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What changed in OPAL Fuels Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OPAL Fuels Inc.'s 2023 and 2024 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 2024 report.

+340 added−352 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-15)

Top changes in OPAL Fuels Inc.'s 2024 10-K

340 paragraphs added · 352 removed · 257 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

71 edited+3 added−28 removed132 unchanged
Biggest changeBelow is a table setting forth the RNG projects in operation and construction in our portfolio: 9 OPAL's Share of Design Capacity (MMbtus per year) (1) Source of Biogas Ownership Expected Commercial Operation Date (5) RNG Projects in Operation: Greentree 1,061,712 LFG 100% N/A Imperial 1,061,712 LFG 100% N/A Emerald (2) (3) 1,327,140 LFG 50% N/A New River 663,570 LFG 100% N/A Noble Road (2) 464,499 LFG 50% N/A Pine Bend (2) 424,685 LFG 50% N/A Biotown (2) 48,573 Dairy 10% N/A Sunoma (4) 192,350 Dairy 90% N/A Total 5,244,241 RNG Projects in Construction: Prince William 1,725,282 LFG 100% First quarter 2024 Hilltop (6) 255,500 Dairy 100% Not Determined Vander Schaaf (6) 255,500 Dairy 100% Not Determined Polk County 1,060,000 LFG 100% Fourth quarter 2024 Sapphire (2) 796,284 LFG 50% Third quarter 2024 Atlantic (2) 331,785 LFG 50% Mid 2025 Total 4,424,351 (1) Reflects the Company’s ownership share of design capacity for projects that are not 100% owned by the Company (i.e., net of joint venture partners’ ownership).
Biggest changeBelow is a table setting forth the RNG projects in operation and construction in our portfolio: OPAL's Share of Design Capacity (MMbtus per year) (1) Source of Biogas Ownership Expected Commercial Operation Date (4) RNG Projects in Operation: Greentree 1,061,712 LFG 100% N/A Imperial 1,061,712 LFG 100% N/A Emerald (2) 1,327,140 LFG 50% N/A Sapphire (2) 796,284 LFG 50% N/A New River 663,570 LFG 100% N/A Noble Road (2) 464,499 LFG 50% N/A Pine Bend (2) 424,685 LFG 50% N/A Biotown (2) 43,750 Dairy 10% N/A Sunoma (3) 176,297 Dairy 90% N/A Prince William 1,725,282 LFG 100% N/A Polk County (7) 1,060,000 LFG 100% N/A Total 8,804,931 RNG Projects in Construction: Hilltop (5) 255,500 Dairy 100% (5) Vander Schaaf (5) 255,500 Dairy 100% (5) Burlington (6) 459,900 LFG 50% (6) Atlantic (2) 331,785 LFG 50% Third quarter 2025 Cottonwood (6) 664,884 LFG 100% (6) Kirby Canyon (6) 663,570 LFG 100% (6) Total 2,631,139 (1) Reflects the Company’s ownership share of design capacity for projects that are not 100% owned by the Company (i.e., net of joint venture partners’ ownership).
Specifically, we intend to diversify our project portfolio beyond landfill biogas through the expansion into additional methane producing assets. 3 • Empowering our customers to achieve their sustainability and carbon reduction objectives: We are well positioned to empower our customers to achieve their sustainability and carbon reduction goals, by, for example, reducing GHG emissions from their commercial transportation activities, at a cost to customers that is competitive to other fuels like diesel.
Specifically, we intend to diversify our project portfolio beyond landfill biogas through the expansion into additional methane producing assets. • Empowering our customers to achieve their sustainability and carbon reduction objectives: We are well positioned to empower our customers to achieve their sustainability and carbon reduction goals, by, for example, reducing GHG emissions from their commercial transportation activities, at a cost to customers that is competitive to other fuels, like diesel.
With respect to all of our existing or proposed LFG-to-RNG Biogas Conversion Projects currently in operation or under construction (a total of 14 projects), all but one relates to landfills that are currently open and accepting more waste, which we believe 7 provides a high degree of visibility into the long-term volumes of RNG capable of being generated at each of these projects.
With respect to all of our existing or proposed LFG-to-RNG Biogas Conversion Projects currently in operation or under construction (a total of 14 projects), all but one relates to landfills that are currently open and accepting more waste, which we believe provides a high degree of visibility into the long-term volumes of RNG capable of being generated at each of these projects.
RNG is chemically identical to the natural gas used for cooking, heating homes and fueling natural gas engines, with one significant difference: RNG is produced by recycling harmful methane emissions created by decaying organic waste as opposed to natural gas which is a fossil fuel pumped from the ground. We have participated in the biogas-to-energy industry for over 20 years.
RNG is chemically identical to the natural gas used for cooking, heating homes and fueling natural gas engines, with one significant difference: RNG is produced by recycling methane emissions created by decaying organic waste as opposed to natural gas which is a fossil fuel pumped from the ground. We have participated in the biogas-to-energy industry for over 20 years.
EPACT 2005’s market conduct, penalty and enforcement provisions also apply to fraud and certain other misconduct in the natural gas sector. Qualifying Facilities The Public Utility Regulatory Policies Act established a class of generating facilities that would receive special rate and regulatory treatment, termed QFs. There are two categories of QFs: qualifying small power production facilities and qualifying cogeneration facilities.
EPACT 2005’s market conduct, penalty and enforcement provisions also apply to fraud and certain other misconduct in the natural gas sector. Qualifying Facilities The Public Utility Regulatory Policies Act established a class of generating facilities that would receive special rate and regulatory treatment ("QFs"). There are two categories of QFs: qualifying small power production facilities and qualifying cogeneration facilities.
The Company identifies suitable RNG conversion candidates based on highest return of capital which is driven by certain factors including, but not limited to (i) the quantity and quality of LFG, (ii) the proximity to pipeline interconnect and (iii) the ability to enter into contracts, including site leases and gas rights agreements, with host sites.
The Company identifies suitable RNG conversion candidates based on highest return of capital which is driven by certain factors including, but not limited to (i) the quantity and quality of LFG, (ii) the proximity to pipeline interconnect and (iii) 9 the ability to enter into contracts, including site leases and gas rights agreements, with host sites.
In 2005, the U.S. federal government enacted the EPACT 2005 conferring new authority for FERC to act to limit wholesale market power if required and strengthening FERC’s civil penalty authority (including the power to assess 13 fines of up to $1.3 million per day per violation, as adjusted due to inflation), and adding certain disclosure requirements.
In 2005, the U.S. federal government enacted the EPACT 2005 conferring new authority for FERC to act to limit wholesale market power if required and strengthening FERC’s civil penalty authority (including the power to assess fines of up to $1.3 million per day per violation, as adjusted due to inflation), and adding certain disclosure requirements.
This is an important factor that enables OPAL to design, develop and operate RNG projects to generate value from production of RNG and the associated Environmental Attributes (i.e., RINs and LCFS credits) throughout the United States and exported to international markets. Overview of Livestock Sources Livestock are the top agricultural source of GHG worldwide, according to the EPA.
This is an important factor that enables OPAL to design, develop and operate RNG projects to generate value from production of RNG and the associated Environmental Attributes (i.e., RINs and LCFS credits) throughout the United States and exported to international markets. Overview of Livestock Sources Livestock is the top agricultural source of GHG worldwide, according to the EPA.
“Obligated Parties” means refiners or importers of gasoline or diesel fuel under the RFS program. 18 “QFs” refers to qualifying small power production facilities under the Federal Power Act and the Public Utility Regulatory Policies Act of 1978, as amended “RECs” refers to renewable energy credits. "ISCC Carbon Credits" refers to Environmental Attributes associated with renewable biomethane.
“Obligated Parties” means refiners or importers of gasoline or diesel fuel under the RFS program. “QFs” refers to qualifying small power production facilities under the Federal Power Act and the Public Utility Regulatory Policies Act of 1978, as amended “RECs” refers to renewable energy credits. "ISCC Carbon Credits" refers to Environmental Attributes associated with renewable biomethane.
We actively seek to extend the term of our contracts at project sites and views our positive relationships with the owners and managers of host landfills and dairy farms as a contributing factor to our ability to extend contract terms as they come due. Large and Diverse Project Portfolio We have a large, technologically optimized Biogas Conversion Project portfolio.
We actively seek to extend the term of our contracts at project sites and views our 3 positive relationships with the owners and managers of host landfills and dairy farms as a contributing factor to our ability to extend contract terms as they come due. Large and Diverse Project Portfolio We have a large, technologically optimized Biogas Conversion Project portfolio.
Dispensing and Monetization Business We are a leading provider of RNG marketing and dispensing in the alternative vehicle fuels market for heavy and medium-duty trucking fleets throughout the United States. In this sector, we focus on dispensing RNG through Fueling Stations that serve fleets that use natural gas instead of diesel fuel.
Dispensing and Monetization Business 4 We are a leading provider of RNG marketing and dispensing in the alternative vehicle fuels market for heavy and medium-duty trucking fleets throughout the United States. In this sector, we focus on dispensing RNG through Fueling Stations that serve fleets that use natural gas instead of diesel fuel.
Our services office and maintenance facility is located in Oronoco, Minnesota, where we own and occupy a 20,000 square foot building of combined office space, maintenance shop and loading dock located on 3.25 acres. The 15 building was acquired in September 2018 and is adequate for our needs for the immediate future.
Our services office and maintenance facility is located in Oronoco, Minnesota, where we own and occupy a 20,000 square foot building of combined office space, maintenance shop and loading dock located on 3.25 acres. The building was acquired in September 2018 and is adequate for our needs for the immediate future.
In addition, we also generate revenues by providing operations and maintenance services for customer stations; and by helping our customers obtain federal, state and local tax credits, grants and incentives. Biogas Conversion Projects 6 Typically, a Biogas Conversion Project includes two phases: (i) biogas collection, and (ii) processing and purifying biogas.
In addition, we also generate revenues by providing operations and maintenance services for customer stations; and by helping our customers obtain federal, state and local tax credits, grants and incentives. Biogas Conversion Projects Typically, a Biogas Conversion Project includes two phases: (i) biogas collection, and (ii) processing and purifying biogas.
The local distribution of gas to end-use customers by a state-regulated gas utility is also typically outside the scope of FERC’s gas regulatory jurisdiction. The opening and operation of a landfill or dairy farm that is expected to produce gas does not ordinarily require a FERC certificate or the acceptance by FERC of a gas tariff.
The local distribution of gas to end-use customers by a state-regulated gas utility is also typically outside the scope of FERC’s gas regulatory jurisdiction. The opening and operation of 12 a landfill or dairy farm that is expected to produce gas does not ordinarily require a FERC certificate or the acceptance by FERC of a gas tariff.
In March 2022, we entered into an amendment to the lease which extended the lease term to January 2026. We believe the space that we currently lease is adequate for our needs for the immediate future but we may seek additional space to accommodate future growth, which we believe will be available to us on satisfactory terms.
In March 2022, we entered into an amendment to the lease which extended the lease term to January 2026. We believe the space that we 13 currently lease is adequate for our needs for the immediate future but we may seek additional space to accommodate future growth, which we believe will be available to us on satisfactory terms.
Additionally, revenues generated from dispensing RNG produced from livestock farms can be significantly higher than dispensing revenue from RNG produced from landfills due to state-level low-carbon fuel incentives for these projects. We view dairy farms as a significant opportunity for us to expand our RNG business.
Additionally, revenues generated from dispensing RNG 6 produced from livestock farms can be significantly higher than dispensing revenue from RNG produced from landfills due to state-level low-carbon fuel incentives for these projects. We view dairy farms as a significant opportunity for us to expand our RNG business.
We generate RINs when RNG is dispensed into vehicles as transportation fuel, and the RINs can then be sold to, and traded with, market participants who can either retire them or trade them again. By using the RINs, Obligated Parties 8 retire the RINs for compliance purposes.
We generate RINs when RNG is dispensed into vehicles as transportation fuel, and the RINs can then be sold to, and traded with, market participants who can either retire them or trade them again. By using the RINs, Obligated Parties retire the RINs for compliance purposes.
System operators monitor parameters to maximize system efficiency. Using biogas in a Renewable Power facility usually requires some treatment of the landfill gas to remove excess moisture, particulates, and other impurities. The type and extent of treatment depends on site-specific biogas characteristics and the type of Renewable Power facility.
System operators monitor parameters to maximize system efficiency. Using biogas in a Renewable Power facility usually requires some treatment of the landfill gas to remove excess moisture, particulates, and other impurities. The type and extent of treatment depends on site-specific 5 biogas characteristics and the type of Renewable Power facility.
The CAA and state and local laws and regulations impose significant monitoring, testing, recordkeeping and 12 reporting requirements for these emissions. Requirements vary for control of these emissions, depending on local air quality. Applicability of the NSR permitting requirements will depend on the level of emissions resulting from the technology used and the project’s location.
The CAA and state and local laws and regulations impose significant monitoring, testing, recordkeeping and reporting requirements for these emissions. Requirements vary for control of these emissions, depending on local air quality. Applicability of the NSR permitting requirements will depend on the level of emissions resulting from the technology used and the project’s location.
We also assist our customers in their transition to cleaner transportation fuels by helping them obtain federal, state and local tax credits, grants and incentives, vehicle financing, and facilitating customer selection of vehicle specifications to meet their needs.
We also assist our customers in their transition to cleaner transportation 2 fuels by helping them obtain federal, state and local tax credits, grants and incentives, vehicle financing, and facilitating customer selection of vehicle specifications to meet their needs.
We exercise financial discipline in pursuing these projects by targeting project returns that are in line with the relative risk of the specific projects. 5 Our current Biogas Conversion Projects generate RNG from landfill sites and dairy farms.
We exercise financial discipline in pursuing these projects by targeting project returns that are in line with the relative risk of the specific projects. Our current Biogas Conversion Projects generate RNG from landfill sites and dairy farms.
Future Regulations 14 The regulations that are applicable to our projects vary according to the type of energy being produced and the jurisdiction of the facility. As part of our growth strategy, we are looking to grow by pursuing development and acquisition opportunities.
Future Regulations The regulations that are applicable to our projects vary according to the type of energy being produced and the jurisdiction of the facility. As part of our growth strategy, we are looking to grow by pursuing development and acquisition opportunities.
“Renewable Power” refers to electricity generated from renewable sources. “RFS” refers to the EPA’s Renewable Fuel Standard. “RINs” refers to Renewable Identification Numbers. “RNG” refers to renewable natural gas. “RPS” refers to Renewable Portfolio Standards. “RTOs” refers to regional transmission organizations. “RVOs” refers to renewable volume obligations.
“Renewable Power” refers to electricity generated from renewable sources. “RFS” refers to the EPA’s Renewable Fuel Standard. “RINs” refers to Renewable Identification Numbers. “RNG” refers to renewable natural gas. “RPS” refers to Renewable Portfolio Standards. “RTOs” refers to regional transmission organizations. “RVOs” refers to renewable volume obligations. 16
Our Strategy We aim to maintain and grow our position as a leading producer and dispenser of RNG in the United States and maintain and increase our position as a leading provider of RNG to the heavy and medium-duty commercial vehicle market in the U.S.
Our Strategy We aim to maintain and grow our position as a leading producer and dispenser of RNG in the United States and a leading provider of RNG to the heavy and medium-duty commercial vehicle market in the U.S.
We believe based on (i) our status as one of the largest operators of LFG-to-RNG projects, (ii) our over 20-year track record of operating and developing projects, (iii) our vertically integrated business platform, (iv) our deep relationships with some of the largest landfill owners and (v) our relationships with dairy farms in the country, we are well-positioned to continue to operate and grow our portfolio and respond to competitive pressures.
We believe based on (i) our status as one of the largest operators of LFG-to-RNG projects, (ii) our over 20-year track record of operating and developing projects, (iii) our vertically integrated business platform, (iv) our deep relationships with some of the largest landfill owners and (v) our relationships with dairy producers in the country, we are well-positioned to continue to operate and grow our portfolio and respond to competitive pressures.
Design capacity is measured as the volume of feedstock biogas that the plant is capable of accepting at the inlet for processing and may not reflect actual production of RNG from the projects, which will depend on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual efficiency of the facility.
Design capacity is measured as the volume of feedstock biogas that the plant is capable of accepting at the inlet and processing and may not reflect actual production of RNG from the projects, which will 8 depend on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual efficiency of the facility.
(5) Expected Commercial Operation Date (“COD”) for commencement of the RNG projects in construction is based on the Company’s estimate as of the date of this report. CODs are estimates and are subject to change as a result of, among other factors out of the Company’s control: (i) regulatory/permitting approval timing, (ii) disruption in supply chains and (iii) construction timing.
(4) Expected Commercial Operation Date (“COD”) for commencement of the RNG projects in construction is based on the Company’s estimate as of the date of this report. CODs are estimates and are subject to change as a result of, among other factors out of the Company’s control: (i) regulatory/permitting approval timing, (ii) disruption in supply chains and (iii) construction timing.
Copies of such documents will be provided to stockholders without charge upon written request to the corporate secretary at the address shown on the cover page of this Annual Report on Form 10‑K. 16 Glossary of Terms The following are definitions of terms used in this Form 10-K. “ArcLight” refers to ArcLight Clean Transition Corp.
Copies of such documents will be provided to stockholders without charge upon written request to the corporate secretary at the address shown on the cover page of this Annual Report on Form 10‑K. 14 Glossary of Terms The following are definitions of terms used in this Form 10-K. “ArcLight” refers to ArcLight Clean Transition Corp.
Once we have negotiated gas rights or manure supply agreements, we then design, develop, build, own and operate facilities that convert the biogas into RNG or uses the processed biogas to produce Renewable Power. We sell the RNG produced by the Biogas Conversion Projects through RNG marketing and dispensing agreements and generate associated Environmental Attributes.
Once we have negotiated gas rights or manure supply agreements, we then design, develop, build, own and operate facilities that convert the biogas into RNG or use the processed biogas to produce Renewable Power. We sell the RNG produced by the Biogas Conversion Projects through RNG marketing and dispensing agreements and generate associated Environmental Attributes.
The CAA contains provisions for New Source Review (the “ NSR ”) permits and Title V permits. New Biogas Conversion Projects may be required to obtain construction permits under the NSR program. The combustion of biogas results in emissions of carbon monoxide, oxides of nitrogen, sulfur dioxide, volatile organic compounds and particulate matter.
The CAA contains provisions for New Source Review (the “NSR”) permits and Title V permits. New Biogas Conversion Projects may be required to obtain construction permits under the NSR program. The combustion of biogas results in emissions of carbon monoxide, oxides of nitrogen, sulfur dioxide, volatile organic compounds and particulate matter.
We strive to optimize the economics of capturing biogas from our host landfills and dairy farms for conversion to RNG by balancing the capital and operating costs with the current and future quality and quantity of biogas. • Expanding our industry position as a full-service partner for development opportunities, including through strategic transactions: Throughout our over 20-years of biogas conversion experience, we have developed the full range of biogas conversion project related capabilities from landfill gas collection system expertise, to engineering, construction, management and operations, through EHS oversight and Environmental Attributes management.
We strive to optimize the economics of capturing biogas from our host landfills and dairy farms for conversion to RNG by balancing the capital and operating costs with the current and future quality and quantity of biogas. • Expanding our industry position as a full-service partner for development opportunities, including through strategic transactions: Throughout our over twenty years of biogas conversion experience, we have developed the full range of biogas conversion project related capabilities from landfill gas collection system expertise, to engineering, construction, management and operations, through environmental health and safety ("EHS") oversight and Environmental Attributes management.
We view the acquisition of new landfill gas, dairy farm, and other biogas waste projects as significant opportunities for us to expand our RNG business, complementing the ongoing conversion of certain of our existing Renewable Power plants to RNG production facilities. We believe our business is scalable, which is expected to continue to support growth through development and acquisitions.
We view the acquisition of new landfill gas, dairy farm, and other biogas waste projects as significant opportunities for us to expand our RNG business, complementing the ongoing conversion of certain of our existing Renewable Power plants to RNG production facilities. We believe our business is scalable and will continue to support growth through development and acquisitions.
Based on EPA data, these 470 candidate landfills have the potential to collect a combined 342.9 million standard cubic feet of LFG per day. Based on our industry experience, technical knowledge and analysis we believe many of these sites are potentially economically viable for RNG project acquisitions.
Based on EPA data, these 470 candidate landfills have the potential to collect a combined 343 million standard cubic feet of LFG per day. Based on our industry experience, technical knowledge and analysis we believe many of these sites are potentially economically viable for RNG project acquisitions.
RNG from landfills and livestock waste, among other sources, qualifies as a cellulosic biofuel with a 60% GHG reduction requirement (“ D3 ”) RIN, which is currently the highest priced RIN and commands a premium compared to non-cellulosic renewable fuels such as ethanol and renewable diesel.
RNG from landfills and livestock waste, among other sources, qualifies as a cellulosic biofuel with a 60% GHG reduction requirement (“D3”) RIN, which is currently the highest priced RIN and commands a premium compared to non-cellulosic renewable fuels such as ethanol and renewable diesel.
This partially cleaned biogas can be burned on-site to generate Renewable Power which can be immediately used or deployed into the grid. To further upgrade the gas to pipeline quality RNG, the partially treated biogas then goes through a process that separates CO 2 from the methane molecules.
This partially cleaned biogas can be burned on-site to generate Renewable Power which can be immediately used or deployed into the grid. To further upgrade the gas to pipeline quality RNG, the partially treated biogas then goes through a process that separates carbon dioxide from the methane molecules.
We are subject to a qualification process similar to that for RINs, including verification of CI levels and other requirements that currently exists for LCFS credits in California. The EPA under the Clean Air Act (the “ CAA ”) regulates emissions of pollutants to protect the environment and public health.
We are subject to a qualification process 10 similar to that for RINs, including verification of CI levels and other requirements that currently exists for LCFS credits in California. The EPA under the Clean Air Act (the “CAA”) regulates emissions of pollutants to protect the environment and public health.
However, there is uncertainty related to the applicability of the IRA to our current and planned projects and the scope of the IRA and its interpretations may change if there is a change in the U.S. administration or if government agencies’ authority to interpret federal law is restricted as a result of the Supreme Court’s review of the Chevron doctrine under which federal government agencies have been awarded board authority to interpret broad or ambiguous legislation.
However, there is uncertainty related to the applicability of the IRA to our current and planned projects and the scope of the IRA and its interpretations under the new U.S. administration or if government agencies’ authority to interpret federal law is restricted as a result of the Supreme Court’s review of the Chevron doctrine under which federal government agencies have been awarded broad authority to interpret broad or ambiguous legislation.
ITEM 1. BUSINESS OPAL Fuels Inc. (including its subsidiaries, the “Company”, “OPAL”, “we,” “us” or “our”) is a vertically integrated leader in the capture and conversion of biogas into low carbon intensity renewable natural gas (RNG) and Renewable Power.
ITEM 1. BUSINESS OPAL Fuels Inc. (including its subsidiaries, the “Company,” “OPAL,” “we,” “us” or “our”) is a vertically integrated leader in the capture and conversion of biogas into low carbon intensity renewable natural gas ("RNG") and Renewable Power.
In addition to these projects in operation, we are actively pursuing expansion of our RNG-generating capacity and, accordingly, have a portfolio of RNG projects in construction or in development, with eight of our current Renewable Power Projects being considered candidates for conversion to RNG projects in the foreseeable future.
In addition to these projects in operation, we are actively pursuing expansion of our RNG-generating capacity and, accordingly, have a portfolio of RNG projects in construction as well as a portfolio of projects in development, with six of our current Renewable Power projects being considered candidates for conversion to RNG projects in the foreseeable future.
We also design, develop, construct, operate and service Fueling Stations for trucking fleets across the country that use natural gas to displace diesel as their transportation fuel. We have participated in the alternative vehicle fuels industry for approximately 13 years and have established an expanding network of Fueling Stations for dispensing RNG.
We also design, develop, construct, operate and service Fueling Stations for trucking fleets across the country that use natural gas to displace diesel as their transportation fuel. We have participated in the alternative vehicle fuels industry for over a decade and have established an expanding network of Fueling Stations for dispensing RNG.
“BCA” refers to the Business Combination Agreement dated as of December 2, 2021 (as the same has been or may be amended, modified, supplemented or waived from time to time), by and among ArcLight, OPAL Fuels and OPAL Holdco. “Business Combination” refers to the transaction contemplated by the BCA. “Bylaws” refers to the bylaws of OPAL.
“Business Combination” refers to the transactions contemplated by the Business Combination Agreement dated as of December 2, 2021 (as the same has been or may be amended, modified, supplemented or waived from time to time), by and among ArcLight, OPAL Fuels and OPAL Holdco.
Some of these stations are designed, developed, constructed, operated and maintained by us while others are third party stations where we may only provide maintenance services. “Hillman” refers to Hillman RNG Investments, LLC, a Delaware limited liability company and an affiliate of Fortistar.
Some of these stations are designed, developed, constructed, operated and maintained by us while others are third party stations where we may only provide maintenance services. “Hillman” refers to Hillman RNG Investments, LLC, a Delaware limited liability company and an affiliate of Fortistar. “ Investment Company Act ” refers to the Investment Company Act of 1940 , as amended.
(6) Please see Item 3: Legal Proceedings and Note 17 - Commitments and Contingencies to the financial statements. 10 Renewable Power Projects Below is a table setting forth the Renewable Power projects in operation in our portfolio: Nameplate capacity (MW per hour) (1) Current RNG conversion candidate (2) Renewable Power projects in operation: Sycamore 5.2 Yes Lopez 3.0 — Miramar Energy 3.2 Yes San Marcos 1.8 — Santa Cruz 1.6 — San Diego - Miramar 6.5 Yes West Covina 6.5 — Port Charlotte 2.9 — Taunton 3.6 — Arbor Hills (3) 28.9 N/A C&C 6.3 Yes Albany 5.9 — Concord and CMS 14.4 Yes Pioneer 8.0 — Prince William I (4) 1.9 Yes Prince William II (5) 4.8 Yes Old Dominion 8.0 Yes Total 112.5 Renewable Power projects in construction: Fall River 2.4 — (1) Nameplate capacity is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual productivity of the facility.
Renewable Power Projects Below is a table setting forth the Renewable Power projects in operation in our portfolio: Nameplate capacity (MW per hour) (1) Current RNG conversion candidate (2) Renewable Power projects in operation: Sycamore 5.2 Yes Lopez 3.0 — Miramar Energy 3.2 Yes San Marcos 1.8 — Santa Cruz 1.6 — San Diego - Miramar 6.5 Yes West Covina 6.5 — Port Charlotte 2.9 — Taunton 3.6 — Arbor Hills (3) 28.9 N/A C&C 6.3 Yes Albany 5.9 — Concord and CMS 14.4 Yes Pioneer 8.0 — Richmond (previously "Old Dominion") 8.0 Yes Total 105.8 Renewable Power projects in construction: Fall River (4) 2.4 — (1) Nameplate capacity is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual productivity of the facility.
During 2023, we dispensed 35.3 million gasoline gallon equivalent ("GGEs") of RNG to the transportation market, generating corresponding Environmental Attributes, utilizing our current network of Fueling Stations across the United States.
During 2024, we dispensed 74 million gasoline gallon equivalent ("GGEs") of RNG to the transportation market, generating corresponding Environmental Attributes, utilizing our current network of Fueling Stations across the United States.
Using proven biogas purification technology, biogas can be processed onsite to remove impurities, and used at around 50% methane to generate Renewable Power. Biogas can be further processed and upgraded to remove CO 2 as well as remaining contaminants to increase the methane content and reach pipeline quality specifications, creating RNG.
Using proven biogas purification technology, biogas can be processed on-site to remove impurities, and used at around 50% methane to generate Renewable Power. Biogas can be further processed and upgraded to remove carbon dioxide as well as remaining contaminants to increase the methane content and reach pipeline quality specifications, creating RNG.
Livestock waste, particularly from dairies, produces methane which can be converted to RNG. After being converted to RNG, it can be sold as RNG for consumer, industrial and transportation uses, or further converted to renewable hydrogen.
Livestock waste, particularly from dairies, produces methane that can be converted to RNG and sold as RNG for consumer, industrial and transportation uses, or further converted to renewable hydrogen.
As of that date, our RNG projects in operation had a design capacity of 5.2 million MMBtus per year and our Renewable Power Projects in operation had a nameplate capacity of 112.5 MW per hour.
As of that date, our RNG projects in operation had a design capacity of 8.8 million MMBtus per year and our Renewable Power projects in operation had a nameplate capacity of 105.8 MW per hour.
Before an RNG project can be developed, all the Resource Conservation and Recovery (th e “RCRA”) Subtitle D requirements (requirements for nonhazardous solid waste management) must be satisfied. In particular, methane is explosive in certain concentrations and poses a hazard if it migrates beyond the project boundary. Biogas collection systems must meet RCRA Subtitle D standards for gas control.
Before an RNG project can be developed, all the Resource Conservation and Recovery (th e “ RCRA ”) Subtitle D requirements (requirements for nonhazardous solid waste management) must be satisfied. In particular, methane is explosive in certain concentrations and poses a hazard if it migrates beyond the project boundary.
(5) Prince William II discontinued operations in Q1 2024. 11 Competition 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 and our relative ability to continue to generate revenues and cash flows.
Competition 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 and our relative ability to continue to generate revenues and cash flows.
This comparative advantage creates significant economic incentives for heavy and medium-duty commercial vehicle owners to favor RNG. Our Projects As of December 31, 2023, we owned and operated 25 projects, eight of which are RNG projects and 17 of which are Renewable Power Projects.
This comparative advantage creates significant economic incentives for heavy and medium-duty commercial vehicle owners to favor RNG. Our Projects As of December 31, 2024, we owned and operated 26 projects, 11 of which are RNG projects and 15 of which are Renewable Power projects.
Human Capital As of December 31, 2023, we had approximately 326 full-time employees, all of whom are located in the United States. Our employee work force consists of field operations personnel as well as office-based employees.
Human Capital As of December 31, 2024, we had approximately 1 part-time employee and 341 full-time employees, nearly all of whom are located in the United States. Our employee work force consists of field operations personnel as well as office-based employees.
Typically, new development opportunities come from our existing relationships with landfill owners and dairy developers who value our long operating history and strong reputation in the biogas conversion industry. This includes new projects and referrals from existing partners .
We leverage our relationships built over the past several decades to identify and execute new project opportunities. Typically, new development opportunities come from our existing relationships with landfill owners and dairy developers who value our long operating history and strong reputation in the biogas conversion industry. This includes new projects and referrals from existing partners .
“CNG” refers to compressed natural gas. “CO 2 ” refers to carbon dioxide. “D3” refers to cellulosic biofuel with a 60% GHG reduction requirement. “EHS” refers to environment, health and safety. “EISA” refers to the Energy Independence and Security Act of 2007.
“Btu” refers to British thermal units. 15 “CI” refers to carbon intensity. “CNG” refers to compressed natural gas. “D3” refers to cellulosic biofuel with a 60% GHG reduction requirement. “EHS” refers to environment, health and safety. “EISA” refers to the Energy Independence and Security Act of 2007.
(4) This project has provisions that will adjust or “flip” the percentage of distributions to be made to us over time, typically triggered by achievement of hurdle rates that are calculated as internal rates of return on capital invested in the project.
(2) We record our ownership interests in these projects as equity method investments in our consolidated financial statements. (3) This project has provisions that will adjust or “flip” the percentage of distributions to be made to us over time, typically triggered by achievement of hurdle rates that are calculated as internal rates of return on capital invested in the project.
In addition, we have recently begun implementing design, development, and construction services for hydrogen fueling stations, and we are pursuing opportunities to diversify our sources of biogas to other waste streams. Recent Developments Investment Tax Credits On November 17, 2023, the U.S. Department of Treasury (the, "Treasury") and the U.S.
In addition, we have recently begun implementing design, development, and construction services for hydrogen fueling stations, and we are pursuing opportunities to diversify our sources of biogas to other waste streams.
“Class B Units” refers to the Class B Units as defined in the Second A&R LLC Agreement. “Class C common stock” refers to the shares of Class C common stock, par value $0.0001 per share, of OPAL. “Class D common stock” refers to the shares of Class D common stock, par value $0.0001 per share, of OPAL.
“Class A common stock” refers to the shares of Class A common stock, par value $0.0001 per share, of OPAL. “Class B common stock” refers to the shares of Class B common stock, par value $0.0001 per share, of OPAL. “Class C common stock” refers to the shares of Class C common stock, par value $0.0001 per share, of OPAL.
With respect to its regulation of the transmission of electricity, FERC requires transmission providers to provide open access transmission services, which supports the development of competitive markets by assuring nondiscriminatory access to the transmission grid. FERC has also encouraged the formation of RTOs to allow greater access to transmission services and certain competitive wholesale markets administered by ISOs and RTOs.
With respect to its regulation of the transmission of electricity, FERC requires transmission providers to provide open access transmission services, which supports the development of 11 competitive markets by assuring nondiscriminatory access to the transmission grid.
RNG projects may be subject to other federal, state and local regulations that impose requirements for nonhazardous solid waste management.
Biogas collection systems must meet RCRA Subtitle D standards for gas control. RNG projects may be subject to other federal, state and local regulations that impose requirements for nonhazardous solid waste management.
(3) Although the RNG conversion is completed, it is currently contemplated that the Arbor Hills renewable power plant will continue limited operations on a stand-by, emergency basis through March of 2031. (4) Prince William I renewable power plant discontinued operations in Q1 2024.
(3) Although the RNG conversion is completed, it is currently contemplated that the Arbor Hills Renewable Power plant will continue limited operations on a stand-by, emergency basis through March of 2031. (4) Construction of the Fall River project has been delayed due to permitting issues.
RNG production is projected to triple by 2027, increasing the RNG industry share to as much as 2.5%. Although it is likely that utilities and other consumers will compete with the vehicle fuel market to acquire such RNG, we believe there is adequate potential to continue placing RNG volumes into the transportation market.
Although it is likely that utilities and other consumers will compete with the vehicle fuel market to acquire such RNG, we believe there is adequate potential to continue placing RNG volumes into the transportation market. The legislated D3 RIN requirements are many multiples of current industry production.
“Fortistar” refers to Fortistar LLC, a Delaware limited liability company.
“FASB” refers to the Financial Accounting Standards Board. “Fortistar” refers to Fortistar LLC, a Delaware limited liability company.
II, a blank check company incorporated as a Cayman Islands exempt company, and our previous name prior to the Closing. “Ares” refers to ARCC Beacon LLC, a Delaware limited liability company.
II, a blank check company incorporated as a Cayman Islands exempt company, and our previous name prior to the closing of the Business Combination.
Fuel producers in the transportation fuel pool that have lower CI scores than the target established by CARB generate LCFS credits, and those with higher CI scores than the annual standard will generate deficits. A fuel producer with deficits must have enough LCFS credits through either generation or acquisitions to be in annual compliance with the annual standard.
Fuel producers in the transportation fuel pool that have lower CI scores than the target established by the California Air Resources Board generate LCFS credits, and those with higher CI scores than the annual standard will generate deficits.
“Biogas Conversion Projects” refers to projects derived from the recovery and processing of biogas from landfills and other non-fossil fuel sources, such as livestock and dairy farms, for beneficial use as a replacement to fossil fuels. “Btu” refers to British thermal units. “CARB” refers to the California Air Resources Board. “CI” refers to carbon intensity.
In addition, the following is a glossary of key industry terms used herein: “Biogas Conversion Projects” refers to projects derived from the recovery and processing of biogas from landfills and other non-fossil fuel sources, such as livestock and dairy farms, for beneficial use as a replacement to fossil fuels.
We believe the strong reputation we have attained and our understanding 4 of the various and complex requirements for generating and monetizing Environmental Attributes gives us a competitive advantage relative to new market entrants.
We believe the strong reputation we have attained and our understanding of the various and complex requirements for generating and monetizing Environmental Attributes gives us a competitive advantage relative to new market entrants. We further benefit from our vertical integration by offering dispensing and monetization services to third-party developers, which can lead to project acquisition or partnership opportunities for us.
The legislated D3 RIN requirements are many multiples of current industry production. The EPA sets an RVO each year generally in excess of what the industry is expected to produce but well below the statutory requirement.
The EPA sets an RVO each year generally in excess of what the industry is expected to produce but well below the statutory requirement. The EPA has 7 sharply increased the required volume of the D3 RINs in recent years, with the current D3 RIN RVO level encouraging growth in the industry.
See “ Business — Legal Proceedings. ” Facilities Our corporate headquarters are located in White Plains, New York, where we occupy approximately 13,600 square feet of shared office space with an affiliate of Fortistar pursuant to an Administrative Services Agreement.
Facilities Our corporate headquarters are located in White Plains, New York, where we occupy approximately 13,600 square feet of shared office space with Fortistar pursuant to an Administrative Services Agreement. We believe this office space is adequate for our needs for the immediate future and that, should it be necessary, we can lease additional space to accommodate any future growth.
“Closing” refers to the closing of the Business Combination. “Closing Date” refers to July 21, 2022. “Company”, “we”, “our”, “us” or similar terms refers to OPAL Fuels Inc. individually or on a consolidated basis, as the context may require. “Exchange Act” refers to the Securities Exchange Act of 1934, as amended. “FASB” refers to the Financial Accounting Standards Board.
“Class D common stock” refers to the shares of Class D common stock, par value $0.0001 per share, of OPAL. “Company”, “we”, “our”, “us” or similar terms refers to OPAL Fuels Inc. individually or on a consolidated basis, as the context may require. “Exchange Act” refers to the Securities Exchange Act of 1934, as amended.
“ Investment Company Act ” refers to the Investment Company Act of 1940 , as amended. 17 “Sarbanes-Oxley Act” refers to the Sarbanes-Oxley Act of 2002. “Securities Act” refers to the Securities Act of 1933, as amended. “Sponsor” refers to ArcLight CTC Holdings II, L.P., a Delaware limited partnership.
“Sarbanes-Oxley Act” refers to the Sarbanes-Oxley Act of 2002. “Securities Act” refers to the Securities Act of 1933, as amended.
We are poised to take advantage of these LCFS programs because RNG from dairies has very low or negative CI, and therefore generates valuable credits in states with LCFS programs. Currently, it is estimated that RNG production in the United States can only cover about 1.5% of the U.S. heavy and medium-duty vehicles fuel market.
A fuel producer with deficits must have enough LCFS credits through either generation or acquisitions to be in annual compliance with the annual standard. We are poised to take advantage of these LCFS programs because RNG from dairies has very low or negative CI, and therefore generates valuable credits in states with LCFS programs.
The IRA may increase the competition in our industry and as such increase the demand and cost for labor, equipment and commodities needed for our projects.
The IRA may increase the competition in our industry and as such increase the demand and cost for labor, equipment and commodities needed for our projects. Similarly, recent presidential executive orders directing the review and potential termination of funds appropriated through the IRA are also creating uncertainty of whether these financial incentives could be reduced or repealed in the future.
Removed
Internal Revenue Service (the, "IRS") proposed regulations regarding Investment Tax Credits ("ITCs") on renewable energy projects where the IRS specified certain types of RNG equipment are ineligible for ITCs which could negatively impact the profitability of our RNG business and our ability to finance our RNG projects.
Added
Currently, it is estimated that RNG production in the United States can only cover about 1.5% of the U.S. heavy- and medium-duty vehicles fuel market. RNG production is projected to increase by 2027, bringing the RNG industry share to as much as 2.5%.
Removed
On February 16, 2024, the Treasury and the IRS released a correction to the proposed regulations clarifying that certain of such equipment may be eligible for ITCs. These regulations are merely proposed, and Treasury and the IRS are collecting and reviewing comments received regarding the proposed regulations.
Added
(5) Please see Part I, Item 3: Legal Proceedings and Note 17 - Commitments and Contingencies to the financial statements. (6) The construction of the Cottonwood, Burlington and Kirby Canyon projects began in the second, third and fourth quarters of 2024, respectively. (7) The Polk County project began commercial operations in October 2024.
Removed
The proposed regulations also contain provisions that we believe create uncertainty relating to the ownership, installation or modification of equipment and property on which ITCs can be claimed.
Added
FERC has also encouraged the formation of RTOs to allow greater access to transmission services and certain competitive wholesale markets administered by ISOs and RTOs.
Removed
If the final regulations are enacted in a form that limits, in whole or in part, the amount of ITCs for certain of our construction costs, this would reduce the amount of ITCs available and thus could have a material adverse effect on our operations and our business.
Removed
ATM Program On November 17, 2023, we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with each of B.
Removed
Riley Securities, Inc., Cantor Fitzgerald & Co. and Stifel, Nicolaus & Company, Incorporated (each, an “Agent,” and collectively, the “Agents”) pursuant to which we may issue and sell shares of our Class A common stock having an aggregate offering price of up to $75 million from time to time through the Agents.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAn unexpected reduction in RNG production by third-party producers of RNG with whom we maintain marketing agreements to purchase RNG and/or the associated Environmental Attributes, or their inability or refusal to deliver such RNG or Environmental Attributes as provided under such agreements, may have a material adverse effect on our results of operations and could adversely affect or performance under associated dispensing agreements. 33 The success of our RNG business depends, in large part, on our ability to (i) secure, on acceptable terms, an adequate supply of RNG and/or Environmental Attributes from third-party producers, (ii) sell RNG in sufficient volumes and at prices that are attractive to counterparties and produce acceptable margins for us, and (iii) generate and monetize Environmental Attributes under applicable federal or state programs at favorable prices.
Biggest changeThe success of our RNG business depends, in large part, on our ability to (i) secure, on acceptable terms, an adequate supply of RNG and/or Environmental Attributes from third-party producers, (ii) sell RNG in sufficient volumes and at prices that are attractive to counterparties and produce acceptable margins for us, and (iii) generate and monetize Environmental Attributes under applicable federal or state programs at favorable prices.
Additional factors that may influence the adoption of natural gas vehicle fuels, many of which are beyond our control, include, among others: • lack of demand for trucks that use natural gas vehicle fuels due to business disruptions and depressed oil prices; • adoption of governmental policies or programs or increased publicity or popular sentiment in favor of vehicles or fuels other than natural gas, including long-standing support for gasoline and diesel-powered vehicles, changes to emissions requirements applicable to vehicles powered by gasoline, diesel, natural gas, or other vehicle fuels and/or growing support for electric and hydrogen-powered vehicles; • perceptions about the benefits of natural gas 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; • perceptions about the benefits of natural gas 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; • the 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 counterparties or drivers; • 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 and medium-duty trucks and other fleets; • increasing competition in the market for vehicle fuels generally, and the nature and effect of competitive developments in such market, including improvements in or perceived advantages of other vehicle fuels and engines powered by such fuels; • the availability and effect of environmental, tax or other governmental regulations, programs or incentives that promote our products or other alternatives as a vehicle fuel, including certain programs under which we generate Environmental Attributes 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.
Additional factors that may influence the adoption of natural gas vehicle fuels, many of which are beyond our control, include, among others: 30 • lack of demand for trucks that use natural gas vehicle fuels due to business disruptions and depressed oil prices; • adoption of governmental policies or programs or increased publicity or popular sentiment in favor of vehicles or fuels other than natural gas, including long-standing support for gasoline and diesel-powered vehicles, changes to emissions requirements applicable to vehicles powered by gasoline, diesel, natural gas, or other vehicle fuels and/or growing support for electric and hydrogen-powered vehicles; • perceptions about the benefits of natural gas 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; • perceptions about the benefits of natural gas 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; • the 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 counterparties or drivers; • 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 and medium-duty trucks and other fleets; • increasing competition in the market for vehicle fuels generally, and the nature and effect of competitive developments in such market, including improvements in or perceived advantages of other vehicle fuels and engines powered by such fuels; • the availability and effect of environmental, tax or other governmental regulations, programs or incentives that promote our products or other alternatives as a vehicle fuel, including certain programs under which we generate Environmental Attributes 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.
Our substantial indebtedness and preferred units redemption obligations could have important consequences, including, for example: • being required to accept then-prevailing market terms in connection with any required refinancing of such indebtedness or redemption obligations, which may be less favorable than existing terms; • being required to accept then-prevailing market terms in connection with any required refinancing of such indebtedness or redemption obligations, which may be less favorable than existing terms; • failure to refinance, or to comply with the covenants in the agreements governing, these obligations could result in an event of default under those agreements, which could be difficult to cure or result in our bankruptcy; • our debt service and dividend obligations require us to dedicate a substantial portion of our cash flow to pay principal and interest on our debt and dividends on our preferred units, thereby reducing the funds available to us and our ability to borrow to operate and grow our business; • increase in interest rates on our existing debt facilities or a reduction in the supply of project debt financing could reduce our ability to construct and operate new RNG projects or fueling stations; • our limited financial flexibility could reduce our ability to plan for and react to unexpected opportunities; and • our substantial debt service obligations make us vulnerable to adverse changes in general economic, credit and capital markets, industry and competitive conditions and adverse changes in government regulation and place us at a disadvantage compared with competitors with less debt or mandatory redeemable preferred units.
Our substantial indebtedness and preferred units redemption obligations could have important consequences, including, for example: • being required to accept then-prevailing market terms in connection with any required refinancing of such indebtedness or redemption obligations, which may be less favorable than existing terms; • being required to accept then-prevailing market terms in connection with any required refinancing of such indebtedness or redemption obligations, which may be less favorable than existing terms; • failure to refinance, or to comply with the covenants in the agreements governing, these obligations could result in an event of default under those agreements, which could be difficult to cure or result in our bankruptcy; 43 • our debt service and dividend obligations require us to dedicate a substantial portion of our cash flow to pay principal and interest on our debt and dividends on our preferred units, thereby reducing the funds available to us and our ability to borrow to operate and grow our business; • increase in interest rates on our existing debt facilities or a reduction in the supply of project debt financing could reduce our ability to construct and operate new RNG projects or fueling stations; • our limited financial flexibility could reduce our ability to plan for and react to unexpected opportunities; and • our substantial debt service obligations make us vulnerable to adverse changes in general economic, credit and capital markets, industry and competitive conditions and adverse changes in government regulation and place us at a disadvantage compared with competitors with less debt or mandatory redeemable preferred units.
These provisions, among other things: 49 • authorize our board to issue new series of preferred stock without stockholder approval and create, subject to applicable law, a series of preferred stock with preferential rights to dividends or our assets upon liquidation, or with superior voting rights to the existing shares of common stock; • eliminate the ability of stockholders to call special meetings of stockholders; • eliminate the ability of stockholders to fill vacancies on our board; • establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; • permit our board to establish the number of directors; • provide that our board is expressly authorized to make, alter or repeal the Bylaws; and • limit the jurisdictions in which certain stockholder litigation may be brought.
These provisions, among other things: • authorize our board to issue new series of preferred stock without stockholder approval and create, subject to applicable law, a series of preferred stock with preferential rights to dividends or our assets upon liquidation, or with superior voting rights to the existing shares of common stock; • eliminate the ability of stockholders to call special meetings of stockholders; • eliminate the ability of stockholders to fill vacancies on our board; • establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; • permit our board to establish the number of directors; • provide that our board is expressly authorized to make, alter or repeal our bylaws; and • limit the jurisdictions in which certain stockholder litigation may be brought.
These executive orders (i) direct federal agencies to review and reverse more than one hundred actions taken by the previous US 22 presidential administration on or relating to the environment, (ii) instruct the Director of National Intelligence to prepare a national intelligence estimate on the security implications of the climate crisis and direct all agencies to develop strategies for integrating climate considerations into their international work, (iii) establish the National Climate Task Force, which assembles leaders from across twenty one federal agencies and departments, (iv) commit to environmental justice and new, clean infrastructure projects, (v) commence development of emissions reduction targets and (vi) establish the special presidential envoy for climate on the National Security Council.
These executive orders (i) direct federal agencies to review and reverse more than one hundred actions taken by the previous US presidential administration on or relating to the environment, (ii) instruct the Director of National Intelligence to prepare a national intelligence estimate on the security implications of the climate crisis and direct all agencies to develop strategies for integrating climate considerations into their international work, (iii) establish the National Climate Task Force, which assembles leaders from across twenty one federal agencies and departments, (iv) commit to environmental justice and new, clean infrastructure projects, (v) commence development of emissions reduction targets and (vi) establish the special presidential envoy for climate on the National Security Council.
Moreover, even if such family relationship does not create an actual conflict, the perception of a conflict in the press or the financial or business community generally could create negative publicity or other reaction with respect to the business opportunity or other matters to be decided by us through our board, standing committees thereof, and management, which could adversely affect 47 the business generated by us and our relationships with its existing customers and other counterparties, impact the behavior of third party participants or other persons in the proposed business opportunity or other matter to be decided, otherwise negatively impact our business prospects related to such matter, or negatively impact the trading market for our securities.
Moreover, even if such family relationship does not create an actual conflict, the perception of a conflict in the press or the financial or business community generally could create negative publicity or other reaction with respect to the business opportunity or other matters to be decided by us through our board, standing committees thereof, and management, which could adversely affect the business generated by us and our relationships with its existing customers and other counterparties, impact the behavior of third party participants or other persons in the proposed business opportunity or other matter to be decided, otherwise negatively impact our business prospects related to such matter, or negatively impact the trading market for our securities.
For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the Federal Deposit Insurance Corporation; on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership; the following week, a syndicate of U.S. banks infused $30 billion in First Republic Bank; and later that same week, the Swiss Central Bank provided $54 billion in covered loan and short-term liquidity facilities to Credit Suisse Group AG, all in an attempt to reassure depositors and calm fears of a banking contagion.
For example, on March 10, 2023, Silicon Valley Bank failed and was taken into receivership by the Federal Deposit Insurance Corporation; on March 12, 2023, Signature Bank and 37 Silvergate Capital Corp. were each swept into receivership; the following week, a syndicate of U.S. banks infused $30 billion in First Republic Bank; and later that same week, the Swiss Central Bank provided $54 billion in covered loan and short-term liquidity facilities to Credit Suisse Group AG, all in an attempt to reassure depositors and calm fears of a banking contagion.
Our ability to acquire, convert, develop and operate Biogas Conversion Projects, as well as expand production at current Biogas Conversion Projects, is subject to several additional risks, including: • regulatory changes that affect the value of RNG and the associated Environmental Attributes, which could have a significant effect on the financial performance of our Biogas Conversion Projects and the number of potential Biogas Conversion Projects with attractive economics; • changes in energy commodity prices, such as natural gas and wholesale electricity prices, which could have a significant effect on our revenues and expenses; • changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to third parties or increase the costs of processing RNG to allow for such deliveries; • changes in the broader waste collection industry, including changes affecting the waste collection and biogas potential of the landfill industry, which could limit the LFG resource that we currently target for our Biogas Conversion Projects; • substantial construction risks, including the risk of delay, that may arise due to forces outside of our control, such as those related to engineering and environmental problems, inclement weather, inflationary pressures on materials and labor, and supply chain and labor disruptions; • operating risks and the effect of disruptions on our business, including the effects of global health crises, weather conditions, catastrophic events, such as fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events that impact us, our counterparties, suppliers, distributors and subcontractors; 31 • accidents involving personal injury or the loss of life; • entering into markets where we have less experience, such as our Biogas Conversion Projects for biogas recovery at livestock farms; • the ability to obtain financing for a Biogas Conversion Project on acceptable terms or at all and the need for substantially more capital than initially budgeted to complete Biogas Conversion Projects and exposure to liabilities as a result of unforeseen environmental, construction, technological or other complications; • failures or delays in obtaining desired or necessary land rights, including ownership, leases, easements, zoning rights and building permits; • a decrease in the availability, increased pricing on, and a delay in the timeliness of delivery of raw materials and components, necessary for the Biogas Conversion Projects to function or necessary for the conversion of a Biogas Conversion Projects from Renewable Power to RNG production; • obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and US federal government agencies and organizations; • penalties, including potential termination, under short-term and long-term contracts for failing to produce or deliver a sufficient quantity and acceptable quality of RNG in accordance with our contractual obligations; • unknown regulatory changes related to the transportation of RNG, which may increase the transportation cost for delivering under our contracts then in effect; • the consent and authorization of local utilities or other energy development off-takers to ensure successful interconnection to energy grids to enable power and gas sales; and • difficulties in identifying, obtaining and permitting suitable sites for new Biogas Conversion Projects.
Our ability to acquire, convert, develop and operate Biogas Conversion Projects, as well as expand production at current Biogas Conversion Projects, is subject to several additional risks, including: • regulatory changes that affect the value of RNG and the associated Environmental Attributes, which could have a significant effect on the financial performance of our Biogas Conversion Projects and the number of potential Biogas Conversion Projects with attractive economics; • changes in energy commodity prices, such as natural gas and wholesale electricity prices, which could have a significant effect on our revenues and expenses; • changes in pipeline gas quality standards or other regulatory changes that may limit our ability to transport RNG on pipelines for delivery to third parties or increase the costs of processing RNG to allow for such deliveries; 23 • changes in the broader waste collection industry, including changes affecting the waste collection and biogas potential of the landfill industry, which could limit the LFG resource that we currently target for our Biogas Conversion Projects; • substantial construction risks, including the risk of delay, that may arise due to forces outside of our control, such as those related to engineering and environmental problems, inclement weather, inflationary pressures on materials and labor, and supply chain and labor disruptions that may result due to recent regulatory changes or otherwise; • operating risks and the effect of disruptions on our business, including the effects of global health crises, weather conditions, catastrophic events, such as fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events that impact us, our counterparties, suppliers, distributors and subcontractors; • accidents involving personal injury or the loss of life; • entering into markets where we have less experience, such as our Biogas Conversion Projects for biogas recovery at livestock farms; • the ability to obtain financing for a Biogas Conversion Project on acceptable terms or at all and the need for substantially more capital than initially budgeted to complete Biogas Conversion Projects and exposure to liabilities as a result of unforeseen environmental, construction, technological or other complications; • failures or delays in obtaining desired or necessary land rights, including ownership, leases, easements, zoning rights and building permits; • a decrease in the availability, increased pricing on, and a delay in the timeliness of delivery of raw materials and components, necessary for the Biogas Conversion Projects to function or necessary for the conversion of a Biogas Conversion Projects from Renewable Power to RNG production; • obtaining and keeping in good standing permits, authorizations and consents from local city, county, state and US federal government agencies and organizations; • penalties, including potential termination, under short-term and long-term contracts for failing to produce or deliver a sufficient quantity and acceptable quality of RNG in accordance with our contractual obligations; • unknown regulatory changes related to the transportation of RNG, which may increase the transportation cost for delivering under our contracts then in effect; • the consent and authorization of local utilities or other energy development off-takers to ensure successful interconnection to energy grids to enable power and gas sales; and • difficulties in identifying, obtaining and permitting suitable sites for new Biogas Conversion Projects.
Additionally, even if preferred sites can be located, we may encounter land use or zoning difficulties, problems with utility services, challenges obtaining and retaining required permits and approvals or local resistance, including due to 40 reduced operations of permitting agencies because of the COVID-19 pandemic, any of which could prevent us or our counterparties from building new stations on such sites or limit or restrict the use of new or existing stations.
Additionally, even if preferred sites can be located, we may encounter land use or zoning difficulties, problems with utility services, challenges obtaining and retaining required permits and approvals or local resistance, including due to reduced operations of permitting agencies because of the COVID-19 pandemic, any of which could prevent us or our counterparties from building new stations on such sites or limit or restrict the use of new or existing stations.
The consequences of failing to meet the listing requirements include: • limited availability of market quotations for our securities; • a determination that the Class A common stock is a “penny stock” which will require brokers trading in the Class A common stock to adhere to more stringent rules; • possible reduction in the level of trading activity in the secondary trading market for shares of the Class A common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
The consequences of failing to meet the listing requirements include: 47 • limited availability of market quotations for our securities; • a determination that the Class A common stock is a “penny stock” which will require brokers trading in the Class A common stock to adhere to more stringent rules; • possible reduction in the level of trading activity in the secondary trading market for shares of the Class A common stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If the agencies that administer and enforce these programs disagree with our judgments, otherwise determine that we are not in compliance, 23 conduct reviews of our activities or make changes to the programs, then our ability to generate or sell these credits could be temporarily restricted pending completion of reviews or as a penalty, permanently limited or lost entirely, and we could also be subject to fines or other sanctions.
If the agencies that administer and enforce these programs disagree with our judgments, otherwise determine that we are not in compliance, conduct reviews of our activities or make changes to the programs, then our ability to generate or sell these credits could be temporarily restricted pending completion of reviews or as a penalty, permanently limited or lost entirely, and we could also be subject to fines or other sanctions.
These pricing pressures could also impact the profitability of prospective Biogas Conversion Projects, and, accordingly, negatively impact our overall financial condition, results of operations and prospects. 29 We currently face declining market prices for LCFS credits specifically within California as well as significant upward pressure on the costs associated with dispensing RNG specifically within California to generate the LCFS credits.
These pricing pressures could also impact the profitability of prospective Biogas Conversion Projects, and, accordingly, negatively impact our overall financial condition, results of operations and prospects. We currently face declining market prices for LCFS credits specifically within California as well as significant upward pressure on the costs associated with dispensing RNG specifically within California to generate the LCFS credits.
If such projects that had MBR 24 Authority were later to lose their MBR Authority, they would be required to obtain FERC’s acceptance of a cost-of-service rate schedule and could become subject to the significant accounting, record-keeping, and reporting requirements that are typically imposed on vertically-integrated utilities with cost-based rate schedules.
If such projects that had MBR Authority were later to lose their MBR Authority, they would be required to obtain FERC’s acceptance of a cost-of-service rate schedule and could become subject to the significant accounting, record-keeping, and reporting requirements that are typically imposed on vertically-integrated utilities with cost-based rate schedules.
Uncertainty remains under the IRA on which types of projects are eligible for the tax credits and incentives and how 25 projects can demonstrate compliance with the requirements, we may not receive full value of the tax credits and incentives, which could increase our income tax expense, reduce our net income and adversely impact the profitability of our projects or our ability to finance our projects.
Uncertainty remains under the IRA on which types of projects are eligible for the tax credits and incentives and how projects can demonstrate compliance with the requirements, we may not receive full value of the tax credits and incentives, which could increase our income tax expense, reduce our net income and adversely impact the profitability of our projects or our ability to finance our projects.
Despite our ongoing and anticipated cybersecurity efforts, a successful cybersecurity incident could lead to additional material costs, including those related to the loss of sensitive information, 51 repairs to infrastructure or capabilities essential to our operations, responding to litigation or regulatory investigations, and those related to a material and adverse impact on our reputation, financial position, results of operations, or cash flows.
Despite our ongoing and anticipated cybersecurity efforts, a successful cybersecurity incident could lead to additional material costs, including those related to the loss of sensitive information, repairs to infrastructure or capabilities essential to our operations, responding to litigation or regulatory investigations, and those related to a material and adverse impact on our reputation, financial position, results of operations, or cash flows.
Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. Environmental laws, rules and regulations have changed rapidly in recent years and generally have become more stringent over time, and we expect this trend to continue.
Our insurance may not cover all environmental risks and costs or may not provide sufficient coverage if an environmental claim is made against us. 38 Environmental laws, rules and regulations have changed rapidly in recent years and generally have become more stringent over time, and we expect this trend to continue.
In addition, if we are unable to avail ourselves of warranties and other contractual protections with our suppliers and service providers, we may incur liability to our counterparties or additional costs related to the affected products and services, which could adversely affect 21 our business, financial condition and results of operations.
In addition, if we are unable to avail ourselves of warranties and other contractual protections with our suppliers and service providers, we may incur liability to our counterparties or additional costs related to the affected products and services, which could adversely affect our business, financial condition and results of operations.
If the market for natural gas vehicle fuels does not develop at improved rates or levels, or if a market develops but we are not able to capture a 38 significant share of the market or the market subsequently declines, our business, growth potential, financial condition, and operating results would be harmed.
If the market for natural gas vehicle fuels does not develop at improved rates or levels, or if a market develops but we are not able to capture a significant share of the market or the market subsequently declines, our business, growth potential, financial condition, and operating results would be harmed.
Fortistar and/or members of our management team, such as Mr. Mark Comora or Mr. Nisar in their capacities as management of Fortistar or in their other endeavors, may be required to present potential business opportunities to the related entities described above, current or future affiliates of Fortistar, or third parties, before they present such opportunities to us.
Fortistar and/or members of our management team, such as Mr. Mark Comora or Mr. Nisar in their capacities as management of Fortistar or in their other endeavors, may be required to present potential business opportunities to the related entities described above, current or future affiliates of Fortistar, or third parties, before 46 they present such opportunities to us.
To the extent that OPAL is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will accrue interest until paid, which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made.
To the extent that OPAL is unable to make payments under the Tax Receivable Agreement for any reason, such payments will be deferred and will 36 accrue interest until paid, which could negatively impact our results of operations and could also affect our liquidity in periods in which such payments are made.
If actively quoted market 30 prices and pricing information from external sources are not available, the valuation of such contracts would involve judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of such contracts.
If actively quoted market prices and pricing information from external sources are not available, the valuation of such contracts would involve judgment or the use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the reported fair value of such contracts.
We also maintain an amount of insurance protection that we consider adequate to protect against these and other risks, but we cannot provide any assurance that our insurance will be sufficient or effective under any or all circumstances and against any or all hazards or liabilities to which we may be subject.
We also maintain an amount of insurance protection that we consider adequate to protect against these and other risks, but we cannot provide any assurance that our insurance will be sufficient or effective under any or all circumstances and against 26 any or all hazards or liabilities to which we may be subject.
Nevertheless, if we were to do so, eligibility for MBR Authority is predicated on a variety of factors, primarily including the overall market power that the power seller — together with all of its FERC-defined “affiliates” — has in the relevant market.
Nevertheless, if we were to do so, eligibility for MBR Authority is predicated 40 on a variety of factors, primarily including the overall market power that the power seller — together with all of its FERC-defined “affiliates” — has in the relevant market.
These projects currently benefit from various federal, state and local governmental incentives such as investment tax credits, cash grants in lieu of investment tax credits, loan guarantees, Renewable Portfolio Standards (“RPS”) programs, modified accelerated cost-recovery system of depreciation and bonus depreciation.
These projects currently benefit from various federal, state and local governmental incentives such as investment tax credits, cash grants in 41 lieu of investment tax credits, loan guarantees, Renewable Portfolio Standards (“RPS”) programs, modified accelerated cost-recovery system of depreciation and bonus depreciation.
A reduction in the prices we receive for Environmental Attributes, or a reduction in demand for them, whether through market forces generally, through the actions of market participants generally, or through the consolidation or elimination of 28 participants competing in the market for the purchase and retirement of Environmental Attributes, could have a material adverse effect on our results of operations.
A reduction in the prices we receive for Environmental Attributes, or a reduction in demand for them, whether through market forces generally, through the actions of market participants generally, or through the consolidation or elimination of participants competing in the market for the purchase and retirement of Environmental Attributes, could have a material adverse effect on our results of operations.
On the state level, the economics of RNG are enhanced by low-carbon fuel initiatives, particularly a well-established LCFS program in California and similar developing programs in Oregon and Washington (with several other states also actively considering similar initiatives).
On the state level, the economics of RNG are enhanced by low-carbon fuel initiatives, particularly a well-established LCFS program in California and similar developing programs in Oregon and Washington (with several other states also 39 actively considering similar initiatives).
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new 45 and evolving regulatory measures under applicable law.
We are subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law.
The actual amount of deferred tax assets and related liabilities that we will recognize will differ based on, among other things, the timing of the exchanges, the price of the shares of Class A common 50 stock at the time of the exchange, and the tax rates then in effect.
The actual amount of deferred tax assets and related liabilities that we will recognize will differ based on, among other things, the timing of the exchanges, the price of the shares of Class A common stock at the time of the exchange, and the tax rates then in effect.
The agreements governing such financings typically contain financial and other restrictive covenants that 42 limit a project subsidiary’s ability to make distributions to its parent or otherwise engage in activities that may be in its long-term best interests.
The agreements governing such financings typically contain financial and other restrictive covenants that limit a project subsidiary’s ability to make distributions to its parent or otherwise engage in activities that may be in its long-term best interests.
Because of rising insurance costs and changes in the 34 insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available.
Because of rising insurance costs and changes in the insurance markets, we cannot provide any assurance that our insurance coverage will continue to be available at all or at rates or on terms similar to those presently available.
Historically, in exchange for the biogas rights and additional agreements, we have paid the site owner and/or developer a royalty or other similar payment based on revenue generated by the project or volume of biogas used by the project.
Historically, in exchange for the biogas 21 rights and additional agreements, we have paid the site owner and/or developer a royalty or other similar payment based on revenue generated by the project or volume of biogas used by the project.
Our Biogas Conversion Projects rely on organic material, the decomposition of which causes the generation of gas consisting primarily of methane. The Biogas Conversion Projects use such methane gas to generate Renewable Power or RNG.
Our Biogas Conversion Projects rely on organic material, the decomposition of which causes the generation of gas consisting primarily of methane. The Biogas Conversion Projects use such methane gas to generate Renewable Power or 28 RNG.
The estimation of biogas production volume is an inexact process and dependent on many site-specific conditions, including the estimated annual waste volume, composition of waste, regional climate and the capacity and construction of 36 the site.
The estimation of biogas production volume is an inexact process and dependent on many site-specific conditions, including the estimated annual waste volume, composition of waste, regional climate and the capacity and construction of the site.
As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.
As a result, our operating results 45 and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.
For example, assuming no material changes in the relevant tax law, we expect that if we experienced a change of control the estimated Tax Receivable Agreement lump-sum payment would be approximately $133.0 million depending on OPAL Fuels’s rate of recovery of the tax basis increases associated with the deemed exchange of the OPAL Fuels Common Units (other than those held by us).
For example, assuming no material changes in the relevant tax law, we expect that if we experienced a change of control the estimated Tax Receivable Agreement lump-sum payment would be approximately $133.0 million depending on OPAL Fuels’ rate of recovery of the tax basis increases associated with the deemed exchange of the OPAL Fuels Common Units (other than those held by us).
FERC regulations limit using a transmission project for proprietary purposes, and we may be required to offer others (including competitors) 37 open-access to our transmission asset, should we acquire one. Such acquisitions could have a material adverse effect on our business, financial condition and results of operations.
FERC regulations limit using a transmission project for proprietary purposes, and we may be required to offer others (including competitors) 29 open-access to our transmission asset, should we acquire one. Such acquisitions could have a material adverse effect on our business, financial condition and results of operations.
Risks Related to the Company Future sales and issuances of our Class A common stock could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall. We expect that significant additional capital will be needed in the future to pursue our growth plan.
Risks Related to Ownership of Our Class A Common Stock 44 Future sales and issuances of our Class A common stock could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall. We expect that significant additional capital will be needed in the future to pursue our growth plan.
Sequestering CO2 is subject to numerous laws and regulations with uncertain permitting timelines and costs. We also intend to explore the production of renewable hydrogen sourced from a number of our projects’ RNG, and we may enter into long-term fixed price off-take contracts for green hydrogen that we may produce at our projects.
Sequestering carbon dioxide is subject to numerous laws and regulations with uncertain permitting timelines and costs. We also intend to explore the production of renewable hydrogen sourced from a number of our projects’ RNG, and we may enter into long-term fixed price off-take contracts for green hydrogen that we may produce at our projects.
To raise capital, we may sell shares of our Class A common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell shares of our Class A common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
To raise capital, we may sell shares of our Class A common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we or our subsidiaries issue additional equity securities, investors may be materially diluted by subsequent sales.
Certain provisions of the Organizational Documents may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder of ours might consider is in its best interest, including those attempts that might result in a premium over the market price for the shares of our Class A common stock.
Certain provisions of our certificate of incorporation may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder of ours might consider is in its best interest, including those attempts that might result in a premium over the market price for the shares of our Class A common stock.
These manufacturers may decide not to expand or maintain, or may decide to discontinue or curtail, their product lines for a variety of reasons, including, without limitation, as a result of the adoption of governmental policies or programs such as the rules adopted by the California Air Resources Board on June 25, 2020 requiring the sale of zero-emission heavy-duty trucks (the “Advanced Clean Trucks Regulation”) and Executive Order N-79-20 issued by the Governor of the State of California in September 2020 (the “September 2020 Executive Order”).
These manufacturers may decide not to expand or maintain, or may decide to discontinue or curtail, their product lines for a variety of reasons, including, without limitation, as a result of the adoption of governmental policies or programs such as the rules adopted by the California Air Resources Board on June 25, 2020 requiring the sale of zero-emission heavy-duty trucks and Executive Order N-79-20 issued by the Governor of the State of California in September 2020.
In California’s case, in 2009, the California Air Resource Board (“CARB”) adopted LCFS regulations aimed at reducing the CI of transportation fuel sold and purchased in the state. A CI score is calculated as grams of CO₂ equivalent per megajoule of energy by the fuel.
In California’s case, in 2009, the California Air Resources Board adopted LCFS regulations aimed at reducing the CI of transportation fuel sold and purchased in the state. A CI score is calculated as grams of CO₂ equivalent per megajoule of energy by the fuel.
If we are unable to obtain an adequate supply of RNG through a combination of Biogas Conversion Project production and supplies from third party RNG producers, we may be forced to pay a financial penalty under such contracts, including under a purchase and sale agreement under which we market a substantial majority of our Environmental Attributes through NextEra.
If we are unable to obtain an adequate supply of RNG through a combination of Biogas Conversion Project production and supplies from third party RNG producers, we may be forced to pay a financial penalty under such contracts, including under a purchase and sale agreement under which we market a substantial majority of our Environmental Attributes through NextEra Energy Marketing, LLC (“NextEra”).
The trading price of the Class A common stock has been, and is likely to continue to be, volatile and could fluctuate in response to a number of factors, many of which are beyond our control.
The trading price of the Class A common stock has been, and is likely to continue to be, volatile and could fluctuate in response to a number of factors, many of which are beyond our control. 48 The trading price of the Class A common stock may fluctuate significantly in response to a number of factors, many of which are beyond our control.
Market Risks Related to Our Business A reduction in the prices we can obtain for the Environmental Attributes generated from RNG, which include RINs, ISCC Carbon Credits, LCFS credits, and other incentives, could have a material adverse effect on our business prospects, financial condition and results of operations .
A reduction in the prices we can obtain for the Environmental Attributes generated from RNG, which include RINs, ISCC Carbon Credits, LCFS credits, and other incentives, could have a material adverse effect on our business prospects, financial condition and results of operations .
Cybersecurity and Information Technology Risks A failure of our IT and data security infrastructure could have a material adverse effect on our business and operations. We rely upon the expertise, reliability and security of our outsourced IT provider and their services to expand and continually update this infrastructure in response to the changing needs of our business.
A failure of our IT and data security infrastructure could have a material adverse effect on our business and operations. We rely upon the expertise, reliability and security of our outsourced IT provider and their services to expand and continually update this infrastructure in response to the changing needs of our business.
The dual-class structure of our common stock may adversely affect the trading market for the shares of Class A common stock. 48 We cannot predict whether our dual class structure, which affords the shares of Class A common stock and Class B common stock one vote per share while affording the shares of Class C common stock and Class D common stock with five votes per share, combined with our concentrated voting control by OPAL Holdco due to its ownership of shares of Class D common stock, will result in a lower or more volatile market price of the shares of Class A common stock or in adverse publicity or other adverse consequences.
We cannot predict whether our dual class structure, which affords the shares of Class A common stock and Class B common stock one vote per share while affording the shares of Class C common stock and Class D common stock with five votes per share, combined with our concentrated voting control by OPAL Holdco due to its ownership of shares of Class D common stock, will result in a lower or more volatile market price of the shares of Class A common stock or in adverse publicity or other adverse consequences.
At this time, we cannot predict the outcome of any of these executive orders on our operations.
At this time, we cannot predict the outcome of any of these or any future executive orders on our operations.
The price of Renewable Power and RNG can vary significantly for many reasons, including: (i) increases and decreases in generation capacity in our markets; (ii) changes in power transmission or fuel transportation capacity constraints or inefficiencies; (iii) power supply disruptions; (iv) weather conditions; (v) seasonal fluctuations; (vi) changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools and practices; (vii) development of new fuels or new technologies for the production of power; (viii) federal and state regulations; and (ix) actions of the Independent System Operators (“ISOs”) and regional transmission organizations (“RTOs”) that control and administer regional power markets.
The price of Renewable Power and RNG can vary significantly for many reasons, including: (i) increases and decreases in generation capacity in our markets; (ii) changes in power transmission or fuel transportation capacity constraints or inefficiencies; (iii) power supply disruptions; (iv) weather conditions; (v) seasonal fluctuations; (vi) changes in the demand for power or in patterns of power usage, including the potential development of demand-side management tools and practices; (vii) development of new fuels or new technologies for the production of power; (viii) federal and state regulations; and (ix) actions of the ISOs and RTOs that control and administer regional power markets.
Changes to the use of our assets, divestitures, changes to the structure of our business, significant negative industry or economic trends, disruptions to our operations, inability to effectively integrate any acquired businesses, further market capitalization declines, or other similar actions or conditions could result in additional asset impairment or goodwill impairment charges or other adverse consequences, any of which could have material adverse effects on our financial condition, our results of operations and the trading price of common stock. 43 Loss of our key management could adversely affect our business performance.
Changes to the use of our assets, divestitures, changes to the structure of our business, significant negative industry or economic trends, disruptions to our operations, inability to effectively integrate any acquired businesses, further market capitalization declines, or other similar actions or conditions could result in additional asset impairment or goodwill impairment charges or other adverse consequences, any of which could have material adverse effects on our financial condition, our results of operations and the trading price of common stock.
RISK FACTORS Risks Related to Our Business Risks Related to Our Third Party Relationships and Government Regulation of Our Business We are dependent on contractual arrangements with, and the cooperation of, owners and operators of biogas project sites where our Biogas Conversion Projects are located for the underlying biogas rights granted to us in connection with our Biogas Conversion Projects and for access to and operations on the biogas project sites where we utilize those underlying biogas rights.
RISK FACTORS Risks Related to Our Business We are dependent on contractual arrangements with, and the cooperation of, owners and operators of biogas project sites where our Biogas Conversion Projects are located for the underlying biogas rights granted to us in connection with our Biogas Conversion Projects and for access to and operations on the biogas project sites where we utilize those underlying biogas rights.
This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments to our organizational documents, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
This concentrated control will limit or preclude your ability to influence corporate matters for the foreseeable future, including the election of directors, amendments to our certificate of incorporation or bylaws, and any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.
Additional risks related to acquiring existing projects, include: • the purchase price we pay could significantly deplete our cash reserves or result in dilution to our existing stockholders; • the acquired companies or assets may not improve our customer offerings or market position as planned; • we may have difficulty integrating the operations and personnel of the acquired companies; 32 • key personnel and counterparties of the acquired companies may terminate their relationships with the acquired companies as a result of or following the acquisition; • we may experience additional financial and accounting challenges and complexities in certain areas, such as tax planning and financial reporting; • we may incur additional costs and expenses related to complying with additional laws, rules or regulations in new jurisdictions; • we may assume or be held liable for risks and liabilities (including for environmental-related costs) as a result of our acquisitions, some of which we may not discover during our due diligence or adequately adjust for in our acquisition arrangements; • our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically diverse enterprises; • we may incur one-time write-offs or restructuring charges in connection with an acquisition; • we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; • we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; and • we may not be able to realize the cost savings or other financial benefits we anticipated.
A failure to achieve the financial returns we expect when we acquire Biogas Conversion Projects could have a material adverse effect on our ability to implement our growth strategy and, ultimately, our business, financial condition and results of operations. 24 Additional risks related to acquiring existing projects, include: • the purchase price we pay could significantly deplete our cash reserves or result in dilution to our existing stockholders; • the acquired companies or assets may not improve our customer offerings or market position as planned; • we may have difficulty integrating the operations and personnel of the acquired companies; • key personnel and counterparties of the acquired companies may terminate their relationships with the acquired companies as a result of or following the acquisition; • we may experience additional financial and accounting challenges and complexities in certain areas, such as tax planning and financial reporting; • we may incur additional costs and expenses related to complying with additional laws, rules or regulations in new jurisdictions; • we may assume or be held liable for risks and liabilities (including for environmental-related costs) as a result of our acquisitions, some of which we may not discover during our due diligence or adequately adjust for in our acquisition arrangements; • our ongoing business and management’s attention may be disrupted or diverted by transition or integration issues and the complexity of managing geographically diverse enterprises; • we may incur one-time write-offs or restructuring charges in connection with an acquisition; • we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; • we may acquire goodwill and other intangible assets that are subject to amortization or impairment tests, which could result in future charges to earnings; and • we may not be able to realize the cost savings or other financial benefits we anticipated.
Pursuant to that certain Investor Rights Agreement, dated July 21, 2022, by and among OPAL Fuels Inc., each of the sellers named therein, the Sponsor and the sponsor principals, those stockholders are entitled to have the registration statement under the Securities Act kept effective for a prolonged period of time such that registered resales of their shares of Class A common stock can be made.
Pursuant to that certain Investor Rights Agreement, dated July 21, 2022, by and among OPAL Fuels Inc., each of the sellers named therein, ArcLight CTC Holdings II, L.P. and its principals, those stockholders are entitled to have the registration statement under the Securities Act kept effective for a prolonged period of time such that registered resales of their shares of Class A common stock can be made.
CARB awards these credits to RNG projects based on such project’s CI score relative to the targeted CI score for both gasoline and diesel fuels. The number of monetizable LCFS credits per unit of fuel increases with a lower CI score.
The California Air Resources Board awards these credits to RNG projects based on such project’s CI score relative to the targeted CI score for both gasoline and diesel fuels. The number of monetizable LCFS credits per unit of fuel increases with a lower CI score.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternate forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of the Company; (ii) any action, suit or proceeding (including any class action) asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the Company to the Company or the Company’s stockholders; (iii) any action, suit or proceeding (including any class action) asserting a claim against the Company or any current or former director, officer, other employee, agent or stockholder of the Company arising out of or pursuant to any provision of the General Corporation Law, this Certificate of Incorporation or the By-laws (as each may be amended from time to time); (iv) any action, suit or proceeding (including any class action) to interpret, apply, enforce or determine the validity of this Certificate of Incorporation or the By-laws (including any right, obligation or remedy thereunder); (v) any action, suit or proceeding as to which the General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; or (vi) any action asserting a claim against the Company or any director, officer or other employee of the Company governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternate forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the exclusive forum for (i) any derivative action, suit or proceeding brought on behalf of the Company; (ii) any action, suit or proceeding (including any class action) asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of the Company to the Company or the Company’s stockholders; (iii) any action, suit or proceeding (including any class action) asserting a claim against the Company or any current or former director, officer, other employee, agent or stockholder of the Company arising out of or pursuant to any provision of the General Corporation Law, this Certificate of Incorporation or the By-laws (as each may be amended from time to time); (iv) any action, suit or proceeding (including any class action) to interpret, apply, enforce or determine the validity of this Certificate of Incorporation or the By-laws (including any right, obligation or remedy thereunder); (v) any action, suit or proceeding as to which the General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware; or (vi) any action asserting a claim against the Company or any director, officer or other employee of the Company governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants. 49 The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.
Additional Risk Factors Relating to Our Dispensing Business Our commercial success depends in part on our ability to identify, acquire, develop and operate public and private Fueling Stations for public and commercial fleet vehicles in order to dispense RNG for use as vehicle fuel and generate the associated Environmental Attributes.
Our commercial success depends in part on our ability to identify, acquire, develop and operate public and private Fueling Stations for public and commercial fleet vehicles in order to dispense RNG for use as vehicle fuel and generate the associated Environmental Attributes.
There is also uncertainly if IRA incentives may be reduced or repealed in the future, especially following the 2024 elections. In addition, the timing of when assets are placed in service has in the past and could in the future impact our tax rate.
There is also uncertainty if IRA incentives may be reduced or repealed in the future, especially in light of the 2024 election results. In addition, the timing of when assets are placed in service has in the past and could in the future impact our tax rate.
The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies. Among other things, the Investment Company Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, prohibit the issuance of stock options and impose certain governance requirements.
Among other things, the Investment Company Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, prohibit the issuance of stock options and impose certain governance requirements.
From time to time, we face disputes or disagreements with owners and operators of biogas project sites which could materially impact our ability to continue to develop and/or operate an existing Biogas Conversion Project on its current 20 basis, or at all, and could materially delay or eliminate our ability to identify and successfully secure the rights to construct and operate other future Biogas Conversion Projects.
From time to time, we face disputes or disagreements with owners and operators of biogas project sites which could materially impact our ability to continue to develop and/or operate an existing Biogas Conversion Project on its current basis, or at all, and could materially delay or eliminate our ability to identify and successfully secure the rights to construct and operate other future Biogas Conversion Projects. 17 The success of our business depends, in part, on maintaining good relationships with biogas conversion project site owners and operators.
In addition, failure to comply with such covenants may entitle the related lenders to demand repayment and accelerate all such indebtedness. Further, in certain circumstances following a failure to timely redeem our preferred stock, holders of such preferred stock have the right to designate a director to our board of directors.
In addition, failure to comply with such covenants may entitle the related lenders to demand repayment and accelerate all such indebtedness. Further, in certain circumstances following a failure to timely redeem our preferred stock, holders of such preferred stock will have certain rights and remedies.
Factors that may affect the market price of the Class A common stock include changes in market prices of oil, natural gas and natural gas liquids; announcements relating to significant corporate transactions; fluctuations in our quarterly and annual financial results; operating and stock price performance of companies that investors deem comparable to us; and changes in government regulation or proposals relating to us.
Factors that may affect the market price of the Class A common stock include changes in market prices of oil, natural gas and natural gas liquids; announcements relating to significant corporate transactions; fluctuations in our quarterly and annual financial results; operating and stock price performance of companies that investors deem comparable to us; and changes in government regulation or proposals relating to us, including as a result of increased and/or new tariffs on equipment supply and raw materials.
These balances could be impacted if one or more of the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit markets.
The domestic bank deposit balances may exceed the FDIC insurance limits. These balances could be impacted if one or more of the financial institutions in which we deposit monies fails or is subject to other adverse conditions in the financial or credit markets.
If we were to cease participation in the management of OPAL Fuels, however, our interest in OPAL Fuels could be deemed an “investment security,” which could result in our being required to register as an investment company under the Investment Company Act and becoming subject to the registration and other requirements of the Investment Company Act.
If we were to cease participation in the management of OPAL Fuels, however, our interest in OPAL Fuels could be deemed an “investment security,” which could result in our being required to register as an investment company under the Investment Company Act and becoming subject to the registration and other requirements of the Investment Company Act. 35 The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operations of investment companies.
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. 39 The acquisition, financing, construction and development of projects involves numerous risks, including: • 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; • the ability to obtain financing for a project on acceptable terms or at all; • delays in deliveries or increases in the price of equipment or other materials; • permitting and other regulatory issues, license revocation and changes in legal requirements; • increases in the cost of labor, labor disputes and work stoppages or the inability to find an adequate supply of workers; • failure to receive quality and timely performance of third-party services; • unforeseen engineering and environmental problems; • cost overruns or supply chain disruptions; • accidents involving personal injury or the loss of life; • weather conditions, health crises, pandemics, catastrophic events, including fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events; and • interconnection and access to utilities.
The acquisition, financing, construction and development of projects involves numerous risks, including: • 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; • the ability to obtain financing for a project on acceptable terms or at all; • delays in deliveries or increases in the price of equipment or other materials; 31 • permitting and other regulatory issues, license revocation and changes in legal requirements; • increases in the cost of labor, labor disputes and work stoppages or the inability to find an adequate supply of workers; • failure to receive quality and timely performance of third-party services; • unforeseen engineering and environmental problems; • cost overruns or supply chain disruptions; • accidents involving personal injury or the loss of life; • weather conditions, health crises, pandemics, catastrophic events, including fires, explosions, earthquakes, droughts and acts of terrorism, and other force majeure events; and • interconnection and access to utilities.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.
This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed. On July 12, 2023, the EPA issued final rule 88 Fed.
Certain of our gas rights agreements, power purchase agreements, fuel supply agreements, interconnection agreements, RNG dispensing agreements and other agreements, including contracts with owners and operators of biogas conversion project sites, require us to make payments or adjust prices to counterparties based on past or current changes in natural gas price indices, project productivity or other metrics and involve complex calculations.
Certain of our gas rights agreements, power purchase agreements, fuel supply agreements, interconnection agreements, RNG dispensing agreements and other agreements, including contracts with owners and operators of biogas conversion project sites, require us to make payments or adjust prices to counterparties based on past or current changes in natural gas price indices, project productivity or other metrics and involve complex calculations. 20 Moreover, the underlying indices governing payments under such agreements are subject to change, may be discontinued or replaced.
The volatility in the price of oil, gasoline, diesel, natural gas, RNG, or Environmental Attribute prices could adversely affect our business. Historically, the prices of Environmental Attributes, RNG, natural gas, crude oil, gasoline and diesel have been volatile and this volatility may continue to increase in future.
Historically, the prices of Environmental Attributes, RNG, natural gas, crude oil, gasoline and diesel have been volatile and this volatility may continue to increase in future.
These assessments and estimates are based on the information available to each management team at the time of its respective assessment and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from our assessments and estimates.
These assessments and estimates are based on the information available to each management team at the time of its respective assessment and involve a significant amount of management judgment.
Risks Related to Our Business and Industry Additional Risk Factors Relating to Our Biogas Capture Business Our ability to acquire, convert, develop and operate Biogas Conversion Projects, as well as expand production at current Biogas Conversion Projects, is subject to many risks.
Our ability to acquire, convert, develop and operate Biogas Conversion Projects, as well as expand production at current Biogas Conversion Projects, is subject to many risks.
Further, we qualify our RINs through a voluntary Quality Assurance Plan, which typically takes from three to five months from first injection of RNG into the commercial pipeline system.
We are required to register our RNG projects with the EPA and relevant state regulatory agencies. Further, we qualify our RINs through a voluntary Quality Assurance Plan, which typically takes from three to five months from first injection of RNG into the commercial pipeline system.
Anti-takeover provisions are contained in the Organizational Documents that could delay or prevent a change of control.
Anti-takeover provisions are contained in our certificate of incorporation that could delay or prevent a change of control.
Even when not merited or whether or not we ultimately prevail, the defense of these lawsuits may divert management’s attention, and we may incur significant expenses in defending these lawsuits.
Actual outcomes or losses may differ materially from our assessments and estimates. 34 Even when not merited or whether or not we ultimately prevail, the defense of these lawsuits may divert management’s attention, and we may incur significant expenses in defending these lawsuits.
We are subject to risks and costs, including potential negative publicity, associated with lawsuits, in particular with respect to environmental claims and lawsuits or claims contesting the construction or operation of our Biogas Conversion Projects and Fueling Station projects.
We are subject to risks associated with litigation or administrative proceedings that could materially impact our operations, including proceedings in the future related to our projects we subsequently acquire. 19 We are subject to risks and costs, including potential negative publicity, associated with lawsuits, in particular with respect to environmental claims and lawsuits or claims contesting the construction or operation of our Biogas Conversion Projects and Fueling Station projects.
Were, however, the agreement to be terminated as of the date of this report and we were not to deliver any further Environmental Attribute volume to NextEra under the agreement, the maximum potential payment to NextEra under these provisions would be approximately $9.9 million based on current market prices for such Environmental Attributes. 35 The success of our RNG projects depends on our ability to timely generate and ultimately receive certification of the Environmental Attributes associated with our RNG production and sale.
Were, however, the agreement to be terminated as of the date of this report and we were not to deliver any further Environmental Attribute volume to NextEra under the agreement, the 27 maximum potential payment to NextEra under these provisions would be approximately $9.9 million based on current market prices for such Environmental Attributes.
Moreover, the underlying indices governing payments under such agreements are subject to change, may be discontinued or replaced. The interpretation of these price adjustments and calculations and the potential discontinuation or replacement of relevant indices or metrics could result in disputes with the counterparties with respect to such agreements.
The interpretation of these price adjustments and calculations and the potential discontinuation or replacement of relevant indices or metrics could result in disputes with the counterparties with respect to such agreements.
The trading price of the Class A common stock may fluctuate significantly in response to a number of factors, many of which are beyond our control. For instance, if our financial results are below the expectations of securities analysts and investors, the market price of the Class A common stock could decrease, perhaps significantly.
For instance, if our financial results are below the expectations of securities analysts and investors, the market price of the Class A common stock could decrease, perhaps significantly.
Our only material assets are our direct interests in OPAL Fuels, and we are accordingly dependent upon distributions from OPAL Fuels to pay dividends and taxes and other expenses. We are a holding company and have no material assets other than our ownership of Class A Units in OPAL Fuels. We therefore have no independent means of generating revenue.
We are a holding company and have no material assets other than our ownership of Class A units in OPAL Fuels. We therefore have no independent means of generating revenue.
Sales of up to 163,676,735 shares of our Class A common stock may be effected 44 pursuant to our registration statement on Form S-3 filed under the Securities Act (file number 333-266757), which was declared effective on August 10, 2023, or in reliance upon an exemption from registration under the Securities Act.
We originally registered for resale up to 163,676,735 shares of our Class A common stock pursuant to our registration statement on Form S-3 filed under the Securities Act (File No. 333-266757), which was declared effective on August 10, 2023.
If any of these events occur, our business, operating results and cash flows could be negatively affected. Additional Risk Factors Relating to Our Business in General Certain of our Biogas Conversion Projects and Fueling Stations are newly constructed or are under construction and may not perform as we expect.
If any of these events occur, our business, operating results and cash flows could be negatively affected. Certain of our Biogas Conversion Projects and Fueling Stations are newly constructed or are under construction and may not perform as we expect. We have a number of Biogas Conversion Projects under construction that will begin production over the next 18-24 months.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe subscribe to reports and services that identify cybersecurity threats, analyze reports of threats and conduct vulnerability assessments to identify vulnerabilities. 53 Depending on the environment, we implement and maintain various technical, physical and organizational measures designed to manage and mitigate material risks from cybersecurity threats to our Information Assets.
Biggest changeWe subscribe to reports and services that identify cybersecurity threats, analyze reports of threats and conduct vulnerability assessments to identify vulnerabilities. Depending on the environment, we implement and maintain various technical, physical and organizational measures designed to manage and mitigate material risks from cybersecurity threats to our Information Assets.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We do not own any real property. Our corporate headquarters are located in White Plains, New York, where we occupy approximately 13,600 square feet of shared office space with an affiliate of Fortistar pursuant to an Administrative Services Agreement. In addition, we lease office and maintenance facilities in Oronoco, Minnesota and Rancho Cucamonga, California.
Biggest changeITEM 2. PROPERTIES 50 We do not own any real property. Our corporate headquarters are located in White Plains, New York, where we occupy approximately 13,600 square feet of shared office space with an affiliate of Fortistar pursuant to an Administrative Services Agreement. In addition, we lease office and maintenance facilities in Oronoco, Minnesota and Rancho Cucamonga, California.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSTK-CV-UCC-2024-0000185 and commenced a related arbitration proceeding in order to obtain a formal determination on the claims, AAA Case No. 01-24-0000-0775. The Superior Court Action will be stayed, pending an award in the AAA proceeding. The AAA proceeding has not been set for hearing.
Biggest changeSTK- CV-UCC-2024-0000185 and commenced a related arbitration proceeding in order to obtain a formal determination on the claims; AAA Case No. 01-24-0000-0775. The Superior Court Action has been stayed, pending the conclusion of the arbitration. In the meantime, the AAA has empaneled three experienced arbitrators and has set the hearing date for the matter, currently schedule in May 2026.
Central Valley Project In September 2021, an indirect subsidiary of the Company, MD Digester, LLC, entered into a fixed-price Engineering, Procurement and Construction Contract (an “EPC Contract”) with VEC Partners, Inc. d/b/a CEI Builders (“Contractor”) for the design and construction of a turn-key renewable natural gas production facility using dairy cow manure as feedstock.
Central Valley Project In September 2021, an indirect subsidiary of the Company, MD Digester, LLC (“MD”), entered into a fixed-price Engineering, Procurement and Construction Contract (an “EPC Contract”) with VEC Partners, Inc. d/b/a CEI Builders (“CEI”) for the design and construction of a turn-key renewable natural gas production facility using dairy cow manure as feedstock in California’s Central Valley.
The Company disputes substantially all of the change order requests. On January 5, 2024, the Company filed a civil lawsuit captioned, MD Digester, LLC. et. al. vs. VEC Partners, Inc. et. al.; California Superior Court, County of San Joaquin; Action No.
The Company disputes the vast majority of the change order requests. In January 2024, the Company filed a civil lawsuit captioned, MD Digester, LLC. et. al. vs. VEC Partners, Inc. et. al.; with the California Superior Court, County of San Joaquin; Action No.
However, due to the incipient stage of the litigation and related arbitration, its ongoing status, and the uncertainties involved in all litigation and arbitration, the Company does not believe it is feasible at this time to assess the likely outcome of the litigation and related arbitration, the timing of its resolution, or its ultimate impact on the Central Valley projects or the Company's business, financial condition or results of operations.
However, due to the incipient stage of the litigation and related arbitration, the recency of the termination, and the ongoing status of the proceedings and discussions with the bond surety, as well as 51 the uncertainties involved in all litigation and arbitration, the Company does not believe it is feasible at this time to assess the likely outcome of the litigation and related arbitration, the timing of its resolution, or its ultimate impact, if any, on the Central Valley projects or the Company's business, financial condition or results of operations.
The Company believes its claims against Contractor have substantial merit, and intends to prosecute its claims vigorously.
The Company believes its claims against CEI (and the surety where bond claims are denied) have substantial merit, and intends to prosecute the claims vigorously.
Contractor has submitted a series of change order requests seeking to increase the EPC Contract price under each contract by approximately $14 million (i.e., approximately $28 million in total), primarily due to modifications to Contractor’s design drawings that are required to meet its contracted performance guaranties and a termination (for default) of one of Contractor’s major equipment manufacturers.
CEI has submitted a series of change order requests seeking to increase the EPC Contract Price by approximately $14 million, per project, primarily due to: (1) modifications to CEI’s design drawings which are required to meet its contracted performance guaranties, and (2) a default by one of CEI’s major equipment manufacturers.
We do not believe that the outcome of any of our current legal proceedings will have a material adverse impact on our business, financial condition and results of operations. Set forth below is information related to the Company’s material pending legal proceedings as of the date of this report, other than ordinary routine litigation incidental to the business.
We do not believe that the outcome of any of our current legal proceedings will have a material adverse impact on our business, financial condition and results of operations.
In December 2021, a second indirect subsidiary of the Company, VS Digester, LLC entered into a nearly identical EPC Contract for the design and construction of a second facility in connection with the same project.
In December 2021, a second indirect subsidiary of the Company, VS Digester, LLC (“VS”) entered into a nearly identical EPC Contract (collectively, the "EPC Contracts") with CEI for the design and construction of a second facility, also in California’s Central Valley. CEI’s performance under both of the EPC Contracts is fully bonded by licensed sureties.
Removed
Contractor is required to select an arbitrator who will in concert with the Company’s selected arbitrator nominate a Chair for the AAA, three-person arbitration panel. As a result of the procedural status of these matters, no discovery has occurred.
Added
The EPC Agreement requires that CEI, continue working during the course of the litigation and related arbitration proceedings; however, CEI effectively stopped working. Between May and August 2024, MD issued a series of Notices of Default and Demands to Cure to CEI. CEI failed to cure, and on July 30, 2024, MD terminated CEI for default.
Removed
The EPC Agreement provides that Contractor is obligated to continue working during the course of 54 the litigation and related arbitration proceedings. Contractor’s performance under both of the EPC Contracts is fully bonded by licensed sureties. Despite informal settlement discussions with Contractor, the parties have not been able as of yet to resolve the claims.
Added
MD notified CEI’s performance bond surety, Atlantic Specialty Insurance Company of the termination and demanded that it perform under the bond. Atlantic has denied the claim. On July 11, 2024, VS issued a Notice of Default and Demand to Cure, advising CEI of its defaults and giving it an opportunity to cure.
Removed
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Added
CEI failed to do so, and on August 27, 2024, VS terminated CEI for default. VS has notified CEI’s bond surety, also Atlantic, of the second termination and demanded that it perform under the performance bond. The surety has denied the claim.
Added
As a result of CEI’s default and Atlantic’s denial of the claims, MD and VS have amended their claims in the AAA arbitration to include breach of contract claims against CEI and breach of performance bond claims against Atlantic (who was formally joined into the arbitration on November 20, 2024) in the AAA Arbitration with CEI.
Added
CEI has since recorded mechanic’s liens against each of the projects for $4.9 million (MD) and $2 million (VS), and recently filed actions with the Stanislaus and San Joaquin County Superior Courts, respectively, to enforce their liens. It is expected that these claims will be stayed and consolidated with the pending arbitration proceeding.
Added
In addition to the above-referenced action and arbitration, several of CEI’s subcontractors have recorded mechanic’s liens against the MD and VS projects, which the Company is obligated to defend and indemnify the dairy owners from and against. Several of liens were untimely and have been released.
Added
Former Development Partner/Construction Manager In March 2024, the Company filed an action in the Orange County Superior Court (Case No. 30- 2024-01415510-CU-BC-CXC) against its former development partner and construction manager, Sierra Renewable Organics Management, LLC, as well as its principal (Ethan Werner) and affiliated engineering firm (CH Four Biogas) for Breach of Contract, Indemnity, Declaratory Relief, Intentional Misrepresentation and Negligent Misrepresentation relating to the design and development of the Projects.
Added
The case is not yet at issue, so no answer or cross claims have been filed yet, and no discovery has been conducted. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOn March 13, 2024, the closing sale price of our shares of Class A common stock, as reported on the Nasdaq Stock Market LLC, was $4.91 per share. The number of shareholders of record of our shares of Class A common stock was approximately 11 on March 13, 2024.
Biggest changeOn March 13, 2025, the closing sale price of our shares of Class A common stock, as reported on the Nasdaq Stock Market LLC, was $2.17 per share. The number of shareholders of record of our shares of Class A common stock was approximately 12 on March 13, 2025.
Unregistered Sales of Equity Securities; Use of Proceeds from Registered Offerings None Purchases of Equity securities by the Issuer and Affiliated Purchasers None. ITEM 6. RESERVED 55
Unregistered Sales of Equity Securities; Use of Proceeds from Registered Offerings None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. RESERVED 52

Item 7. Management's Discussion & Analysis

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

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Biggest changeTwelve Months Ended December 31, $ Change % Change (in thousands) 2023 2022 Revenues: RNG fuel $ 66,292 $ 73,158 $ (6,866) (9) % Fuel station services 135,012 117,415 17,597 15 % Renewable Power 54,804 44,958 9,846 22 % Total revenues 256,108 235,531 20,577 9 % Operating expenses: Cost of sales - RNG fuel 32,028 32,367 (339) (1) % Cost of sales - Fuel station services 115,322 98,845 16,477 17 % Cost of sales - Renewable power 36,550 31,580 4,970 16 % Project development and start up costs 4,866 6,438 (1,572) (24) % Selling, general, and administrative 51,262 51,386 (124) — % Depreciation, amortization, and accretion 14,565 13,136 1,429 11 % Income from equity method investments (5,525) (5,784) 259 (4) % Total expenses 249,068 227,968 21,100 9 % Operating income 7,040 7,563 (523) (7) % Other income (expense) Interest and financing expense, net (9,306) (6,640) (2,666) (40) % Change in fair value of derivative instruments, net 7,346 33,081 (25,735) (78) % Other income 124,472 1,943 122,529 6306 % Loss on debt extinguishment (2,190) — (2,190) 100 % Loss on warrant exchange (338) (3,368) 3,030 90 % Net income before provision for income taxes 127,024 32,579 94,445 290 % Provision for income taxes — — — — % Net income 127,024 32,579 94,445 290 % Net income attributable to redeemable non-controlling interests 97,426 22,409 75,017 335 % Net loss attributable to non-redeemable non-controlling interests (349) (1,153) 804 70 % Dividends on Redeemable preferred non-controlling interests 11,011 7,932 3,079 39 % Net income attributable to common stockholders $ 18,936 $ 3,391 $ 15,545 458 % 67 Revenues (in thousands) Twelve Months Ended December 31, 2023 2022 $ Change RNG Fuel Brown gas sales $ 4,231 $ 11,863 $ (7,632) Environmental Attributes (1) 61,221 61,049 172 Other 840 246 594 Total RNG Fuel $ 66,292 $ 73,158 $ (6,866) Fuel Station Services OPAL owned stations $ 18,958 $ 19,263 $ (305) RNG marketing (1) 45,277 28,912 16,365 Third party station service and maintenance 21,857 19,602 2,255 Construction 48,920 49,638 (718) Total Fuel Station Services $ 135,012 $ 117,415 $ 17,597 Renewable Power Electricity sales $ 34,680 $ 39,461 $ (4,781) Environmental Attributes (2) 20,124 5,497 14,627 Total Renewable Power $ 54,804 $ 44,958 $ 9,846 Total Revenues $ 256,108 $ 235,531 $ 20,577 (1) Revenues from Environmental Attributes in RNG Fuel segment and RNG marketing in Fuel Station Services segment relate to revenues earned from sales of RINs and LCFSs.
Biggest changeTwelve Months Ended December 31, $ Change % Change (in thousands) 2024 2023 63 Revenues: RNG fuel $ 88,420 $ 66,292 $ 22,128 33 % Fuel Station Services 166,875 135,012 31,863 24 % Renewable Power 44,677 54,804 (10,127) (18) % Total revenues 299,972 256,108 43,864 17 % Operating expenses: Cost of sales - RNG fuel 38,552 32,028 6,524 20 % Cost of sales - Fuel Station Services 128,804 115,322 13,482 12 % Cost of sales - Renewable Power 32,495 36,550 (4,055) (11) % Project development and start up costs 19,109 4,866 14,243 293 % Selling, general, and administrative 53,124 51,262 1,862 4 % Depreciation, amortization, and accretion 17,885 14,565 3,320 23 % Impairment loss 2,016 — 2,016 100 % Income from equity method investments (13,235) (5,525) (7,710) (140) % Total expenses 278,750 249,068 29,682 12 % Operating income 21,222 7,040 14,182 201 % Other income (expense): Interest and financing expense, net (19,610) (9,306) (10,304) (111) % Change in fair value of derivative instruments, net 1,596 7,346 (5,750) (78) % Other income 2,211 124,472 (122,261) (98) % Loss on debt extinguishment — (2,190) 2,190 100 % Loss on warrant exchange — (338) 338 100 % Income before provision for income taxes 5,419 127,024 (121,605) (96) % Income tax benefit 8,906 — 8,906 100 % Net income 14,325 127,024 (112,699) (89) % Net income attributable to redeemable non-controlling interests 2,851 97,426 (94,575) (97) % Net income (loss) attributable to non-redeemable non-controlling interests 443 (349) 792 227 % Dividends on Redeemable preferred non-controlling interests 10,470 11,011 (541) (5) % Net income attributable to Class A common stockholders $ 561 $ 18,936 $ (18,375) (97) % 64 Revenues (in thousands) Twelve Months Ended December 31, 2024 2023 $ Change RNG Fuel Brown gas sales $ 4,745 $ 4,231 $ 514 Environmental Attributes (1) 82,316 61,221 21,095 Other 1,359 840 519 Total RNG Fuel $ 88,420 $ 66,292 $ 22,128 Fuel Station Services OPAL owned stations $ 25,804 $ 18,958 $ 6,846 RNG marketing (2) 76,320 45,277 31,043 Third party station service and maintenance 25,053 21,857 3,196 Construction 39,698 48,920 (9,222) Total Fuel Station Services $ 166,875 $ 135,012 $ 31,863 Renewable Power Electricity sales $ 27,249 $ 34,680 $ (7,431) Environmental Attributes (3) 17,428 20,124 (2,696) Total Renewable Power $ 44,677 $ 54,804 $ (10,127) Total Revenues $ 299,972 $ 256,108 $ 43,864 (1) Revenues from Environmental Attributes in RNG Fuel segment relate to revenues earned from sales of RINs and LCFSs (2) Revenues from RNG marketing in Fuel Station Services segment relate to revenues earned from sales of RINs and LCFSs as well as revenue from Environmental Attribute generation and monetization services.
RNG is chemically identical to the natural gas used for cooking, heating homes and fueling natural gas engines, with one significant difference: RNG is produced by recycling harmful methane emissions created by decaying organic waste as opposed to natural gas which is a fossil fuel pumped from the ground. We have participated in the biogas-to-energy industry for over 20 years.
RNG is chemically identical to the natural gas used for cooking, heating homes and fueling natural gas engines, with one significant difference: RNG is produced by recycling methane emissions created by decaying organic waste as opposed to natural gas which is a fossil fuel pumped from the ground. We have participated in the biogas-to-energy industry for over 20 years.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their 57 application.
Critical accounting policies are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies, because they generally involve a comparatively higher degree of judgment in their application.
The Company utilizes commodity swap contracts to hedge against the unfavorable price fluctuations in market prices of electricity. The Company does not apply hedge accounting to these contracts. As such, unrealized and realized gain (loss) is recognized as component of Renewable Power revenues in the consolidated statement of operations.
The Company utilizes commodity swap contracts to hedge against the unfavorable price fluctuations in market prices of electricity. The Company does not apply hedge accounting to these contracts. As 54 such, unrealized and realized gain (loss) is recognized as component of Renewable Power revenues in the consolidated statement of operations.
Federal and state regulatory developments could result in significant future changes to market demand for the RINs and LCFS credits we produce. This would have a corresponding impact to our revenue, net income, and cash flow.
Federal and state regulatory 57 developments could result in significant future changes to market demand for the RINs and LCFS credits we produce. This would have a corresponding impact to our revenue, net income, and cash flow.
In March 2023, we issued 49,633 shares to certain warrant holders as consideration for their prior agreement to tender all warrants held by the warrant holders in the voluntary exchange offer which closed on December 22, 2022.
Loss on warrant exchange In March 2023, we issued 49,633 shares to certain warrant holders as consideration for their prior agreement to tender all warrants held by the warrant holders in the voluntary exchange offer which closed on December 22, 2022.
In conformity with GAAP, we generally first perform a qualitative assessment over whether it is more likely than not that a reporting unit’s fair value is less than its carrying value to determine if a quantitative assessment is required.
In conformity with GAAP, we 55 generally first perform a qualitative assessment over whether it is more likely than not that a reporting unit’s fair value is less than its carrying value to determine if a quantitative assessment is required.
Government policies can increase demand for our products by providing incentives to purchase RNG and Environmental Attributes. These government policies are modified and in flux constantly and any adverse changes to these policies could have a material effect the demand for our products.
Government policies can increase demand for our products by providing incentives to purchase RNG and Environmental Attributes. These government policies are modified and in flux constantly and any adverse changes to these policies could have a material effect on the demand for our products.
Transportation, including heavy-duty trucking, generates approximately 30% of overall CO₂ and other climate-harming GHG emissions in the United States, and transitioning this sector to low and negative carbon fuels is a critical step towards reducing overall global GHG emissions. The adoption rate of RNG-powered vehicles by commercial transportation fleets will significantly impact demand for our products.
Transportation, including heavy-duty trucking, generates approximately 30% of overall carbon dioxide and other climate-harming GHG emissions in the United States, and transitioning this sector to low and negative carbon fuels is a critical step towards reducing overall global GHG emissions. The adoption rate of RNG-powered vehicles by commercial transportation fleets will significantly impact demand for our products.
In addition to historical information, this discussion and analysis includes certain forward-looking statements which reflect our current expectations. The Company's actual results may materially differ from these forward-looking statements. Overview The Company is a vertically integrated leader in the capture and conversion of biogas into low carbon intensity Renewable Power and renewable natural gas (RNG).
In addition to historical information, this discussion and analysis includes certain forward-looking statements which reflect our current expectations. The Company's actual results may materially differ from these forward-looking statements. Overview The Company is a vertically integrated leader in the capture and conversion of biogas into low carbon intensity Renewable Power and RNG.
(5) Expected Commercial Operation Date (“COD”) for commencement of the RNG projects in construction is based on the Company’s estimate as of the date of this report. CODs are estimates and are subject to change as a result of, among other factors out of the Company’s control: (i) regulatory/permitting approval timing, (ii) disruption in supply chains and (iii) construction timing.
(4) Expected Commercial Operation Date (“COD”) for commencement of the RNG projects in construction is based on the Company’s estimate as of the date of this report. CODs are estimates and are subject to change as a result of, among other factors out of the Company’s control: (i) regulatory/permitting approval timing, (ii) disruption in supply chains and (iii) construction timing.
Our costs of sales associated with each revenue category are as follows: • RNG Fuel. Includes royalty payments to biogas site owners for the biogas we use; service provider costs; salaries and other indirect expenses related to the production process, utilities, transportation, storage, and insurance; and depreciation of production facilities. • Fuel Station Services.
Our costs of sales associated with each revenue category are as follows: RNG Fuel Includes royalty payments to biogas site owners for the biogas we use; service provider costs; salaries and other indirect expenses related to the production process, utilities, transportation, storage, and insurance; and depreciation of production facilities.
As a result, the Company recorded debt extinguishment of $0.3 million representing the fees allocated to the lenders who were repaid in full as part of loss on debt extinguishment in the consolidated statement of operations for the year ended December 31, 2023. There was no loss on debt extinguishment for the year ended December 31, 2022.
As a result, the Company recorded debt extinguishment of $0.3 million representing the fees allocated to the lenders who were repaid in full as part of loss on debt extinguishment in the consolidated statement of operations for the year ended December 31, 2023. There was no loss on debt extinguishment for the year ended December 31, 2024.
In addition to these projects in operation, we are actively pursuing expansion of our RNG-generating capacity and, accordingly, have a portfolio of RNG projects in construction or in development, with eight of our current Renewable Power Projects being considered candidates for conversion to RNG projects in the foreseeable future.
In addition to these projects in operation, we are actively pursuing expansion of our RNG-generating capacity and, accordingly, have a portfolio of RNG projects in construction or in development, with six of our current Renewable Power Projects being considered candidates for conversion to RNG projects in the foreseeable future.
Furthermore, 59 when multiple inputs are used and are categorized in different levels of the input hierarchy, then the fair value measurement in its entirety is categorized in the same level as its lowest level input that is significant to the fair value measurement.
Furthermore, when multiple inputs are used and are categorized in different levels of the input hierarchy, then the fair value measurement 56 in its entirety is categorized in the same level as its lowest level input that is significant to the fair value measurement.
Concentration of customers and associated credit risk The following table summarizes the percentage of consolidated accounts receivable, net by customers that equal or exceed 10% of the consolidated accounts receivable, net as of December 31, 2023 and 2022.
Concentration of customers and associated credit risk The following table summarizes the percentage of consolidated accounts receivable, net by customers that equal or exceed 10% of the consolidated accounts receivable, net as of December 31, 2024 and 2023.
Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
Such net tax effects on temporary differences are reflected on the Company’s consolidated balance sheets as deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when the Company believes that it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Refer to Note 15.
For further discussion regarding our results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021, refer to Part II, Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on March 29, 2023.
For further discussion regarding our results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, refer to Part II, Item 7 - "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on March 15, 2024.
Our goodwill impairment assessment is performed during the fourth quarter of each year or at the time facts or circumstances indicate that a reporting unit’s goodwill may be impaired.
Our goodwill impairment assessment is performed during the fourth quarter as of December 31 of each year or at the time facts or circumstances indicate that a reporting unit’s goodwill may be impaired.
Includes equipment supplier costs; service provider costs; and salaries and other indirect expenses. • Renewable Power. Includes royalty payments, land usage costs; service provider costs; salaries and other indirect expenses related to the production process; utilities; and depreciation of production facilities.
Fuel Station Services Includes equipment supplier costs; service provider costs; and salaries and other indirect expenses. Renewable Power Includes royalty payments, land usage costs; service provider costs; salaries and other indirect expenses related to the production process; utilities; and depreciation of production facilities.
GAAP requires goodwill to be allocated to reporting unit(s) at the acquisition date and to be tested for impairment at least annually, and in between annual tests whenever events or changes in circumstances indicate that the respective reporting unit’s fair value is less than its 58 carrying value.
For the purposes of impairment testing, U.S. GAAP requires goodwill to be allocated to reporting unit(s) at the acquisition date and to be tested for impairment at least annually, and in between annual tests whenever events or changes in circumstances indicate that the respective reporting unit’s fair value is less than its carrying value.
We also design, develop, construct, operate and service Fueling Stations for trucking fleets across the country that use natural gas to displace diesel as their transportation fuel. We have participated in the alternative vehicle fuels industry for approximately 13 years and have established an expanding network of Fueling Stations for dispensing RNG.
We also design, develop, construct, operate and service Fueling Stations for trucking fleets across the country that use natural gas to displace diesel as their transportation fuel. We have participated in the alternative vehicle fuels industry for over a decade and have established an expanding network of Fueling Stations for dispensing RNG.
Net income attributable to redeemable non-controlling interests Net income attributable to redeemable non-controlling interests for the year ended December 31, 2023 and 2022 is $97.4 million and $22.4 million, respectively. The net income for the years ended December 31, 2023 and 2022 reflects the net income belonging to OPAL Fuels equity holders based on pro-rata ownership.
Net income attributable to redeemable non-controlling interests Net income attributable to redeemable non-controlling interests for the year ended December 31, 2024 and 2023 is $2.9 million and $97.4 million, respectively. The net income for the years ended December 31, 2024 and 2023 reflects the net income belonging to OPAL Fuels equity holders based on pro-rata ownership.
As of December 31, 2023, we anticipate spending approximately $179.3 million in capital expenditures for the next 12 months for projects and fuel stations currently under construction and our share of contributions in our equity method investment projects.
As of December 31, 2024, we currently anticipate spending approximately $194 million in capital expenditures for the next 12 months for projects and fuel stations currently under construction and our share of contributions in our equity method investment projects.
These liabilities were recorded in the consolidated balance sheet upon completion of the Business Combination. Other income Other income increased by $122.5 million, or 6306%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. This change is primarily related to a gain $122.9 million recognized on deconsolidation of VIEs, Emerald and Sapphire.
These liabilities were recorded in the consolidated balance sheet upon completion of the Business Combination. Other income Other income decreased by $122.3 million, or 98%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change is primarily related to a gain $122.9 million recognized on deconsolidation of VIEs, Emerald and Sapphire in 2023.
We recorded $338 thousand representing the fair value of the shares issued based on the closing price on March 30, 2023 as part of Loss on warrant exchange on its consolidated statement of operations for the year ended December 31, 2023.
We recorded $338 thousand representing the fair value of the shares issued based on the closing price on March 30, 2023 as part of Loss on warrant exchange on its consolidated statement of operations for the year ended December 31, 2023. No such loss has been recorded in 2024.
In addition, we have recently begun implementing design, development, and construction services for hydrogen fueling stations, and we are pursuing opportunities to diversify our sources of biogas to other waste streams. As of December 31, 2023, we owned and operated 25 projects, eight of which are RNG projects and 17 of which are Renewable Power Projects.
In addition, we have recently begun implementing design, development, and construction services for hydrogen fueling stations, and we are pursuing opportunities to diversify our sources of biogas to other waste streams. As of December 31, 2024, we owned and operated 26 projects, 11 of which are RNG projects and 15 of which are Renewable Power Projects.
As of that date, our RNG projects in operation had a design capacity of 5.2 million MMBtus per year and our Renewable Power Projects in operation had a nameplate capacity of 112.5 MW per hour.
As of that date, our RNG projects in operation had a design capacity of 8.8 million MMBtus per year and our Renewable Power Projects in operation had a nameplate capacity of 105.8 MW per hour.
No other single customer accounted for more than 10% of consolidated revenues in these periods: Twelve Months Ended December 31, 2023 2022 Customer A 36 % 35 % Customer B 11 % 14 % Results of Operations for the years ended December 31, 2023 and 2022: Operational data The following table summarizes the operational data achieved for the years ended December 31, 2023 and 2022: Landfill RNG Facility Capacity and Utilization Summary Three Months Ended December 31, Twelve Months Ended December 31, 2023 2022 2023 2022 Landfill RNG Facility Capacity and Utilization (1)(2)(3)(4) Design Capacity (Million MMBtus) 1.3 0.9 4.1 3.2 Volume of Inlet Gas (Million MMBtus) 1.0 0.7 3.2 2.4 Inlet Design Capacity Utilization % 80 % 75 % 78 % 75 % RNG Fuel volume produced (Million MMBtus) 0.7 0.6 2.6 2.0 Utilization of Inlet Gas % 79 % 84 % 83 % 86 % (1) Design Capacity for RNG facilities is measured as the volume of feedstock biogas that the facility is capable of accepting at the inlet and processing during the associated period.
No other single customer accounted for more than 10% of consolidated revenues in these periods: Twelve Months Ended December 31, 2024 2023 Customer A 38 % 36 % Customer C 14 % 11 % Results of Operations for the years ended December 31, 2024 and 2023: Operational data The following table summarizes the operational data achieved for the years ended December 31, 2024 and 2023: Landfill RNG Facility Capacity and Utilization Summary Twelve Months Ended December 31, 2024 2023 Landfill RNG Facility Capacity and Utilization Design Capacity (Million MMBtus) (1) (4) 6.6 4.1 Volume of Inlet Gas (Million MMBtus) (2) 4.6 3.2 Inlet Design Capacity Utilization % (2) 73 % 79 % RNG Fuel volume produced (Million MMBtus) (4) 3.7 2.6 Utilization of Inlet Gas % (3) 81 % 83 % (1) Design Capacity for RNG facilities is measured as the volume of feedstock biogas that the facility is capable of accepting at the inlet and processing during the associated period.
No other single customer accounted for 10% or greater of our consolidated accounts receivables in these periods: Twelve Months Ended December 31, 2023 2022 Customer A (1) 40 % 29 % Customer B 14 % — % Customer C — % 16 % (1) Relates to sales of environmental attributes under Purchase and Sale agreement with NextEra. 62 The following table summarizes the percentage of consolidated revenues from customers that equal 10% or greater of the consolidated revenues in the period.
No other single customer accounted for 10% or greater of our consolidated accounts receivables in these periods: 59 Twelve Months Ended December 31, 2024 2023 Customer A (1) 31 % 40 % Customer B * 14 % Customer C 19 % * (1) Relates to sales of environmental attributes under Purchase and Sale agreement and Renewable Power sale agreements with NextEra. *Less than 10% The following table summarizes the percentage of consolidated revenues from customers that equal 10% or greater of the consolidated revenues in the period.
Utilization of Inlet Gas varies over time depending on availability and efficiency of the facility and the quality of landfill gas (i.e., concentrations of methane, oxygen, nitrogen, and other gases). The Company generally expects Utilization of Inlet Gas to be in the range of 80% to 90%. (4) Data not available for the Company's dairy projects, i.e., Sunoma and Biotown.
Utilization of Inlet Gas varies over time depending on availability and efficiency of the facility and the quality of landfill gas (i.e., concentrations of methane, oxygen, nitrogen, and other gases). The Company generally expects Utilization of Inlet Gas to be in the range of 80% to 90%. 60 (4) Excludes Sunoma and Biotown.
Emerging Growth Company Status We are an emerging growth company as defined in the JOBS Act. The JOBS Act provides emerging growth companies with certain exemptions from public company reporting requirements for up to five fiscal years while a company remains an emerging growth company.
Income Taxes, to our consolidated financial statements, for additional information. Emerging Growth Company Status We are an emerging growth company as defined in the JOBS Act. The JOBS Act provides emerging growth companies with certain exemptions from public company reporting requirements for up to five fiscal years while a company remains an emerging growth company.
Additionally, there was $0.6 million increase in revenues earned from providing management services to unconsolidated entities. Fuel Station Services Revenue from Fuel Station Services increased by $17.6 million, or 15%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Additionally, there was $0.5 million increase in revenues earned from providing management services to unconsolidated entities. Fuel Station Services Revenue from Fuel Station Services increased by $31.9 million, or 24%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Including Sunoma and Biotown, RNG fuel volume produced is 0.8 and 2.7 million MMBtu for the three and twelve months ended December 31, 2023, respectively. 63 Twelve Months Ended December 31, 2023 2022 Renewable Power Nameplate Capacity (MW per hour) (1) 112.5 112.5 Nameplate Capacity for the period (Millions MWh) (1) 0.98 0.98 Renewable Power produced ( Millions MWh) 0.44 0.47 Design Capacity Utilization (%) (2) 45 % 48 % (1) Design Capacity for Renewable Power facilities is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility, including dispatch and maintenance downtime and (iii) actual efficiency of the facility.
Twelve Months Ended December 31, 2024 2023 Renewable Power Nameplate Capacity (MW per hour) (1) 105.8 112.5 Nameplate Capacity for the period (Millions MWh) (1) 0.93 0.98 Renewable Power produced ( Millions MWh) 0.36 0.44 Design Capacity Utilization (%) (2) 39 % 45 % (1) Design Capacity for Renewable Power facilities is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility, including dispatch and maintenance downtime and (iii) actual efficiency of the facility.
(6) Please see Item 3: Legal Proceedings and Note 17 - Commitments and Contingencies to the financial statements. 65 Renewable Power Projects Below is a table setting forth the Renewable Power projects in operation in our portfolio: Nameplate capacity (MW per hour) (1) Current RNG conversion candidate (2) Renewable Power projects in operation: Sycamore 5.2 Yes Lopez 3.0 — Miramar Energy 3.2 Yes San Marcos 1.8 — Santa Cruz 1.6 — San Diego - Miramar 6.5 Yes West Covina 6.5 — Port Charlotte 2.9 — Taunton 3.6 — Arbor Hills (3) 28.9 N/A C&C 6.3 Yes Albany 5.9 — Concord and CMS 14.4 Yes Pioneer 8.0 — Prince William I (4) 1.9 Yes Prince William II (5) 4.8 Yes Old Dominion 8.0 Yes Total 112.5 Renewable Power projects in construction: Fall River (6) 2.4 — (1) Nameplate capacity is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual productivity of the facility.
(7) The Polk County project began commercial operations in October 2024. 62 Renewable Power Projects Below is a table setting forth the Renewable Power projects in operation in our portfolio: Nameplate capacity (MW per hour) (1) Current RNG conversion candidate (2) Renewable Power projects in operation: Sycamore 5.2 Yes Lopez 3.0 — Miramar Energy 3.2 Yes San Marcos 1.8 — Santa Cruz 1.6 — San Diego - Miramar 6.5 Yes West Covina 6.5 — Port Charlotte 2.9 — Taunton 3.6 — Arbor Hills (3) 28.9 N/A C&C 6.3 Yes Albany 5.9 — Concord and CMS 14.4 Yes Pioneer 8.0 — Richmond (previously "Old Dominion") 8.0 Yes Total 105.8 Renewable Power projects in construction: Fall River (4) 2.4 — (1) Nameplate capacity is the manufacturer’s expected capacity at ISO conditions for each facility and may not reflect actual production from the projects, which depends on many variables including, but not limited to, (i) quantity and quality of the biogas, (ii) operational up-time of the facility and (iii) actual productivity of the facility.
Twelve Months Ended December 31, 2023 2022 RNG Fuel volume produced (Million MMBtus) 2.7 2.2 RNG Fuel volume sold (Million GGEs) 43.8 29.4 Total volume delivered (Million GGEs) 133.2 115.9 RNG projects Below is a table setting forth the RNG projects in operation and construction in our portfolio: 64 OPAL's Share of Design Capacity (MMbtus per year) (1) Source of Biogas Ownership Expected Commercial Operation Date (5) RNG Projects in Operation: Greentree 1,061,712 LFG 100% N/A Imperial 1,061,712 LFG 100% N/A Emerald (2) (3) 1,327,140 LFG 50% N/A New River 663,570 LFG 100% N/A Noble Road (2) 464,499 LFG 50% N/A Pine Bend (2) 424,685 LFG 50% N/A Biotown (2) 48,573 Dairy 10% N/A Sunoma (4) 192,350 Dairy 90% N/A Sub total 5,244,241 RNG Projects in Construction: Prince William 1,725,282 LFG 100% First quarter 2024 Hilltop (6) 255,500 Dairy 100% Not Determined Vander Schaaf (6) 255,500 Dairy 100% Not Determined Polk County 1,060,000 LFG 100% Fourth quarter 2024 Sapphire (2) 796,284 LFG 50% Third quarter 2024 Atlantic (2) 331,785 LFG 50% Mid 2025 Sub total 4,424,351 (1) Reflects the Company’s ownership share of design capacity for projects that are not 100% owned by the Company (i.e., net of joint venture partners’ ownership).
Twelve Months Ended December 31, 2024 2023 RNG Fuel volume produced (Million MMBtus) 3.8 2.7 RNG Fuel volume sold (Million GGEs) 74.0 43.8 Total volume delivered (Million GGEs) 150.2 133.2 RNG projects Below is a table setting forth the RNG projects in operation and construction in our portfolio: 61 OPAL's Share of Design Capacity (MMbtus per year) (1) Source of Biogas Ownership Expected Commercial Operation Date (4) RNG Projects in Operation: Greentree 1,061,712 LFG 100% N/A Imperial 1,061,712 LFG 100% N/A Emerald (2) 1,327,140 LFG 50% N/A Sapphire (2) 796,284 LFG 50% N/A New River 663,570 LFG 100% N/A Noble Road (2) 464,499 LFG 50% N/A Pine Bend (2) 424,685 LFG 50% N/A Biotown (2) 43,750 Dairy 10% N/A Sunoma (3) 176,297 Dairy 90% N/A Prince William 1,725,282 LFG 100% N/A Polk County (7) 1,060,000 LFG 100% N/A Total 8,804,931 RNG Projects in Construction: Hilltop (5) 255,500 Dairy 100% (5) Vander Schaaf (5) 255,500 Dairy 100% (5) Burlington (6) 459,900 LFG 50% (6) Atlantic (2) 331,785 LFG 50% Third quarter 2025 Cottonwood (6) 664,884 LFG 100% (6) Kirby Canyon (6) 663,570 LFG 100% (6) Total 2,631,139 (1) Reflects the Company’s ownership share of design capacity for projects that are not 100% owned by the Company (i.e., net of joint venture partners’ ownership).
Net loss attributable to non-redeemable non-controlling interests Net loss attributable to non-redeemable non-controlling interests for the year ended December 31, 2023 decreased by $0.8 million or 70%, compared to the year ended December 31, 2022.
Net income (loss) attributable to non-redeemable non-controlling interests Net income (loss) attributable to non-redeemable non-controlling interests for the year ended December 31, 2024 increased by $0.8 million or 227%, compared to the year ended December 31, 2023.
(2) Revenues from Environmental Attributes in Renewable Power segment include revenues earned from sales of ISCC carbon sales and RECs. RNG Fuel Revenue from RNG Fuel decreased by $6.9 million, or 9%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
(3) Revenues from Environmental Attributes in Renewable Power segment include revenues earned from sales of ISCC carbon sales and RECs. RNG Fuel Revenue from RNG Fuel increased by $22.1 million, or 33%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
(6) It is expected to complete construction in fourth quarter of 2024. 66 Comparison of the Years Ended December 31, 2023 and 2022 The following table presents the period-over-period change for each line item in the Company's consolidated statements of operations for the twelve months ended months ended December 31, 2023 and 2022 .
Comparison of the Years Ended December 31, 2024 and 2023 The following table presents the period-over-period change for each line item in the Company's consolidated statements of operations for the twelve months ended December 31, 2024 and 2023 .
This 3 year RVO is expected to reduce volatility in RIN pricing for the associated period. On the state level, the economics of RNG are enhanced by low-carbon fuel initiatives, particularly well-established 60 programs in California and Oregon (with several other states also actively considering LCFS initiatives similar to those in California, Washington and Oregon).
On the state level, the economics of RNG are enhanced by low-carbon fuel initiatives, particularly well-established programs in California and Oregon (with several other states also actively considering LCFS initiatives similar to those in California, Washington and Oregon).
(4) This project has provisions that will adjust or “flip” the percentage of distributions to be made to us over time, typically triggered by achievement of hurdle rates that are calculated as internal rates of return on capital invested in the project.
(2) We record our ownership interests in these projects as equity method investments in our consolidated financial statements. (3) This project has provisions that will adjust or “flip” the percentage of distributions to be made to us over time, typically triggered by achievement of hurdle rates that are calculated as internal rates of return on capital invested in the project.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was $5.9 million, a decrease of $214.7 million compared to the $220.6 million provided from financing activities for the year ended December 31, 2022.
Net Cash Provided by Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $83.5 million, an increase of $77.6 million compared to the $5.9 million provided by financing activities for the year ended December 31, 2023.
Cash Flows The following table presents the Company's cash flows for the years ended December 31, 2023 and 2022: Twelve Months Ended December 31, (in thousands) 2023 2022 Net cash provided by (used in) operating activities $ 38,269 $ (1,355) Net cash used in investing activities (74,147) (184,028) Net cash provided by financing activities 5,899 220,550 Net (decrease) increase in cash, restricted cash, and cash equivalents $ (29,979) $ 35,167 Net Cash Provided by Operating Activities Net cash provided by operating activities for the year ended December 31, 2023 was $38.3 million, an increase of $39.6 million compared to net cash used in operating activities of $1.4 million for the year ended December 31, 2022.
Cash Flows The following table presents the Company's cash flows for the years ended December 31, 2024 and 2023: Twelve Months Ended December 31, (in thousands) 2024 2023 Net cash provided by operating activities $ 33,033 $ 38,269 Net cash used in investing activities (134,551) (74,147) Net cash provided by financing activities 83,504 5,899 Net decrease in cash, restricted cash, and cash equivalents $ (18,014) $ (29,979) 69 Net Cash Provided by Operating Activities Net cash provided by operating activities for the year ended December 31, 2024 was $33.0 million, a decrease of $5.2 million compared to net cash used in operating activities of $38.3 million for the year ended December 31, 2023.
The EPA annually sets proposed renewable volume obligations ("RVOs") for D3 (cellulosic biofuel with a 60% greenhouse gas (“GHG”) reduction requirement) RINs in accordance with the mandates established by the Energy Independence and Security Act of 2007. In June 2023, the EPA set RVOs for 2023 through 2025 via a new Set rule.
The EPA annually sets proposed renewable volume obligations ("RVOs") for D3 RINs in accordance with the mandates established by the Energy Independence and Security Act of 2007. In June 2023, the EPA set RVOs for 2023 through 2025 via a new Set rule. This 3 year RVO is expected to reduce volatility in RIN pricing for the associated period.
(3) Although the RNG conversion is completed, it is currently contemplated that the Arbor Hills renewable power plant will continue limited operations on a stand-by, emergency basis through March of 2031. (4) Prince William I renewable power plant discontinued operations in Q1 2024. (5) Prince William II discontinued operations in Q1 2024.
(3) Although the RNG conversion is completed, it is currently contemplated that the Arbor Hills Renewable Power plant will continue limited operations on a stand-by, emergency basis through March of 2031. (4) Construction of the Fall River project has been delayed due to permitting issues.
The RNG Fuel segment includes RNG supply as well as the associated generation and sale of commodity natural gas and environmental credits, and consists of: ◦ RNG Production Facilities – the design, development, construction, maintenance and operation of facilities that convert raw biogas into pipeline quality natural gas; and ◦ Our interests in both operating and construction projects. 61 • Fuel Station Services.
These revenue sources are presented in our statement of operations under the following captions: RNG Fuel The RNG Fuel segment includes RNG supply as well as the associated generation and sale of commodity natural gas and environmental credits, and consists of: ◦ RNG Production Facilities – the design, development, construction, maintenance and operation of facilities that convert raw biogas into pipeline quality natural gas; and ◦ Our interests in both operating and construction projects. 58 Fuel Station Services Through our Fuel Station Services segment, we provide construction and maintenance services to third-party owners of vehicle Fueling Stations and perform fuel dispensing activities including generation and minting of environmental credits.
This is primarily due to an increase in interest expense on the OPAL Term Loan of $3.3 million primarily due to an increase in outstanding debt, $1.2 million on the Convertible Note Payable (we recorded a gain of $2.9 million in 2022) and $0.5 million in commitment fees offset by a decrease of $3.5 million in interest expense on our Senior Secured Credit Facility as the debt was repaid in full in March 2023.
This is primarily due to an increase in interest expense on the OPAL Term Loan of $9.8 million primarily due to an increase in outstanding debt, increase of $1.2 million in commitment and other fees, decrease of $1.0 million in interest income, partially offset by a decrease of $1.6 million on the Convertible Note Payable.
Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2023 was $74.1 million, a decrease of $109.9 million compared to the $184.0 million used in investing activities for the year ended December 31, 2022.
Net Cash Used in Investing Activities Net cash used in investing activities for the year ended December 31, 2024 was $134.6 million, an increase of $60.4 million compared to the $74.1 million used in investing activities for the year ended December 31, 2023.
We base the fair value of our assets or asset groups off of the estimated discounted future cash flows using market participant assumptions. Assets disposed of are reported at the lower of the carrying amount or fair value less selling costs.
We base the fair value of our assets or asset groups off of the estimated discounted future cash flows using market participant assumptions. Alternatively, we use cost approach to measure fair value of our assets or asset groups.
Based on the qualitative assessment, we determined that no impairment is necessary on the goodwill recorded in the books as of December 31, 2023.
As of December 31, 2024, we performed a quantitative assessment for Goodwill in our RNG Fuel segment and determined that there is no impairment necessary on the goodwill recorded in the books as of December 31, 2024.
This was primarily driven by a decrease in cash invested in short term investments of $120.1 million, deconsolidation of VIEs net cash of $11.9 million, an increase in distribution from equity method investment of $2.7 million, a decrease in payments made for the construction of various RNG generation and dispensing facilities of $17.6 million offset by an increase in cash paid for investments in other entities of $7.7 million and the repayment of Note receivable of $10.8 million in the third quarter of 2022.
This was primarily driven by a decrease in cash from sale of short term investments of $45.2 million, higher payments made for the construction of various RNG generation and dispensing facilities in 2024 compared to 2023 of $13.4 million, an increase of $13.3 million in contributions to equity method investments, a $0.5 million decrease in distributions from equity method investments, offset by a decrease from deconsolidation of VIEs of $11.9 million in 2023.
These entities for the year ended December 31, 2023, were Sunoma, Central Valley and Emerald, Sapphire for the first four months of 2023. The entities accounted for as non-redeemable non-controlling interests for the year ended December 31, 2022 were Sunoma, Emerald, Sapphire and Central Valley.
These entities for the year ended December 31, 2023, were Sunoma and Central Valley as well as Emerald, Sapphire for the first five months of 2023. The increase was primarily attributable to higher net income earned by Sunoma.
If applying a quantitative assessment, we would estimate a reporting unit’s fair value based on the income approach. With this approach, the fair value measurement is based on significant inputs that are not observable in the market and thus the fair value measurement is categorized within Level 3 of the fair value hierarchy.
When applying a quantitative assessment, we use a combination of income and market valuation methodologies. Specifically, we employ a discounted cash flow analysis (DCF) and the guideline public company method. This approach results in a fair value measurement based on significant inputs that are not observable in the market, categorizing it within Level 3 of the fair value hierarchy.
Fuel Station Services Cost of sales from Fuel Station Services increased by $16.5 million, or 17%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
The increase was primarily related to start of operations at our Prince William and Polk RNG facilities in 2024. Fuel Station Services Cost of sales from Fuel Station Services increased by $13.5 million, or 12%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Renewable Power Cost of sales from Renewable Power increased by $5.0 million, or 16%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Impairment loss Impairment loss increased by a total of $2.0 million, or 100%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Change in fair value of derivatives, net Change in fair value of derivatives, net decreased by $25.7 million, or 78%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Change in fair value of derivatives, net Change in fair value of derivatives, net decreased by $5.8 million, or 78%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was attributable primarily to a lower gain in the current year associated with the mark-to-market adjustments to the earnout liabilities.
Significant judgment is required when determining asset group composition, during our assessment of relevant events and circumstances, when determining an appropriate discount rate, and when estimating the undiscounted and discounted future cash flows of the asset group. Based on our assessment for the year ended December 31, 2023, there is no impairment recorded on our Plant, Property and Equipment.
Assets disposed of are reported at the lower of the carrying amount or fair value less selling costs. Significant judgment is required when determining asset group composition, during our assessment of relevant events and circumstances, when determining an appropriate discount rate, and when estimating the undiscounted and discounted future cash flows of the asset group.
Income from equity method investments Net income attributable to equity method investments decreased by $0.3 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
This change was primarily due to the impairment of Renewable Energy facility in 2024. 66 Income from equity method investments Net income attributable to equity method investments increased by $7.7 million, or 140%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Impairment of Goodwill When a business is acquired, goodwill is recognized to reflect any future economic benefits that are not separately recognized, such as synergies. For the purposes of impairment testing, U.S.
Generally, the company estimates warranty costs based on historical claims experience, and other factors. Actual warranty claims may differ from the estimates, and adjustments to the liability are made as necessary. Impairment of Goodwill When a business is acquired, goodwill is recognized to reflect any future economic benefits that are not separately recognized, such as synergies.
This reflects the joint venture partners' loss in those entities we sold a portion of our membership interests in certain RNG facilities which are consolidated in our financial statements. The decrease is primarily due to deconsolidation of Emerald and Sapphire which were previously recorded as non-controlling interests but are now accounted for as equity method investments.
This reflects the joint venture partners' 67 income (loss) in certain RNG facilities in which we sold a portion of our ownership interests but are consolidated in our financial statements. These entities for the year ended December 31, 2024, were Sunoma and Central Valley.
Our assumptions include future cash flow projections, a discount rate range based on the weighted average cost of capital, and a terminal value based on a range of terminal earnings before interest, taxes, depreciation, and amortization.
Key assumptions in the DCF projection include growth in RIN prices, future sales volumes based on production capacities, and terminal value based on a range of terminal earnings before interest, taxes, depreciation, and amortization (EBITDA). The future cash flows are discounted to present value using the weighted average cost of capital (WACC) of the company and its closest competitors.
This change was attributable primarily to an increase of $13.4 million of dispensing fees to generate Environmental Attributes, $0.9 million in construction costs, $2.7 million in service related costs offset by decrease in $1.2 million due to lower brown gas pricing.
This change was attributable primarily to a $18.3 million increase in dispensing fees to generate Environmental Attributes, $3.3 million increase in FPA tolling expense, and a $2.0 million increase in Service and maintenance expenses, partially offset by an $11.0 million decrease in construction expense, in line with the decrease in construction revenues.
Interest and financing expense, net Interest and financing expenses, net increased by $2.7 million, or 40%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
This is primarily attributable to Emerald, which had its first full year of operations in 2024 after coming online in the second half of 2023. Interest and financing expense, net Interest and financing expenses, net increased by $10.3 million, or 111%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Selling, general, and administrative Selling, general, and administrative expenses remained flat for the year ended December 31, 2023 compared to the year ended December 31, 2022. Depreciation, amortization, and accretion Depreciation, amortization, and accretion expense increased by a total of $1.4 million, or 11%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Depreciation, amortization, and accretion Depreciation, amortization, and accretion expense increased by a total of $3.3 million, or 23%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily due to new RNG facilities and OPAL owned dispensing stations, both starting operations in 2024.
Project development and start up costs Project development and start up costs decreased by $1.6 million or 24%, for the year ended December 31, 2023compared to the year ended December 31, 2022. This is primarily due to decrease in virtual pipeline costs incurred on New River in 2022 which were not incurred after first quarter of 2023.
Project development and start up costs Project development and start up costs increased by $14.2 million or 293%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This is primarily due to a $13.9 million increase in virtual pipeline costs for Prince William and ITC transaction related expenses.
This is primarily due to a decrease of $7.1 million in pricing and $0.5 million due to decrease in volumes relating to brown gas sales. The revenues from sale of Environmental Attributes remained flat year over year as lower RIN pricing was offset by higher volumes of sales.
This is primarily due to a $21.1 million increase in Environmental Attributes, driven by $9.1 million of higher price and $12.0 million from increased volume, primarily from commencement of operations at Prince William and Polk. Revenue from Brown Gas Sales increased $0.5 million, also primarily due to the impact of Prince William and Polk coming online in 2024.
This was primarily due to a decrease of $138.9 million from closing of the Business Combination and $100.0 million decrease from proceeds from issuance of Redeemable Preferred Units to NextEra in the prior year, the repurchase of $16.4 million of shares of our Class A common stock in connection with the exercise of the put option and decrease of $10.4 million proceeds from non-redeemable non-controlling interests.This was offset by an increase in proceeds of $144.1 million from OPAL Term Loan post amendment in September 2023, accompanied by repayment of existing balance of $87.6 million on the OPAL Term Loan, Convertible Note Payable of $30.1 million and paid-in-kind preferred dividends of $16.6 million.
This increase was primarily driven by an increase of $158.9 million due to lower repayments on the Senior Secured Facility, the Convertible Note payable and OPAL Term Loan facilities in current year, an increase of $16.4 million due to no payment on termination of put options in current year, an increase of $3.4 million due to lower preferred dividend payments in the current year, offset by a $87.2 million decrease in proceeds from the OPAL Term Loan, net of issuance costs, decrease in proceeds from non-controlling interests of $12.8 million, and a decrease of $0.8 million in reimbursement of financing costs by a joint venture partner.
Renewable Power Revenue from Renewable Power increased by $9.8 million, or 22%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Renewable Power Cost of sales from Renewable Power decreased by $4.1 million, or 11%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This savings is primarily related to converting some of our projects from Renewable Power facilities to RNG facilities.
As of December 31, 2023, we had total indebtedness excluding deferred financing costs of $209.1 million which primarily consists of $186.6 million under the OPAL Term Loan and $22.5 million under Sunoma Loan.
As of December 31, 2024, Sunoma is in compliance with the financial covenants under the Sunoma Loan Agreement. As of December 31, 2024 and December 31, 2023, the outstanding loan balance (current and non-current) excluding deferred financing costs was $20.8 and $22.5 million, respectively.
Removed
Recent developments Inflation Reduction Act The Inflation Reduction Act (the "IRA") was signed into law on August 16, 2022. The bill invests nearly $369 billion in energy and climate policies. The provisions of the IRA are intended to, among other things, incentivize domestic clean energy investment, manufacturing, and deployment.
Added
Recent Developments Wasatch Resource Recovery Facility On March 17, 2025, Fortistar, through its subsidiary Wasatch RNG LLC (“Wasatch RNG”), acquired all of the limited liability company interests outstanding in Alpro SD, LLC (“Alpro” and such acquired interest, the “Alpro Interest”).
Removed
The IRA incentivizes the deployment of clean energy technologies by extending and expanding federal incentives such as ITCs and the PTC. We view the enactment of the IRA as favorable for the overall business climate for the renewable energy industry.
Added
Alpro owns a 50% limited liability company interest in Wasatch Resource Recovery, LLC (the “Project” or “Wasatch” and such ownership interest, the “Wasatch Interest”) and a 50% tenancy-in-common interest in certain real estate and operating assets used by Wasatch (the “Project Interest”).
Removed
However, there is uncertainty related to the applicability of the IRA to our current and planned projects and the scope of the IRA and its interpretations may change if there is a change in the U.S. administration or if government agencies’ authority to interpret federal law is restricted as a result of the Supreme Court’s review of the Chevron doctrine under which federal government agencies have been awarded board authority to interpret broad or ambiguous legislation.
Added
As a result of the acquisition, Wasatch RNG has the option to increase the Wasatch Interest and the Project Interest. The Project captures and converts biogas generated from food waste to produce pipeline quality renewable natural gas (RNG). The Project generates revenue from long-term contracted gas sales, tipping fees, and digestate (fertilizer) sales.
Removed
We may also continue to experience a delay in our sales cycles and new award activity as our customers consider the applicability of the IRA and as financing projects may take longer as 56 result of this uncertainty.
Added
The conversion of food waste to RNG presents a potential growth and diversification opportunity for OPAL Fuels. 53 In connection with the acquisition, Fortistar Services 2 LLC and OPAL Fuels LLC entered into an amendment to its existing Administrative Services Agreement, pursuant to which OPAL Fuels will provide certain services to Wasatch RNG in exchange for certain agreed upon fees and expense reimbursements.
Removed
The IRA may increase the competition in our industry and as such increase the demand and cost for labor, equipment and commodities needed for our projects.
Added
These services include oversight of the plan to improve the operations and productivity of the Project. Additionally, Wasatch RNG and OPAL Fuels entered into an Option Agreement, pursuant to which Wasatch RNG granted an option to OPAL Fuels to purchase the Alpro Interest.
Removed
On November 17, 2023, the Treasury and the IRS proposed regulations regarding ITCs on renewable energy projects where IRS specified certain types of RNG equipment are ineligible for ITCs which could negatively impact the profitability of our RNG business and our ability to finance our RNG projects.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAny realized or unrealized gains or losses from our derivative transactions 72 are reported within corporate revenue and other income/expense in our consolidated financial statements. For information about our gains or losses with respect to our derivative transactions and the fair value of such financial instruments, see Note 9.
Biggest changeAny realized or unrealized gains or losses from our derivative transactions are reported within corporate revenue and other income/expense in our consolidated financial statements. For information about our gains or losses with respect to our derivative transactions and the fair value of such financial instruments, see Note 9. Derivative Financial Instruments and Fair Value Measurements, to our consolidated financial statements.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is not required to provide the information required by this Item as it is a “smaller reporting company.” However, we note that we are exposed to market risks related to Environmental Attribute pricing, commodity pricing, changes in interest rates and credit risk with our contract counterparties.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is not required to provide the information required by this Item as it is a “smaller reporting company.” However, we note that we are exposed to market risks related to Environmental Attribute pricing, commodity pricing, 70 changes in interest rates and credit risk with our contract counterparties.
Removed
Derivative Financial Instruments and Fair Value Measurements, to our consolidated financial statements.

Other OPAL 10-K year-over-year comparisons