OPAL Fuels Inc. Q4 FY2024 earnings call

• 2024 was a strong year with adjusted EBITDA of $90 million in line with guidance. Brought online three large landfill RNG projects in 2024. - Went from 2 operating landfill RNG facilities in 2022 to 11 in 2024, tripling annual design capacity in operation and more than doubling production and adjusted EBITDA. - Hired Kazi Hassan as Chief Financial Officer and Daryl Burke as EVP of Biogas Operations. - Bullish on RNG as an American biofuel, citing stable feedstock and cost-effective technology, aligning well with other American liquid biofuels within the RFS and other public policies.

Fuel Station Service Segment: In 2024, EBITDA was $40.2 million, 76% higher than 2023, and within the guidance set for the segment. RNG Fuel Production: 2024 production was 3.8 million MMBtus, up 41% from 2023 but slightly behind guidance of 4.0. The company brought online three large landfill RNG projects in 2024, totaling 3.8 million MMBtus of annual design capacity. Renewable Power: 2025 adjusted EBITDA is expected to decline by approximately $10 million versus 2024 due to Europe no longer certifying US biogas for its regulatory programs.

• Full-year 2025 adjusted EBITDA is expected to be between $90 million and $110 million. - RNG production is expected to range between 5 and 5.4 million MMBtus. - Fuel station services adjusted EBITDA is expected to grow 30% to 50% in 2025 versus 2024. - Expects approximately $50 million of expected ITC sales in 2025 compared to ~$9 million in 2024. - Renewable Power adjusted EBITDA is expected to decline by about $10 million in 2025 versus 2024 due to Europe not certifying US biogas for regulatory programs.

• Regulatory uncertainties: Europe not certifying US biogas for regulatory programs impacts the Renewable Power segment. - Ramp-up issues: Longer ramp-up timelines at newly commissioned RNG facilities affected 2024 production. - Market volatility: Fluctuations in RIN prices and tightness in the dispensing market can affect financial performance.

Q: Focus on production guidance and Q4 design capacity. How does the trajectory look for Q1 and Q2?

A: Adam and Jonathan discuss expected sequential upticks throughout the year as they move through ramp-up issues and increasing utilizations from facilities.

Q: Thoughts on the competitive landscape and M&A opportunities?

A: Jonathan mentions primary growth from existing projects and evaluating M&A opportunities as they arise.

Q: PTC and 45Z in 2025 guidance. What's the timeline for resolution?

A: Adam discusses expected resolution of PTC and 45Z rule shortly after the final comment period.

Q: Tightness in the dispensing market. What are the drivers?

A: Adam talks about RNG supply growth vs offtake, fifteen-liter engine adoption, and regulatory factors affecting fleet purchasing.

Q: CapEx and tariffs. Impact on RNG build-out and fuel station services?

A: Jonathan discusses minimal impact of tariffs due to projects committing to equipment upfront and focus on domestic content for ITC rules.

Q: Project development and growth vs capital preservation. Any slowdown?

A: Adam states no slowdown in early development activity and flexibility in capital allocation to create discretionary free cash flow.