance and fuel sale contracts with various government bodies, which accounted for 31%, 27% and 30% of our revenue in 2021, 2022 and 2023, respectively.
A significant decline in the value of LCFS credits could adversely affect our business, financial condition, and results of operations. We have a history of losses and may incur additional losses in the future. We incurred pre-tax losses in 2020, 2021 and 2022.
A significant decline in the value of LCFS credits could adversely affect our business, financial condition, and results of operations. We have a history of losses and may incur additional losses in the future.
Contamination at properties we own or operate, will own or operate, or formerly owned or operated or to which hazardous substances were sent by us, may result in liability for us under environmental laws and regulations, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of contaminated soil and ground water, for impacts to human health and for damages to natural resources.
Contamination at properties we own or operate, will own or operate, or formerly owned or operated to which hazardous substances were sent by us, are subject to the Comprehensive Environmental Response, Compensation and Liability Act, which can impose liability for the full amount of remediation-related costs without regard to fault, for the investigation and cleanup of contaminated soil and ground water, for impacts to human health and for damages to natural resources.
In addition, our operations may result in the venting of methane, a potent GHG. These safety and environmental risks could result in uncontrollable flows of our fuels, fires, explosions, death, or serious injury, any of which may expose us to liability for personal injury, wrongful death, property damage, pollution and other environmental damage.
These safety and environmental risks could result in uncontrollable flows of our fuels, fires, explosions, death, or serious injury, any of which may expose us to liability for personal injury, wrongful death, property damage, pollution and other environmental damage.
Additionally, revenue from LCFS credits also depends on the price per LCFS credit, which is driven by various market forces, including the supply of and demand for LCFS credits, which in turn depends on the demand for traditional transportation fuel and the supply of renewable fuel from other renewable energy sources, and mandated CI targets, which determine the number of LCFS credits required to offset LCFS deficits.
Additionally, revenue from LCFS credits also depends on the price per LCFS credit. LCFS credit prices are driven by various market forces, including the supply of and demand for LCFS credits, which depends on the demand for traditional and other renewable fuels and mandated CI targets, which determine the number of LCFS credits required to offset LCFS deficits.
Any permanent or temporary discontinuation or suspension of federal and state programs that provide credits, grants and incentives, such as the alternative fuel excise tax credit (“AFTC”), would also adversely impact our revenue.
Any permanent or temporary discontinuation or suspension of federal and state programs that provide credits, grants and incentives, such as the AFTC, would also adversely impact our revenue.
Any of these factors could prevent completion or operation of projects, or otherwise adversely affect our business, financial condition, and results of operations. Acquisition, financing, construction, and development of projects by us or our partners that own projects may not commence on anticipated timelines or at all.
Any of these factors could prevent completion or operation of projects, or otherwise adversely affect our business, financial condition, and results of operations. 19 Table of Contents Acquisition, financing, construction, and development of projects by us or our partners that own projects and divestitures, investments or other strategic relationships, may not commence on anticipated timelines or at all, may not meet expectations, and may otherwise harm our business.
These significant fluctuations in our operating results may render period-to-period comparisons less meaningful, especially given uncertainties related to the impacts of the COVID-19 pandemic, and investors in our securities should not rely on the results of one period as an indicator of performance in any other period.
These significant fluctuations in our operating results may render period-to-period comparisons less meaningful, especially with respect to periods heavily impacted by effects of the COVID-19 pandemic, and investors in our securities should not rely on the results of one period as an indicator of performance in any other period.
Until the negotiations are final, however, and the parties have executed definitive documentation, we or our partners may not be able to consummate any development or acquisition transactions, or any other similar arrangements, on the terms set forth in the applicable letter of intent or at all. 19 Table of Contents The acquisition, financing, construction and development of projects involves numerous risks, including: the ability to obtain financing for a project on acceptable terms or at all; difficulties in identifying, obtaining, and permitting suitable sites for new projects; failure to obtain all necessary rights to land access and use; inaccuracy of assumptions with respect to the cost and schedule for completing construction; inaccuracy of assumptions with respect to the biogas potential, including quality, volume, and asset life; delays in deliveries or increases in the price of equipment; permitting and other regulatory issues, license revocation and changes in legal requirements; increases in the cost of labor, labor disputes and work stoppages; failure to receive quality and timely performance of third-party or utility services; unforeseen engineering and environmental problems; cost overruns; accidents involving personal injury or the loss of life; and weather conditions, catastrophic events, including fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events.
The acquisition, financing, construction and development of projects involves numerous risks, including: the ability to obtain financing for a project on acceptable terms or at all; difficulties in identifying, obtaining, and permitting suitable sites for new projects; failure to obtain all necessary rights to land access and use; inaccuracy of assumptions with respect to the cost and schedule for completing construction; inaccuracy of assumptions with respect to the biogas potential, including quality, volume, and asset life; delays in deliveries or increases in the price of equipment; permitting and other regulatory issues, license revocation and changes in legal requirements; increases in the cost of labor, labor disputes and work stoppages; potential business or financial stress of partners; failure to receive quality and timely performance of third-party or utility services; unforeseen engineering and environmental problems; cost overruns; accidents involving personal injury or the loss of life; and weather conditions, catastrophic events, including fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events.
If CARB reduces the CI score that it applies to waste conversion projects, such as dairy digesters, the number of LCFS credits for RNG generated at livestock waste and dairy farm projects will decline.
Livestock waste and dairy farm projects are heavily dependent on the LCFS credits and, to a lesser extent, RINs for commercial viability. If CARB reduces the CI score that it applies to waste conversion projects, such as dairy digesters, the number of LCFS credits for RNG generated at livestock waste and dairy farm projects will decline.
For any stations that are completed but unopened, we would have substantial investments in assets that do not produce revenue, and for any stations that are open and underperforming, we may decide to close the stations.
For any stations that are completed but unopened, we would have substantial investments in assets that do not produce revenue, and for any stations that are open and underperforming, we may decide to close the stations. For example, we have several nearly completed stations that are not open for fueling 23 Table of Contents operations.
All these factors, and in particular, expenditures on development of projects that will not generate significant revenue in the near term, can contribute to fluctuations in our quarterly financial performance and increase the likelihood that our operating results in a particular period will fall below investor expectations.
All these factors, and in particular, expenditures on development of projects that will not generate significant revenue in the near term, can contribute to fluctuations in our financial performance and increase the likelihood that our operating results in a particular period will fall below investor expectations. 20 Table of Contents Livestock waste and dairy farm projects are dependent on LCFS credits and RINS.
Also, shares of our common stock that may be issued upon the exercise, vesting or conversion of our outstanding stock options and restricted stock units may be eligible for sale in the public market, to the extent permitted by Rule 144 and the provisions of the applicable stock option and restricted stock unit agreements or if such shares have been registered under the Securities Act. 29 Table of Contents Sales of large amounts of our common stock by large stockholders, or the perception that such sales may occur, could cause the market price of our common stock to decline, regardless of the state of the Company’s business.
Also, shares of our common stock that may be issued upon the exercise, vesting or conversion of our outstanding stock options and restricted stock units may be eligible for sale in the public market, to the extent permitted by Rule 144 and the provisions of the applicable stock option and restricted stock unit agreements or if such shares have been registered under the Securities Act.
Our results of operations have historically experienced, and may continue to experience, significant fluctuations as a result of a variety of factors, including, among others, the amount and timing of our vehicle fuel sales, Environmental Credit sales and recognition of government credits, station construction sales, grants and incentives, such as AFTC (for example, we recorded all of the AFTC revenue associated with our vehicle fuel sales made in 2017 during the first quarter of 2018, and we recorded all of the AFTC revenue associated with our vehicles fuel sales made in 2018 and 2019 in the fourth quarter of 2019); fluctuations in commodity, station construction and labor costs; variations in the fair value of certain of our derivative instruments that are recorded in revenue; sales of compressors and other equipment used in RNG 24 Table of Contents production and at fueling stations; the amount and timing of our billing, collections and liability payments; and the other factors described in these risk factors.
Our results of operations have historically experienced, and may continue to experience, significant fluctuations as a result of a variety of factors, including, among others, the amount and timing of our vehicle fuel sales, Environmental Credit sales and recognition of government credits, station construction sales, grants and incentives, such as AFTC (for example, we recorded all of the AFTC revenue associated with our vehicle fuel sales made in the first and second quarters of 2022 during the third quarter of 2022); fluctuations in commodity, station construction and labor costs; fluctuations in expenditures and resource commitments due to new ADG RNG project developments; variations in the fair value of certain of our derivative instruments that are recorded in revenue; sales of compressors and other equipment used in RNG production and at fueling stations; the amount and timing of our billing, collections and liability payments; and the other factors described in these risk factors. 24 Table of Contents Our performance in certain periods has also been affected by transactions or events that have resulted in significant cash or non-cash gains or losses.
Projects that produce RNG often experience unpredictable production levels or other difficulties due to a variety of factors, including, among others, problems with equipment, severe weather, droughts, financial condition of the applicable ADG and LFG source owner, health crises and pandemics, construction delays, technical difficulties, high operating costs, limited availability, unfavorable composition of collected feedstock gas, and plant shutdowns caused by upgrades, expansion or required maintenance.
Our ability to maintain an adequate supply of RNG is subject to risks affecting RNG production, including unpredictable production levels or other difficulties due to, among others, problems with equipment, severe weather, droughts, financial condition of the applicable ADG and LFG source 18 Table of Contents owner, health crises and pandemics, construction delays, technical difficulties, high operating costs, limited availability, unfavorable composition of collected feedstock gas, and plant shutdowns caused by upgrades, expansion or required maintenance.
Any such declaration could deplete all or a large portion of our available cash flow, and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation.
Any such declaration could deplete all or a large portion of our available cash flow, and thereby reduce the amount of cash available to pursue our business plans or force us into bankruptcy or liquidation. Our warranty reserves may not adequately cover our warranty obligations, which could result in unexpected costs.
Our ability to generate revenue from our sale of RNG or our generation and sale of Environmental Credits depends on many factors, including the markets for RNG as a vehicle fuel and for Environmental Credits.
Our ability to generate revenue from our sale of RNG or our generation and sale of Environmental Credits depends on many factors, including the markets for RNG as a vehicle fuel and for Environmental Credits. The markets for Environmental Credits have been volatile and unpredictable in recent periods, and the prices for these credits are subject to fluctuations.
As of December 31, 2022, we have consolidated indebtedness of $148.6 million, net of debt discount, and we may incur additional debt in the future.
As of December 31, 2023, we had total consolidated indebtedness of $264.8 million, net of debt discount, and we may incur additional debt in the future.
Volatility or declines in the market price of our common stock could have other negative consequences, including, among others, further impairments to our assets (following the asset impairment charges we recorded in the third and fourth quarters of 2017 related to our former fueling compressor manufacturing business and our closure of certain fueling stations), potential impairments to our goodwill and a reduced ability to use our common stock for capital-raising, acquisitions or other purposes.
Volatility or declines in the market price of our common stock could have other negative consequences, including, among others, further impairments to our assets, potential impairments to our goodwill and a reduced ability to use our common stock for capital-raising, acquisitions or other purposes.
The September 2020 Executive Order also directed CARB to develop and propose regulations and strategies aimed at achieving the foregoing goals. Resulting regulations mandate increasing adoption of zero-emission vehicles.
The September 2020 Executive Order also directed CARB to develop and propose regulations and strategies aimed at achieving the foregoing goals. Resulting regulations mandate increasing adoption of zero-emission vehicles. In April 2023, CARB adopted the Advanced Clean Fleets regulation, which requires all truck fleets be zero emission by 2042.
Sales of our common stock, or the perception that such sales may occur, could cause the market price of our stock to drop significantly, regardless of the state of our business. All outstanding shares of our common stock are eligible for sale in the public market, subject in certain cases to the requirements of Rule 144 under the Securities Act.
All outstanding shares of our common stock are eligible for sale in the public market, subject in certain cases to the requirements of Rule 144 under the Securities Act.
Additionally, our business is influenced by laws, rules and regulations that require reductions in carbon emissions and/or the use of renewable fuels, such as the programs under which we generate Environmental Credits. 26 Table of Contents These programs and regulations, which have the effect of encouraging the use of RNG as a vehicle fuel, could expire or be repealed or amended for a variety of reasons.
Additionally, our business is influenced by laws, rules and regulations that require reductions in carbon emissions and/or the use of renewable fuels, such as the programs under which we generate Environmental Credits.
The price of our common stock may continue to fluctuate significantly, and you could lose all or part of your investment. The market price of our common stock has experienced, and may continue to experience, significant volatility.
The market price of our common stock has experienced, and may continue to experience, significant volatility.
Our warranty reserves may not adequately cover our warranty obligations, which could result in unexpected costs. We provide product warranties with varying terms and durations for the stations we build and sell, and we establish reserves for the estimated liability associated with these warranties.
We provide product warranties with varying terms and durations for the stations we build and sell, and we establish reserves for the estimated liability associated with these warranties.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe own, operate or supply 569 fueling stations in the United States and 25 in Canada. Fueling stations are facilities where RNG or conventional natural gas is dispensed in the form of CNG or LNG into the fuel tanks of vehicles for use as transportation fuel.
Biggest changeFueling stations are facilities where RNG or conventional natural gas is dispensed in the form of CNG or LNG into the fuel tanks of vehicles for use as transportation fuel. We own station equipment throughout the U.S. (See Note 10) that is used for dispensing CNG or LNG at properties we lease under long-term lease arrangements (See Note 16).
The plant had a production utilization rate of 79% for the year ended December 31, 2022. We own and operate the Pickens Plant located in Willis, Texas, approximately 50 miles north of Houston. We own approximately 24 acres of land on which this plant is situated, along with approximately 34 acres surrounding the plant.
The plant had a production utilization rate of 79% and 78% for the years ended December 31, 2022 and 2023, respectively. We own and operate the Pickens Plant located in Willis, Texas, approximately 50 miles north of Houston. We own approximately 24 acres of land on which this plant is situated, along with approximately 34 acres surrounding the plant.
We own station equipment throughout the United States (See Note 10) that is used for dispensing CNG or LNG at properties we lease under long-term lease arrangements (See Note 16). Additionally, we operate fueling stations or supply CNG or LNG to fueling stations where our customer owns the fueling station equipment.
Additionally, we operate fueling stations or supply CNG or LNG to fueling stations where our customer owns the fueling station equipment.
Added
During the year ended December 31, 2023, the Pickens Plant was offline for maintenance and repairs; hence, the plant had no LNG production in 2023. We own, operate or supply 579 fueling stations in the U.S. and 24 in Canada.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the opinion of management, however, we are not a party, and our properties are not subject, to any pending legal proceedings that are material to us. Item 4. Mine Safety Disclosures. None. ​ 32 Table of Contents PART II
Biggest changeIn the opinion of management, however, we are not a party, and our properties are not subject, to any pending legal proceedings that are material to us. Item 4. Mine Safety Disclosures. None. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table summarizes the Company’s share repurchase activity during the three months ended December 31, 2022 (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (or Approximate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar Value) ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ of Shares That ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ May Yet Be ​ ​ Total Number ​ Average ​ as Part of Publicly ​ Purchased ​ ​ of Shares ​ Price Paid ​ Announced Plans ​ Under the Plans Period Purchased per Share (a) or Programs or Program October 1, 2022 through October 31, 2022 ​ ​ — ​ $ — ​ ​ — ​ $ 26,502 November 1, 2022 through November 30, 2022 ​ — ​ ​ — ​ ​ — ​ ​ 26,502 December 1, 2022 through December 31, 2022 ​ — ​ ​ — ​ ​ — ​ ​ 26,502 Total ​ ​ — ​ $ — ​ ​ — ​ $ 26,502 ​ (a) Exclusive of fees and commissions.
Biggest changeRepurchases may also be made under plans set up pursuant to Rule 10b5-1 promulgated under the Exchange Act. 32 Table of Contents The following table summarizes the Company’s share repurchase activities during the three months ended December 31, 2023 (in thousands, except share and per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maximum Number ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (or Approximate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dollar Value) ​ ​ ​ ​ ​ ​ ​ ​ Total Number of ​ of Shares That ​ ​ ​ ​ ​ ​ ​ Shares Purchased ​ May Yet Be ​ ​ Total Number ​ Average ​ as Part of Publicly ​ Purchased ​ ​ of Shares ​ Price Paid ​ Announced Plans ​ Under the Plans Period Purchased per Share (a) or Programs or Program October 1, 2023 through October 31, 2023 ​ ​ — ​ $ — ​ ​ — ​ $ 26,502 November 1, 2023 through November 30, 2023 ​ — ​ ​ — ​ ​ — ​ ​ 26,502 December 1, 2023 through December 31, 2023 ​ — ​ ​ — ​ ​ — ​ ​ 26,502 Total ​ ​ — ​ $ — ​ ​ — ​ $ 26,502 ​ (a) Exclusive of fees and commissions.
Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically request that such information be treated as 33 Table of Contents soliciting material or specifically incorporate it by reference into such a filing.
Performance Graph This performance graph shall not be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Exchange Act, or incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into such a filing.
As of December 31, 2022, approximately $26.5 million remained available under the Repurchase Program. The Repurchase Program does not obligate us to acquire any specific number of shares.
As of December 31, 2023, approximately $26.5 million remained available under the Repurchase Program. The Repurchase Program does not obligate us to acquire any specific number of shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on The Nasdaq Global Select Market under the symbol “CLNE.” Holders There were approximately 50 holders of record of our common stock as of February 22, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on The Nasdaq Global Select Market under the symbol “CLNE.” Holders There were approximately 52 holders of record of our common stock as of February 22, 2024.
We chose to include the Russell 2000 Index because it includes issuers with similar market capitalizations and due to the lack of a comparable industry or line-of-business index or peer group, as we are the only actively traded public company whose only line of business is to sell natural gas for use as a vehicle fuel and the associated equipment and services necessary to use natural gas as a vehicle fuel. ​ Item 6. [Reserved]. ​ ​
We chose to include the Russell 2000 Index because it includes issuers with similar market capitalizations and due to the lack of a comparable industry or line-of-business index or peer group, 33 Table of Contents as we are the only actively traded public company whose only line of business is to sell natural gas for use as a vehicle fuel and the associated equipment and services necessary to use natural gas as a vehicle fuel.
The graph assumes that $100 was invested in our common stock and in each of these indices at the close of market on December 29, 2017 (the last trading day before the beginning of our fifth preceding fiscal year).
The graph assumes that $100 was invested in our common stock and in each of these indices at the close of market on December 31, 2018 (the last trading day before the beginning of our fifth preceding fiscal year).
Removed
Repurchases may also be made under plans set up pursuant to Rule 10b5-1 promulgated under the Exchange Act.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. ​ [ Reserved] 34 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations 34 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 53 Item 8. ​ Financial Statements and Supplementary Data 55
Biggest changeItem 6. ​ [ Reserved] 34 Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations 34 Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk 51 Item 8. ​ Financial Statements and Supplementary Data 52

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase was due to (1) higher prices of fuel sold and an increase in total GGEs of fuel sold, resulting in $90.9 million increase in product revenue from 2021 to 2022, (2) a $59.3 million decrease in non-cash stock-based sales incentive contra-revenue charges related to the Amazon Warrant, (3) an increase in RIN revenue of $2.9 million resulting from higher GGEs of RNG sold and higher average RIN prices in 2022 compared to those in 2021, (4) an increase in AFTC revenue of $1.1 million from 2021 to 2022, (5) an increase in station construction sales of $5.9 million due to increased construction activities, and (6) a change in fair value of our commodity swap and customer contracts entered into in connection with our Zero Now truck financing program, as we recognized an unrealized gain of $0.5 million in 2022 compared to an unrealized loss of $3.5 million in 2021.
Biggest changeThe decrease was primarily due to (1) a $36.3 million increase in non-cash stock-based sales incentive contra-revenue charges relating to the Amazon Warrant driven by higher customer fuel purchases, (2) a decrease in RIN revenue of $8.8 million primarily resulting from lower average RIN prices and lower share of RIN values in 2023 when compared to those in 2022, (3) a decrease in AFTC revenue of $0.9 million due to increased AFTC revenue sharing with customers, (4) a decrease in LCFS revenue of $2.7 million primarily resulting from lower average LCFS prices in 2023 when compared to those in 2022 and increased LCFS revenue sharing with customers, and (5) a change in fair value of our commodity swap and customer contracts entered into in connection with our Zero Now truck financing program, as we recognized an unrealized loss of $0.2 million in 2023 compared to an unrealized gain of $0.5 million in 2022.
Historically, inflation has not significantly affected our operating results; however, costs for construction, repairs, maintenance, electricity and insurance are all subject to inflationary pressures, which could affect our ability to maintain our stations adequately, build new stations, expand our existing facilities or pursue additional facilities, and could materially impact our operating costs. 49 Table of Contents Liquidity and Capital Resources Liquidity Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of investments or the acquisition of additional funds through capital management.
Historically, inflation has not significantly affected our operating results; however, costs for construction, repairs, maintenance, electricity and insurance are all subject to inflationary pressures, which could affect our ability to maintain our stations adequately, build new stations, expand our existing facilities or pursue additional facilities, and could materially impact our operating costs. 47 Table of Contents Liquidity and Capital Resources Liquidity Liquidity is the ability to meet present and future financial obligations through operating cash flows, the sale or maturity of investments or the acquisition of additional funds through capital management.
More information about our GGEs serviced in the periods relating to O&M services is included below under “Key Operating Data.” Additionally, a discussion of service revenue is included below under “Results of Operations.” Key Operating Data In evaluating our operating performance, we focus primarily on: (1) the amount of total fuel volume we sell to our customers with particular focus on RNG volume as a subset of total fuel volume, (2) O&M services volume dispensed at facilities we do not own but where we provide O&M services on a per-gallon or fixed fee basis, (3) our station construction cost of sales, and (4) net income (loss) attributable to us.
More information about our GGEs serviced in the periods relating to O&M services is included below under “Key Operating Data.” Additionally, a discussion of service revenue is included below under “Results of Operations.” 36 Table of Contents Key Operating Data In evaluating our operating performance, we focus primarily on: (1) the amount of total fuel volume we sell to our customers with particular focus on RNG volume as a subset of total fuel volume, (2) O&M services volume dispensed at facilities we do not own but where we provide O&M services on a per-gallon or fixed fee basis, (3) our station construction cost of sales, and (4) net income (loss) attributable to us.
(3) Includes $83.6 million and $24.3 million of non-cash stock-based sales incentive contra-revenue charges related to the Amazon Warrant (as defined in Note 13) for the years ended December 31, 2021 and 2022, respectively. (4) The change in fair value of derivative instruments is related to the Company’s commodity swap and customer fueling contracts.
(3) Includes $83.6 million, $24.3 million and $60.6 million of non-cash stock-based sales incentive contra-revenue charges related to the Amazon Warrant (as defined in Note 13) for the years ended December 31, 2021, 2022 and 2023, respectively. (4) The change in fair value of derivative instruments is related to the Company’s commodity swap and customer fueling contracts.
Through our sales of RNG, which is derived from biogenic methane produced by the breakdown of organic waste, we help thousands of vehicles, from airport shuttles to city buses to waste and heavy-duty trucks, reduce their amount of climate-harming greenhouse gases (“GHG”) from 60% to over 400% based on determinations by the California Air Resources Board (“CARB”), depending on the source of the RNG, while also reducing criteria pollutants such as Nitrogen Oxides, or NOx.
Through our sales of RNG, which is derived from biogenic methane produced by the breakdown of organic waste, we help thousands of vehicles, from airport shuttles to city buses to waste and heavy-duty trucks, reduce their amount of climate-harming greenhouse gases (“GHG”) from 60% to over 400% based on determinations by the California Air Resources Board (“CARB”), depending on the source of the RNG, while also 34 Table of Contents reducing criteria pollutants such as Nitrogen Oxides, or NOx.
As of December 31, 2022, we served over 1,000 fleet customers operating over 50,000 vehicles on our fuels. Longer term, we plan to expand availability of hydrogen fuel for vehicle fleets. As operators deploy more hydrogen powered vehicles, we can modify our fueling stations to reform our RNG and deliver clean hydrogen to customers.
As of December 31, 2023, we served over 1,000 fleet customers operating over 50,000 vehicles on our fuels. Longer term, we plan to expand availability of hydrogen fuel for vehicle fleets. As operators deploy more hydrogen powered vehicles, we can modify our fueling stations to reform our RNG and deliver clean hydrogen to customers.
In October 2018, in support of our Zero Now truck financing program, we executed two commodity swap contracts with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies and THUSA, for a total of five million diesel gallons annually from April 1, 2019 to June 30, 2024.
In October 2018, in support of our Zero Now truck financing program, we executed two commodity swap contracts with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies, for a total of five million diesel gallons annually from April 1, 2019 to June 30, 2024.
Among other things, we believe many California lawmakers and regulators desire to limit and ultimately discontinue the production and use of internal combustion engines because such engines have “tailpipe” emissions. ● We believe the lack of substantial growth in the heavy-duty trucking market has been driven in part by the experience of operators with, or perceptions of, unsatisfactory performance by prior models of heavy-duty natural gas truck engines, actual or perceived insufficiencies in the financial incentives to convert, and improvements in diesel engine technology.
Among other things, we believe many California lawmakers and regulators’ desire to limit and ultimately discontinue the production and use of internal combustion engine is because such engines have “tailpipe” emissions. ● We believe the lack of substantial growth in the heavy-duty trucking market has been driven in part by the experience of operators with, or perceptions of, unsatisfactory performance by prior models of heavy-duty natural gas truck engines, actual or perceived insufficiencies in the financial incentives to convert, and improvements in diesel engine technology.
Additionally, RNG and conventional natural gas are generally less expensive for vehicle operators than gasoline and diesel on an energy equivalent basis. According to the U.S. Energy Information Administration, demand for renewable and conventional natural gas fuels in the United States has increased in recent years and is expected to continue to increase.
Additionally, RNG and conventional natural gas are generally less expensive for vehicle operators than gasoline and diesel on an energy equivalent basis. According to the U.S. Energy Information Administration, demand for renewable and conventional natural gas fuels in the U.S. has increased in recent years and is expected to continue to increase.
Furthermore, changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuance of short-term and long-term debt securities. See “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A of this report for more information.
However, changes in market interest rates may affect the interest rate and corresponding interest expense on any new issuance of short-term and long-term debt securities. See “Quantitative and Qualitative Disclosures about Market Risk” in Part II, Item 7A of this report for more information.
We have collected nearly all receivables relating to alternative fuel excise tax credits (“AFTC”) generated from 2021 fuel sales in 2022. In addition, as a result of the Inflation Reduction Act of 2022 being enacted on August 16, 2022, AFTC was reinstated and extended for an additional three years, beginning retroactively to January 1, 2022.
We have collected nearly all receivables relating to alternative fuel excise tax credits (“AFTC”) generated from 2022 fuel sales in 2023. In addition, as a result of the Inflation Reduction Act of 2022 being enacted on August 16, 2022 (the “IRA”), AFTC was reinstated and extended for an additional three years, beginning retroactively to January 1, 2022.
In addition, such an increase in RNG demand could also result in more robust competition for supplies of RNG, including from other vehicle fuel providers, gas utilities (which may have distinct advantages in accessing RNG supply, including potential use of ratepayer funds to fund RNG purchases if approved by a utility’s regulatory commission) and other users and providers.
In addition, such an increase in RNG demand could also result in more robust competition for supplies of RNG, including from other vehicle fuel providers, gas utilities (which may have distinct advantages in 41 Table of Contents accessing RNG supply, including potential use of ratepayer funds to fund RNG purchases if approved by a utility’s regulatory commission) and other users and providers.
Because a significant change in one or more of these estimates 45 Table of Contents could affect the profitability of these contracts, the contract price and cost estimates are reviewed periodically as work progresses and adjustments proportionate to the cost-to-cost measure of progress are reflected in contract revenues in the reporting period when such estimates are revised as discussed above.
Because a significant change in one or more of these estimates could affect the profitability of these contracts, the contract price and cost estimates are reviewed periodically as work progresses and adjustments proportionate to the cost-to-cost measure of progress are reflected in contract revenues in the reporting period when such estimates are revised as discussed above.
Any of these outcomes could force us to purchase credits in the open market to cover any credits we have 43 Table of Contents contracted to sell, retire credits we may have generated but not yet sold, reduce or eliminate a significant revenue stream or incur substantial additional and unplanned expenses.
Any of these outcomes could force us to purchase credits in the open market to cover any credits we have contracted to sell, retire credits we may have generated but not yet sold, reduce or eliminate a significant revenue stream or incur substantial additional and unplanned expenses.
In addition, as of December 31, 2022, we had a fixed supply arrangement with UPS for the supply and sale of 170.0 million GGEs of RNG through March 2026.
In addition, as of December 31, 2023, we had a fixed supply arrangement with UPS for the supply and sale of 170.0 million GGEs of RNG through March 2026.
The Berkshire Term Loan 2 bore interest at an annual interest rate of 5% and had a maturity date of January 31, 2027. Payments for interest and principal were due 39 Table of Contents monthly beginning March 1, 2022, with a final payment of remaining principal and interest due on the maturity date.
The Berkshire Term Loan 2 bore interest at an annual interest rate of 5% and had a maturity date of January 31, 2027. Payments for interest and principal were due monthly beginning March 1, 2022, with a final payment of remaining principal and interest due on the maturity date.
Discussions of 2020 items and year-to-year comparisons of 2021 and 2020 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 24, 2022.
Discussions of 2021 items and year-to-year comparisons of 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 28, 2023.
The amounts are classified as revenue because the Company’s commodity swap contracts are used to economically offset the risk associated with the diesel-to-natural gas price spread resulting from customer fueling contracts under the Company’s Zero Now truck financing program. (5) Represents AFTC. AFTC was available for vehicle fuel sales made through December 31, 2021.
The amounts are classified as revenue because the Company’s commodity swap contracts are used to economically offset the risk associated with the diesel-to-natural gas price spread resulting from customer fueling contracts under the Company’s Zero Now truck financing program. (5) Represents AFTC. AFTC is available for vehicle fuel sales made through December 31, 2024.
See Note 1 for information about recently adopted accounting pronouncements and recently issued accounting pronouncements. Results of Operations The discussions below compare our results of operations in 2022 and 2021.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements. See Note 1 for information about recently adopted accounting pronouncements and recently issued accounting pronouncements. Results of Operations The discussions below compare our results of operations in 2023 and 2022.
The timing and necessity of any future capital raise would depend on various factors, including our rate and volume of, and prices for, natural gas fuel sales and other volume-related activity, the direct and indirect impacts of the COVID-19 pandemic, new station construction, debt repayments (either before or at maturity) and any potential mergers, acquisitions, investments, divestitures or other strategic relationships we may pursue, as well as the other factors that affect our revenue and expense levels as described in this MD&A and elsewhere in this report.
The timing and necessity of any future capital raise would depend on various factors, including our rate and volume of, and prices for, natural gas fuel sales and other volume-related activity, new station construction, debt repayments (either before or at maturity) and any potential mergers, acquisitions, investments, divestitures or other strategic relationships we may pursue, as well as the other factors that affect our revenue and expense levels as described in this MD&A and elsewhere in this report.
Furthermore, our volume-related product revenue has been affected by the Amazon Warrant Charges resulting from 42 Table of Contents immediate vesting of a portion of the Amazon Warrant and subsequent vesting associated with fuel purchases made by Amazon and its affiliates.
Furthermore, our volume-related product revenue has been affected by the Amazon Warrant Charges resulting from immediate vesting of a portion of the Amazon Warrant and subsequent vesting associated with fuel purchases made by Amazon and its affiliates.
Our business plan calls for approximately $90.0 million in capital expenditures in 2023. These capital expenditures primarily relate to the construction of fueling stations, IT software and equipment and LNG plant costs, and we expect to fund these expenditures primarily through cash on hand and cash generated from operations.
Our business plan calls for approximately $60.0 million in capital expenditures in 2024. These capital expenditures primarily relate to the construction of fueling stations, IT software and equipment and LNG plant costs, and we expect to fund these expenditures primarily through cash on hand and cash generated from operations.
We expect cash provided by our operating activities to fluctuate as a result of a number of factors, including our operating results and the factors that affect these results, including the amount and timing of our vehicle fuel sales, station construction sales, sales of RINs and LCFS Credits and recognition of government credits, the continuing direct and indirect effects of the COVID-19 pandemic, grants and incentives, if any; fluctuations in commodity, station construction and labor costs; environmental credit prices; variations in the fair value of certain of our derivative instruments that are recorded in revenue; and the amount and timing of our billing, collections and liability payments.
We expect cash provided by our operating activities to fluctuate as a result of a number of factors, including our operating results and the factors that affect these results, including the amount and timing of our vehicle fuel sales, station construction sales, sales of RINs and LCFS Credits and recognition of government credits, grants and incentives, if any; fluctuations in commodity, station construction and labor costs; environmental credit prices; variations in the fair value of certain of our derivative instruments that are recorded in revenue; and the amount and timing of our billing, collections and liability payments.
Historical results are not indicative of the results to be expected in the current period or any future period. 47 Table of Contents 2022 Compared to 2021 The table below presents, for each period, each line item of our statement of operations as a percentage of our total revenue for the period.
Historical results are not indicative of the results to be expected in the current period or any future period. 45 Table of Contents 2023 Compared to 2022 The table below presents, for each period, each line item of our statement of operations as a percentage of our total revenue for the period.
GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and may result in material effects on our operating results and financial position.
GAAP requires management to make estimates 42 Table of Contents and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates and may result in material effects on our operating results and financial position.
(3) Includes $19.8 million, $20.7 million, and $21.8 million of AFTC revenue for the years ended December 31, 2020, 2021 and 2022, respectively. ​ (4) Includes $83.6 million and $24.3 million of non-cash stock-based sales incentive contra-revenue charges relating to the Amazon Warrant (as defined in Note 13) for the years ended December 31, 2021 and 2022, respectively.
(3) Includes $20.7 million, $21.8 million, and $20.9 million of AFTC revenue for the years ended December 31, 2021, 2022 and 2023, respectively. (4) Includes $83.6 million, $24.3 million and $60.6 million of non-cash stock-based sales incentive contra-revenue charges relating to the Amazon Warrant (as defined in Note 13) for the years ended December 31, 2021, 2022 and 2023, respectively.
On December 22, 2022, we entered into a four-year $150.0 million sustainability-linked senior secured first lien term loan with certain affiliates of, or funds managed by, Riverstone Credit Partners L.P. (“Riverstone Credit Partners”), a dedicated credit investment platform managed by Riverstone Holdings LLC (“Riverstone”) that focuses on energy, power, decarbonization, and infrastructure.
On December 22, 2022, we entered into a four-year $150.0 million sustainability-linked senior secured first lien term loan (the “Riverstone Credit Agreement”) with certain affiliates of, or funds managed by, Riverstone Credit Partners L.P., a dedicated credit investment platform managed by Riverstone Holdings LLC 38 Table of Contents (“Riverstone”) that focuses on energy, power, decarbonization, and infrastructure.
These significant fluctuations in our operating results may render period-to-period comparisons less meaningful, especially given the current uncertainties relating to macro-economic growth, inflation trends, and the ongoing effect of the COVID-19 pandemic, and investors in our securities should not rely on the results of one period as an indicator of performance in any other period.
These significant fluctuations in our operating results may render period-to-period comparisons less meaningful, especially given the current uncertainties relating to macro-economic growth and inflation trends, and investors in our securities should not rely on the results of one period as an indicator of performance in any other period.
Station construction contracts are generally short-term, except for certain larger and more complex stations, which can take up to 24 months to complete. For most of our station construction contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single station.
See Note 1 for additional information. Station construction contracts are generally short-term, except for certain larger and more complex stations, which can take up to 24 months to complete. For most of our station construction contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and components into a single station.
This section of the Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons of 2022 to 2021.
This section of the Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons of 2023 to 2022.
On January 31, 2022, NG Advantage entered into a second amendment to the Amended and Restated Loan and Security Agreement with Berkshire Bank (the “Berkshire ALA”) (See Note 12) pursuant to which Berkshire Bank agreed to extend new term loans in an aggregate principal amount of $14.0 million (collectively, the “Berkshire Term Loan 2”) to NG Advantage.
On January 31, 2022, NG Advantage LLC (“NG Advantage”) entered into a second amendment to the Amended and Restated Loan and Security Agreement with Berkshire Bank (the “Berkshire ALA”) pursuant to which Berkshire Bank agreed to extend new term loans in an aggregate principal amount of $14.0 million (collectively, the “Berkshire Term Loan 2”) to NG Advantage.
Based on our outstanding indebtedness and applicable interest rates as of December 31, 2022, we expect our total interest payment obligations relating to our indebtedness to be approximately $16.8 million for the year ending December 31, 2023. We plan to and believe we are able to make all expected principal and interest payments in the next 12 months.
Based on our outstanding indebtedness and applicable interest rates as of December 31, 2023, we expect our total interest payment obligations relating to our indebtedness to be approximately $29.2 million for the year ending December 31, 2024. We plan to and believe we are able to make all expected principal and interest payments in the next 12 months.
As a clean energy solutions provider, we supply RNG and conventional natural gas, both sourced from third party suppliers, in the form of CNG and LNG, for medium and heavy-duty vehicles; design and build, as well as operate and maintain (“O&M”), public and private vehicle fueling stations in the United States and Canada; develop and own dairy anaerobic digester gas (“ADG”) RNG production facilities; sell and service compressors and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional natural gas via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits (collectively, “Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California and the Oregon Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits, grants and incentives.
(the “DR JV”) (see Note 4)) and conventional natural gas (sourced from third party suppliers), in the form of CNG and LNG, for medium and heavy-duty vehicles; design and build, as well as operate and maintain (“O&M”), public and private vehicle fueling stations in the United States (“U.S.”) and Canada; develop and own dairy anaerobic digester gas (“ADG”) RNG production facilities; sell and service compressors and other equipment used in RNG production and at fueling stations; transport and sell RNG and conventional natural gas via “virtual” natural gas pipelines and interconnects; sell U.S. federal, state and local government credits (collectively, “Environmental Credits”) we generate by selling RNG as a vehicle fuel, including Renewable Identification Numbers (“RIN Credits” or “RINs”) under the federal Renewable Fuel Standard Phase 2 and credits under the California, Oregon, and Washington Low Carbon Fuel Standards (collectively, “LCFS Credits”); and obtain federal, state and local tax credits, grants and incentives.
We believe we have sufficient liquidity to support business operations through this volatile period, including total cash and cash equivalents and short-term investments of $263.5 million, excluding current portion of restricted cash, as of December 31, 2022 and $1.0 million of current debt.
We believe we have sufficient liquidity to support business operations through this volatile period, including total cash and cash equivalents and short-term investments of $263.1 million, excluding current portion of restricted cash, as of December 31, 2023 and $1.8 million of current debt.
The $2.0 million is classified as short-term restricted cash and a current asset and is included in “Cash, cash equivalents and current portion of restricted cash” in the accompanying consolidated balance sheets as of December 31, 2022. ​ Share Repurchase Program.
The $2.0 million is classified as short-term restricted cash and a current asset and is included in “Cash, cash equivalents and current portion of restricted cash” in the accompanying consolidated balance sheets as of December 31, 2022 and 2023. AFTC.
Certain gallons are included in both fuel and service volumes when the Company sells fuel (product revenue) to a customer and provides maintenance services (service revenue) to the same customer. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel volume, GGEs (2) sold (in millions), ​ Year Ended December 31, correlating to total volume-related product revenue 2020 2021 2022 RNG (1) ​ 153.3 ​ ​ 167.0 ​ ​ 198.2 Conventional natural gas (1) ​ 82.1 ​ ​ 78.8 ​ ​ 69.6 Total fuel volume ​ 235.4 ​ 245.8 ​ 267.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ O&M services volume, GGEs (2) serviced (in millions), ​ Year Ended December 31, correlating to volume-related O&M services revenue 2020 2021 2022 O&M services volume ​ 218.4 ​ ​ 229.8 ​ ​ 240.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, Other operating data (in millions) 2020 2021 2022 Station construction cost of sales ​ $ 24.0 ​ $ 15.0 ​ $ 19.4 Net loss attributable to Clean Energy Fuels Corp.
Certain gallons are included in both fuel and service volumes when the Company sells fuel (product revenue) to a customer and provides maintenance services (service revenue) to the same customer. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel volume, GGEs (2) sold (in millions), ​ Year Ended December 31, correlating to total volume-related product revenue 2021 2022 2023 RNG (1) ​ 167.0 ​ ​ 198.2 ​ ​ 225.7 Conventional natural gas (1) ​ 78.8 ​ ​ 69.6 ​ ​ 62.5 Total fuel volume ​ 245.8 ​ 267.8 ​ 288.2 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ O&M services volume, GGEs (2) serviced (in millions), ​ Year Ended December 31, correlating to volume-related O&M services revenue 2021 2022 2023 O&M services volume ​ 229.8 ​ ​ 240.4 ​ ​ 256.9 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, Other operating data (in millions) 2021 2022 2023 Station construction cost of sales ​ $ 15.0 ​ $ 19.4 ​ $ 24.4 Net loss attributable to Clean Energy Fuels Corp.
Some of our customers tend to consume more of our vehicle fuels in the summer months, when buses and other fleet vehicles use more fuel to power their air conditioning systems, which typically translate to an increased volume of fuel sold in the summer months.
Seasonality and Inflation To some extent, we experience seasonality in our results of operations. Some of our customers tend to consume more of our vehicle fuels in the summer months, when buses and other fleet vehicles use more fuel to power their air conditioning systems, which typically translate to an increased volume of fuel sold in the summer months.
For the year ended December 31, 2022, we recognized $21.8 million in AFTC revenue. Performance Overview This performance overview discusses matters on which our management focuses in evaluating our financial condition and our operating results.
For the year ended December 31, 2023, we recognized $20.9 million in AFTC revenue. Performance Overview This performance overview discusses matters on which our management focuses in evaluating our financial condition and our operating results.
The amount of RNG we sell as vehicle fuel, which is delivered in the form of CNG or LNG, has continued to experience robust growth, and increased by 18.7% from 2021 to 2022.
The amount of RNG we sell as vehicle fuel, which is delivered in the form of CNG or LNG, has continued to experience robust growth, and increased by 13.9% from 2022 to 2023.
Sources of Revenue The following tables represent our sources of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, Revenue (in millions) ​ 2020 2021 2022 Product revenue (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume-related (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel sales (3) ​ $ 169.4 ​ $ 131.0 ​ $ 281.1 Change in fair value of derivative instruments (4) ​ ​ 2.1 ​ ​ (3.5) ​ ​ 0.5 RIN Credits ​ ​ 15.3 ​ ​ 31.7 ​ ​ 34.7 LCFS Credits ​ ​ 18.7 ​ ​ 16.8 ​ ​ 12.6 AFTC (5) ​ 19.8 ​ 20.7 ​ 21.8 Total volume-related product revenue ​ ​ 225.3 ​ ​ 196.7 ​ ​ 350.7 Station construction sales ​ ​ 26.6 ​ ​ 16.4 ​ ​ 22.3 Total product revenue ​ 251.9 ​ 213.1 ​ 373.0 Service revenue (6) : ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume-related, O&M services ​ ​ 39.6 ​ ​ 41.9 ​ ​ 45.9 Other services ​ ​ 0.2 ​ ​ 0.6 ​ ​ 1.3 Total service revenue ​ 39.8 ​ 42.5 ​ 47.2 Total revenue ​ $ 291.7 ​ $ 255.6 ​ $ 420.2 (1) A discussion of product revenue is included below under “Results of Operations.” 36 Table of Contents (2) Our volume-related product revenue primarily consists of sales of RNG and conventional natural gas, in the form of CNG and LNG, and sales of RINs and LCFS Credits in addition to changes in fair value of our derivative instruments.
Sources of Revenue The following table presents our sources of revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, Revenue (in millions) ​ 2021 2022 2023 Product revenue (1) : ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume-related (2) ​ ​ ​ ​ ​ ​ ​ ​ ​ Fuel sales (3) ​ $ 131.0 ​ $ 281.1 ​ $ 287.0 Change in fair value of derivative instruments (4) ​ ​ (3.5) ​ ​ 0.5 ​ ​ (0.2) RIN Credits ​ ​ 31.7 ​ ​ 34.7 ​ ​ 25.9 LCFS Credits ​ ​ 16.8 ​ ​ 12.6 ​ ​ 9.9 AFTC (5) ​ 20.7 ​ 21.8 ​ 20.9 Total volume-related product revenue ​ ​ 196.7 ​ ​ 350.7 ​ ​ 343.5 Station construction sales ​ ​ 16.4 ​ ​ 22.3 ​ ​ 26.4 Total product revenue ​ 213.1 ​ 373.0 ​ 369.9 Service revenue (6) : ​ ​ ​ ​ ​ ​ ​ ​ ​ Volume-related, O&M services ​ ​ 41.9 ​ ​ 45.9 ​ ​ 52.7 Other services ​ ​ 0.6 ​ ​ 1.3 ​ ​ 2.6 Total service revenue ​ 42.5 ​ 47.2 ​ 55.3 Total revenue ​ $ 255.6 ​ $ 420.2 ​ $ 425.2 (1) A discussion of product revenue is included below under “Results of Operations.” (2) Our volume-related product revenue primarily consists of sales of RNG and conventional natural gas, in the form of CNG and LNG, and sales of RINs and LCFS Credits in addition to changes in fair value of our derivative instruments.
Off-Balance Sheet Arrangements As of December 31, 2022, we had the following off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources: ● Outstanding surety bonds for construction contracts and general corporate purposes totaling $50.2 million; ● An outstanding loan commitment to an equity method investee; ● Quarterly fixed-price natural gas purchase contracts with take-or-pay commitments, the amount of which is shown under “Contractual Obligations” above; ● One long-term natural gas sale contract with a fixed supply commitment. 52 Table of Contents We provide surety bonds primarily for construction contracts in the ordinary course of our business, as a form of guarantee.
Off-Balance Sheet Arrangements As of December 31, 2023, we had the following off-balance sheet arrangements that have had, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources: ● Outstanding surety bonds for construction contracts and general corporate purposes totaling $50.4 million; ● Quarterly fixed-price natural gas purchase contracts with take-or-pay commitments, the amount of which is shown under “Contractual Obligations” above; ● One long-term natural gas sale contract with a fixed supply commitment.
As of December 31, 2022, we deliver RNG to the transportation market through 569 fueling stations we own, operate or supply in 42 states and the District of Columbia in the U.S., including over 200 stations in California. We also own, operate, or supply 25 fueling stations in Canada as of December 31, 2022.
As of December 31, 2023, we deliver RNG to the transportation market through 579 fueling stations we own, operate or supply in 43 states and the District of Columbia in the U.S., including over 200 stations in California. We also own, operate, or supply 24 fueling stations in Canada as of December 31, 2023.
The narrative that follows provides a comparative discussion of certain of these line items between periods. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2021 2022 Statements of Operations Data: ​ Revenue: ​ Product revenue 83.4 % 88.8 % Service revenue 16.6 11.2 ​ Total revenue 100.0 100.0 ​ Operating expenses: ​ Cost of sales (exclusive of depreciation and amortization shown separately below): ​ Product cost of sales 74.2 66.6 ​ Service cost of sales 10.2 6.7 ​ Selling, general and administrative 35.2 26.1 ​ Depreciation and amortization 17.7 13.0 ​ Total operating expenses 137.3 112.4 ​ Operating loss (37.2) (12.3) ​ Interest expense (1.7) (1.5) ​ Interest income 0.4 0.8 ​ Other income, net 0.4 — ​ Loss from equity method investments (0.2) (1.1) ​ Gain from sale of certain assets of subsidiary 1.5 — ​ Loss before income taxes (36.8) (14.1) ​ Income tax expense — (0.1) ​ Net loss (36.8) (14.2) ​ Loss attributable to noncontrolling interest 0.4 0.2 ​ Net loss attributable to Clean Energy Fuels Corp.
The narrative that follows provides a comparative discussion of certain of these line items between periods. ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ ​ 2022 2023 Statements of Operations Data: ​ Revenue: ​ Product revenue 88.8 % 87.0 % Service revenue 11.2 13.0 ​ Total revenue 100.0 100.0 ​ Operating expenses: ​ Cost of sales (exclusive of depreciation and amortization shown separately below): ​ Product cost of sales 66.6 72.9 ​ Service cost of sales 6.7 7.9 ​ Selling, general and administrative 26.1 26.4 ​ Depreciation and amortization 13.0 10.7 ​ Total operating expenses 112.4 117.9 ​ Operating loss (12.3) (18.0) ​ Interest expense (1.5) (5.4) ​ Interest income 0.8 2.6 ​ Other income, net — — ​ Loss from equity method investments (1.1) (2.9) ​ Loss before income taxes (14.1) (23.7) ​ Income tax (expense) benefit (0.1) 0.1 ​ Net loss (14.2) (23.6) ​ Loss attributable to noncontrolling interest 0.2 0.1 ​ Net loss attributable to Clean Energy Fuels Corp.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account for revenue recognition. We recognize revenue on various products and services.
Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our significant uses of fair value measurements include the valuation of commodity swaps, customer contracts, and available-for-sale debt securities, all of which require significant judgment. Recently Adopted Accounting Pronoucements and Recently Issued Accounting Pronouncements.
Categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our significant uses of fair value measurements include but are not limited to the valuation of commodity swaps, customer contracts, warrants, and available-for-sale debt securities, all of which require significant judgment.
Valuation allowances are established when management determines it is more likely than not that deferred tax assets will not be realized. When evaluating the need for a valuation analysis, we use estimates involving a high degree of judgment including projected future U.S. GAAP income and the amounts and estimated timing of the reversal of any deferred tax assets and liabilities.
Valuation allowances are established when management 44 Table of Contents determines it is more likely than not that deferred tax assets will not be realized. When evaluating the need for a valuation analysis, we use estimates involving a high degree of judgment including projected future U.S.
In connection with the second amendment to the Berkshire ALA, Berkshire Bank released $7.0 million, classified in “Long-term portion of restricted cash” in the accompanying consolidated balance sheets as of December 31, 2021, to the Company related to the Company’s limited guaranty under the Berkshire ALA. ​ On December 22, 2022, pursuant to the term loan credit agreement with Riverstone Credit Partners, NG Advantage fully repaid all outstanding principal balances and related accrued and unpaid interest under the Berkshire ALA and the Berkshire Term Loan 2.
In connection with the second amendment to the Berkshire ALA, Berkshire Bank released $7.0 million to the Company related to the Company’s limited guaranty under the Berkshire ALA. ​ On December 22, 2022, pursuant to the Riverstone Credit Agreement, NG Advantage fully repaid all outstanding principal balances and related accrued and unpaid interest under the Berkshire ALA and the Berkshire Term Loan 2.
The removal of the fueling station equipment and site improvements commenced in the third quarter of 2022 and is expected to be completed by the end of the first quarter of 2023.
The removal of the fueling station equipment and site improvements commenced in the third quarter of 2022 and was completed by the end of the third quarter of 2023.
We had total indebtedness, consisting of our debt and finance leases, of approximately $153.1 million in principal amount as of December 31, 2022, of which approximately $1.0 million, $1.4 million, $0.6 million, and $150.1 million is expected to become due in 2023, 2024, 2025, and 2026, respectively.
We had total indebtedness, consisting of our debt and finance leases, of approximately $303.9 million in principal amount as of December 31, 2023, of which approximately $1.8 million, $1.0 million, $0.6 million, $0.4 million, $0.1 million and $300.0 million are expected to become due in 2024, 2025, 2026, 2027, 2028 and thereafter, respectively.
In spite of these market conditions, we believe our key customer markets, including heavy-duty trucking, airports, refuse, and public transit, are well-suited for the adoption of our vehicle fuels because they consume relatively high volumes of fuel, refuel at centralized locations or along well-defined routes and/or are facing increasingly stringent emissions or other environmental requirements.
If these adverse macroeconomic conditions and other uncertainties in our industry persist, our financial results and stock price may continue to be adversely affected. 40 Table of Contents In spite of these market conditions, we believe our key customer markets, including heavy-duty trucking, airports, refuse, and public transit, are well-suited for the adoption of our vehicle fuels because they consume relatively high volumes of fuel, refuel at centralized locations or along well-defined routes and/or are facing increasingly stringent emissions or other environmental requirements.
Service cost of sales for 2022 increased by $2.0 million to $28.0 million, representing 6.7% of total revenue, from $26.0 million, representing 10.2% of total revenue, in 2021. The increase was primarily due to an increase in GGEs serviced in 2022 as compared to that in 2021. Selling, general and administrative.
Service cost of sales. Service cost of sales for 2023 increased by $5.7 million to $33.7 million, representing 7.9% of total revenue, from $28.0 million, representing 6.7% of total revenue, in 2022. The increase was primarily due to an increase in GGEs serviced in 2023 when compared to those serviced in 2022. Selling, general and administrative.
(3) Represent various leases including ground leases for our Boron Plant and fueling stations, property leases relating to our office spaces, and leases for equipment. (4) Represent estimates of our long-term, quarterly natural gas purchase contracts with a take-or-pay commitment.
(2) Consist of finance lease obligations, including future interest payments, relating to financing of equipment purchases. (3) Represent various leases including ground leases for our Boron, California plant and fueling stations, property leases relating to our office spaces, and leases for equipment. (4) Represent estimated commitment relating to our long-term, quarterly natural gas purchase contracts with a take-or-pay commitment.
We recognize revenue on various products and services. 44 Table of Contents Our volume-related product revenue consists of sales of RNG and conventional natural gas, in the form of CNG and LNG, AFTC incentives, and sales of RINs and LCFS Credits in addition to Amazon Warrant Charges and changes in fair value of our derivative instruments.
Our volume-related product revenue consists of sales of RNG and conventional natural gas, in the form of CNG and LNG, AFTC incentives, and sales of RINs and LCFS Credits in addition to Amazon Warrant Charges (as defined in Note 13) and changes in fair value of our derivative instruments.
Cash Flows Operating Activities. Cash provided by operating activities was $66.7 million in 2022, compared to cash provided by operating activities of $41.3 million in 2021.
Cash Flows Operating Activities. Cash provided by operating activities was $43.8 million in 2023, compared to cash provided by operating activities of $66.7 million in 2022.
We also have indebtedness, including the amount representing interest, from our operating leases of approximately $84.0 million as of December 31, 2022, of which approximately $8.1 million, $8.1 million, $8.1 million, $8.0 million, $7.9 million and $43.8 million is expected to become due in 2023, 2024, 2025, 2026, 2027 and thereafter, respectively.
We also have indebtedness, including the amount representing interest, from our operating leases of approximately $151.5 million as of December 31, 2023, of which approximately $15.1 million, $15.4 million, $15.4 million, $15.4 million, $14.5 million and $75.7 million are expected to become due in 2024, 2025, 2026, 2027, 2028 and thereafter, respectively.
For more information, see “Risk Factors” in Part I, Item 1A of this report. As of December 31, 2022, the majority of our debt outstanding represents a long-term loan bearing variable rates of interest. Changes in market interest rates will affect the interest expense incurred from this outstanding long-term debt instrument, increasing or decreasing our interest expense in future periods.
For more information, see “Risk Factors” in Part I, Item 1A of this report. As of December 31, 2023, the majority of our debt outstanding represents a long-term loan bearing a fixed rate of interest. Changes in market interest rates do not affect the interest expense incurred from this outstanding long-term debt 35 Table of Contents instrument.
See “Results of Operations” below for more information about our performance in 2021 and 2022. Volume. The amount of RNG and conventional natural gas, in the form of CNG and LNG, that we sold increased by 8.9% from 2021 to 2022 primarily due to the effect of COVID-19 restrictions being lifted and an increase in economic activities and travel generally.
See “Results of Operations” below for more information about our performance in 2022 and 2023. Fuel Volume. The amount of RNG and conventional natural gas, in the form of CNG and LNG, that we sold increased by 7.6% from 2022 to 2023 primarily due to an increase in economic activities and travel generally and growth in our key customer markets.
Key Trends Market for RNG and conventional natural gas as a Vehicle Fuel According to CARB, RNG and conventional natural gas are cleaner than gasoline and diesel fuel based on the GHG emissions produced by vehicles operated by these fuels.
As of December 31, 2023, we were in compliance with all of these covenants. 39 Table of Contents Key Trends Market for RNG and conventional natural gas as a Vehicle Fuel According to CARB, RNG and conventional natural gas are cleaner than gasoline and diesel fuel based on the GHG emissions produced by vehicles operated by these fuels.
(5) Includes an unrealized gain (loss) from the change in fair value of commodity swap and customer fueling contracts of $2.1 million, $(3.5) million and $0.5 million for the years ended December 31, 2020, 2021 and 2022, respectively.
(5) Includes an unrealized gain (loss) from the change in fair value of commodity swap and customer fueling contracts of $(3.5) million, $0.5 million and $(0.2) million for the years ended December 31, 2021, 2022 and 2023, respectively. See Note 7 for more information regarding the commodity swap and customer contracts. 2022 – 2023 Key Developments TotalEnergies Joint Venture.
Cash used in investing activities was $148.5 million in 2022, compared to cash used in investing activities of $207.7 million in 2021.
Cash used in investing activities was $202.0 million in 2023, compared to cash used in investing activities of $148.5 million in 2022.
Impact of COVID-19, Inflation, Labor Shortage, Material Availability and Interest Rate The COVID-19 pandemic had an adverse effect on the volume of our sales, which we saw bottom in the second quarter of 2020.
Impact of COVID-19, Inflation, Labor Shortage, Material Availability and Interest Rate The COVID-19 pandemic had an adverse effect on the volume of our sales, which we saw bottom in the second quarter of 2020. The subsequent surge in cases driven by the omicron variant negatively affected the demand recovery for our vehicle fuels in the first quarter of 2022.
Sources of Cash Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, including, if available, AFTC and other government credits, grants and incentives, cash provided by financing activities, and sales of assets. In August 2022, AFTC was reinstated and extended and applies retroactively to vehicle fuel sales made beginning January 1, 2022.
Sources of Cash Historically, our principal sources of liquidity have consisted of cash on hand, cash provided by our operations, including, if available, AFTC and other government credits, grants and incentives, cash provided by financing activities, and sales of assets.
(3) (4) (5) $ (9.9) $ (93.1) $ (58.7) (1) All RNG and conventional natural gas sold were sourced from third-party suppliers. (2) GGEs are calculated based on the conversion rate of one MMBTU equaling eight GGEs.
(3) (4) (5) $ (93.1) $ (58.7) $ (99.5) (1) RNG is procured from third-party sources and from the DR JV, one of our jointly owned RNG production facilities (see Note 4), and conventional natural gas is sourced from third-party suppliers. (2) GGEs are calculated based on the conversion rate of one MMBTU equaling eight GGEs.
Moreover, we may use our cash resources faster than we predict due to unexpected expenditures, the direct and indirect impacts of the COVID-19 pandemic, or higher-than-expected expenses, in which case we may need to seek capital from alternative sources sooner than we anticipate.
Moreover, we may use our cash resources faster than we predict due to unexpected expenditures or higher-than-expected expenses due to unfavorable macroeconomic events, including inflationary pressures or otherwise, in which case we may need to seek capital from alternative sources sooner than we anticipate.
Any inability to raise necessary capital may impair our ability 51 Table of Contents to develop and maintain fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to support and build our business and generate sustained or increased revenue.
Any inability to raise necessary capital may impair our ability to develop and maintain fueling infrastructure, invest in strategic transactions or acquisitions or repay our outstanding indebtedness and may reduce our ability to support and build our business and generate sustained or increased revenue. 49 Table of Contents Material Cash Requirements The table below presents our material cash requirements, including the scheduled maturities of our contractual obligations and our commitments for capital expenditures as of December 31, 2023.
We also expect the lower GHG emissions associated with our RNG vehicle fuel will result in increased demand for this fuel, resulting in our continued delivery of increasing volumes of RNG to our vehicle fleet customers.
We also expect the lower GHG emissions associated with our RNG vehicle fuel will result in increased demand for this fuel, resulting in our continued delivery of increasing volumes of RNG to our vehicle fleet customers. Additionally, we anticipate that, over time, cities and communities in the U.S. and Canada will follow large cities in Europe in banning diesel vehicles.
Loss from equity method investments increased by $4.4 million to $4.8 million in 2022, from $0.4 million in 2021, primarily due to the operating results of SAFE&CEC S.r.l. and our joint venture(s) with TotalEnergies and bp. Gain from sale of certain assets of subsidiary.
Loss from equity method investments increased by $7.7 million to $12.5 million in 2023 from $4.8 million in 2022, due to the operating results of SAFE&CEC S.r.l. and our joint venture(s) with TotalEnergies and bp, and our other equity method investees. Income tax (expense) benefit.
No liability has been recorded in connection with our surety bonds because, based on historical experience and available information, we do not believe it is probable that any amounts will be required to be paid under these arrangements for which we will not be reimbursed.
No liability has been recorded in connection with our surety bonds because, based on historical experience and available information, we do not believe it is probable that any amounts will be required to be paid under these arrangements for which we will not be reimbursed. 50 Table of Contents As of December 31, 2023, we had quarterly fixed-price natural gas purchase contracts with take-or-pay commitments extending through September 2024.
See the discussion about these statements under “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this report. 34 Table of Contents Overview We are North America’s leading provider of the cleanest fuel for the transportation market, based on the number of stations operated and the amount of gasoline gallon equivalents (“GGEs”) of renewable natural gas (“RNG”) and conventional natural gas sold.
Overview We are North America’s leading provider of the cleanest fuel for the transportation market, based on the number of stations operated and the amount of gasoline gallon equivalents (“GGEs”) of renewable natural gas (“RNG”) and conventional natural gas sold.
For example, in 2022, market prices for RINs have been as high as $3.56 and as low as $2.47.
For example, in 2023, market prices for RINs have been as high as $3.55 and as low as $1.88.
For the year ended December 31, 2022, we recognized $21.8 million in AFTC revenue, and, as of December 31, 2022, excluding current portion of restricted cash, we had total cash and cash equivalents and short-term investments of $263.5 million, compared to $229.2 million as of December 31, 2021.
As of December 31, 2023, excluding current portion of restricted cash, we had total cash and cash equivalents and short-term investments of $263.1 million, compared to $263.5 million as of December 31, 2022.
Additionally, effects stemming from the COVID-19 pandemic have caused disruptions in labor supply and in supply chains, leading to shortages of certain materials and equipment and higher labor costs. The future duration and extent of these pressures and effects are difficult to predict.
In recent periods, we have experienced increases in commodity and supply chain costs due to inflationary pressures. Additionally, effects stemming from the COVID-19 pandemic have caused disruptions in labor supply and in supply chains, leading to shortages of certain materials and equipment and higher labor costs that have continued to linger to some extent.
Concurrently, the irrevocable standby letter of credit issued to Berkshire Bank in connection with the second amendment to the Berkshire ALA was cancelled. As a result, we deposited $2.0 million, in the form of a certificate of deposit, at Plains that serves as a security collateral for the standby letter of credit issued to Chevron.
As a result, we deposited $2.0 million, in the form of a certificate of deposit, at PlainsCapital Bank (“Plains”) that serves as a security collateral for the standby letter of credit issued to Chevron Products Company, a division of Chevron U.S.A. Inc.
On January 31, 2022, Plains issued an irrevocable standby letter of credit on behalf of the Company to Berkshire Bank for $7.0 million as collateral under the second amendment to the Berkshire ALA. However, pursuant to the Riverstone Credit Agreement, on December 22, 2022, the Plains LSA was terminated.
Pursuant to the Riverstone Credit Agreement, on December 22, 2022, the Plains LSA was terminated. Concurrently, the irrevocable standby letter of credit issued to Berkshire Bank in connection with the second amendment to the Berkshire ALA was cancelled.
This table excludes certain potential cash requirements because they may involve future cash payments that are considered uncertain and cannot be estimated because they vary based upon future conditions; however, the exclusion of these obligations should not be construed as an implication that they are immaterial, as they could significantly affect our short- and long-term liquidity and capital resource needs depending on a variety of future events, facts and conditions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ More than Contractual Obligations: (in thousands) Total 1 year 1 - 3 years 3 - 5 years 5 years Long-term debt (1) ​ $ 216,117 ​ $ 16,702 ​ $ 33,262 ​ $ 166,153 ​ $ — Finance lease obligations (2) ​ ​ 3,349 ​ ​ 1,095 ​ 2,124 ​ 130 ​ — Operating lease commitments (3) ​ 84,119 ​ 8,129 ​ ​ 16,275 ​ ​ 15,882 ​ ​ 43,833 Long-term take-or-pay contracts (4) ​ 5,178 ​ 3,223 ​ 1,955 ​ — ​ — Construction contracts (5) ​ 69,801 ​ 69,801 ​ — ​ — ​ — Capital expenditure for RNG project (6) ​ ​ 22,237 ​ ​ 22,237 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ $ 400,801 ​ $ 121,187 ​ $ 53,616 ​ $ 182,165 ​ $ 43,833 (1) Consists of long-term debt, including future interest payments, to finance acquisitions, equipment purchases and development of RNG production projects.
This table excludes certain potential cash requirements because they may involve future cash payments that are considered uncertain and cannot be estimated because they vary based upon future conditions; however, the exclusion of these obligations should not be construed as an implication that they are immaterial, as they could significantly affect our short- and long-term liquidity and capital resource needs depending on a variety of future events, facts and conditions. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments Due by Period ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ More than Contractual Obligations: (in thousands) Total 1 year 1 - 3 years 3 - 5 years 5 years Long-term debt (1) ​ $ 472,380 ​ $ 29,045 ​ $ 57,932 ​ $ 58,012 ​ $ 327,391 Finance lease obligations (2) ​ ​ 4,009 ​ ​ 1,979 ​ 1,665 ​ 365 ​ — Operating lease commitments (3) ​ 151,543 ​ 15,125 ​ ​ 30,769 ​ ​ 29,890 ​ ​ 75,759 Long-term take-or-pay contracts (4) ​ 13,227 ​ 13,227 ​ — ​ — ​ — Construction contracts (5) ​ 35,949 ​ 35,949 ​ — ​ — ​ — Capital expenditure for RNG project (6) ​ ​ 2,572 ​ ​ 2,572 ​ ​ — ​ ​ — ​ ​ — Total ​ $ 679,680 ​ $ 97,897 ​ $ 90,366 ​ $ 88,267 ​ $ 403,150 (1) Represents long-term debt, including future interest payments, to finance acquisitions, equipment purchases and development of RNG production projects.
The increase was primarily due to an increase in GGEs of fuel sold, an increase in natural gas prices, and a $4.4 million increase in the cost of station construction activities. 48 Table of Contents Service cost of sales.
The increase was primarily due to an increase in average prices of natural gas driven in-part by the significant rise in cost of natural gas in California during 46 Table of Contents January and February 2023, an increase in GGEs of fuel sold, and a $5.1 million increase in the cost of station construction due to increased construction activities.
Under the extension period, AFTC incentive remains at $0.50 per GGE of CNG and $0.50 per diesel gallon of LNG that we sell as vehicle fuel through 2024. ​ Riverstone Credit Partners .
The IRA reinstated and extended the AFTC incentive for three years through December 31, 2024, beginning retroactively to January 1, 2022. Under the extension period, AFTC incentive remains at $0.50 per GGE of CNG and $0.50 per diesel gallon of LNG that we sell as vehicle fuel through 2024. Fueling Station Equipment Removal .
(5) Consist of our obligations to fund various fueling station construction projects, net of amounts funded through December 31, 2022 and excluding contractual commitments related to station sales contracts. (6) Represents our capital expenditure commitment to fund the development and construction of an ADG RNG project, net of amounts funded through December 31, 2022.
The amount presented is net of amounts funded through December 31, 2023 and excludes contractual commitments relating to station sales contracts. (6) Represents our capital expenditure commitment to fund the development and construction of ADG RNG projects, net of amounts funded through December 31, 2023. The project is expected to be substantially complete in the second quarter of 2025.
The noncontrolling interest in NG Advantage represents a 6.7% minority interest that was held by third parties during both the 2022 and 2021 periods. Seasonality and Inflation To some extent, we experience seasonality in our results of operations.
In 2023 and 2022, we recorded a gain of $0.6 million and $0.9 million, respectively, for the noncontrolling interest in the net loss of NG Advantage. The noncontrolling interest in NG Advantage represents a 6.7% minority interest that was held by third parties during both the 2023 and 2022 periods.
Further, in 2023, we anticipate 50 Table of Contents deploying up to approximately $40.0 million to develop ADG RNG production facilities. In 2022, we contributed $89.7 million to the bpJV. As of December 31, 2022, we have contributed $178.0 million into developing ADG RNG production facilities.
Further, in 2024, we anticipate 48 Table of Contents deploying up to approximately $100.0 million to develop ADG RNG production facilities. As of December 31, 2023, we have invested $273.1 million in the development of ADG RNG production facilities, which includes $238.1 million contributed to our joint ventures.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+1 added−2 removed5 unchanged
Biggest changeIf the exchange rates on these assets and liabilities were to fluctuate by 10% from the rates as of December 31, 2022, we would expect a corresponding fluctuation in the value of the assets and liabilities of approximately $0.1 million, net. 53 Table of Contents Interest Rate Risk As of December 31, 2022, we had $150.0 million of debt that bears interest at a rate equal to either adjusted Term SOFR, the Federal Funds Effective Rate, or the Prime Rate plus a margin per annum.
Biggest changeIf the exchange rates on these assets and liabilities were to fluctuate by 10% from the rates as of December 31, 2023, we would expect a corresponding fluctuation in the value of the net assets to be immaterial. Interest Rate Risk As of December 31, 2023, we had no debt that bears a variable rate of interest.
In October 2018, in support of our Zero Now truck financing program, we entered into two commodity swap contracts with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies and THUSA, for a total of five million diesel gallons annually from April 1, 2019 to June 30, 2024.
In October 2018, in support of our Zero Now truck financing program, we entered into two commodity swap contracts with TotalEnergies Gas & Power North America, an affiliate of TotalEnergies, for a total of five million diesel gallons annually from April 1, 2019 to June 30, 2024.
Foreign Currency Exchange Rate Risk For the year ended December 31, 2022, our primary exposure to foreign currency exchange rates relates to our Canadian operations that had certain outstanding accounts receivable and accounts payable denominated in Canadian dollar, which were not hedged.
Foreign Currency Exchange Rate Risk For the year ended December 31, 2023, our primary exposure to foreign currency exchange rates relates to our Canadian operations that had certain outstanding accounts receivable and accounts payable denominated in Canadian dollar, which were not hedged.
We have prepared a sensitivity analysis to estimate our exposure to price risk with respect to our commodity swap contracts. If the diesel-to-natural gas price spread were to fluctuate by 10% as of December 31, 2022, we would expect a corresponding fluctuation in the fair value of our commodity swap contracts of approximately $1.1 million.
We have prepared a sensitivity analysis to estimate our exposure to price risk with respect to our commodity swap contracts. If the diesel-to-natural gas price spread were to fluctuate by 10% as of December 31, 2023, we would expect a corresponding fluctuation in the fair value of our commodity swap contracts of approximately $0.1 million.
Natural gas prices and availability are affected by many factors, including, among others, drilling activity, supply, weather conditions, overall economic conditions and foreign and domestic government regulations. Natural gas costs represented $74.6 million, $111.8 million, and $182.4 million of our cost of sales in 2020, 2021, and 2022, respectively.
Natural gas prices and availability are affected by many factors, including, among others, drilling activity, supply, weather conditions, overall economic conditions and foreign and domestic government regulations. Natural gas costs represented $111.8 million, $182.4 million, and $190.6 million of our cost of sales in 2021, 2022, and 2023, respectively.
If our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt, which could adversely affect our interest expense, results of operations and cash flows. ​ 54 Table of Contents
However, if our lenders have increased costs due to changes in LIBOR, we may experience potential increases in interest rates on our variable rate debt or fees on our fixed rate debt, which could adversely affect our interest expense, results of operations and cash flows. ​ 51 Table of Contents
We intend to monitor the developments with respect to the discontinuance of LIBOR and work with our lenders to minimize the effect of such a discontinuance on our financial condition and results of operations; however, the effect of the anticipated discontinuance of LIBOR on us and our debt instruments remains uncertain.
Certain LIBOR tenors were discontinued after 2021 with other LIBOR tenors discontinued after June 2023. We intend to monitor the developments with respect to the discontinuance of LIBOR and work with our lenders to minimize the effect of such a discontinuance on our financial condition and results of operations.
Removed
Thus, depending on our interest rate election during the period, our interest expense would fluctuate with a change in Term SOFR, the Federal Funds Effective Rate or the Prime Rate. If these rates were to increase or decrease by 1% for the year, the impact on our annual interest expense would be approximately $1.5 million.
Added
To date, the effect of the discontinuance of LIBOR on us and on our debt instruments has not been material.
Removed
Certain LIBOR tenors were discontinued after 2021 with other LIBOR tenors to be discontinued after June 2023.

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