Q3 2025 Clean Energy Fuels Corp Earnings Call

Speaker #4: If you need assistance during your conference today , please press star Zero . Good day everyone , and welcome to today's Clean Energy third Quarter 2020 Earnings Conference Call .

Speaker #4: At this time , all participants are in a listen only mode . Later , you will have the opportunity to ask questions during the question and answer session You may register to ask a question at any time by pressing star one on your telephone keypad .

Speaker #4: Please note this call is being recorded . I will be standing by if you should need any assistance . It is now my pleasure to turn the conference over to Robert Vreeland Chief Financial Officer .

Speaker #4: Please go ahead .

Speaker #5: Thank you . Operator . Earlier this afternoon , Clean Energy released financial results for the third quarter ending September 30th , 2025 . If you did not receive the release , it is available on the Investor Relations

Speaker #5: section of the company's . website , where the call is also being webcast . There will be a replay available on the website for 30 days .

Speaker #5: Before we begin, we'd like to remind you that some of the information contained in the news release and on this conference call contains forward-looking statements that involve risks, uncertainties, and assumptions that are difficult to predict.

Speaker #5: Such forward looking statements are not a guarantee of performance , and the company's actual results could differ materially from those contained in such statements .

Speaker #5: Several factors that could cause or contribute to such differences are described in detail in the risk Factors section of Clean Energy's form 10-q filed today .

Speaker #5: These forward looking statements speak only as of the date of this release . The company undertakes no obligation to publicly update any forward looking statements or supply new information regarding the circumstances after the date of this release .

Speaker #5: Company's non-GAAP EPs and adjusted EBITDA will be reviewed on this call , and exclude certain expenses that the company's management does not believe are indicative of the company's core business operating results .

Speaker #5: non-GAAP financial measures should be considered . In addition to results prepared in accordance with GAAP , and should not be considered as a substitute for or superior to GAAP results .

Speaker #5: The directly comparable GAAP information reasons why management uses non-GAAP information A definition of non-GAAP EPs and adjusted EBITDA , and a reconciliation between these non-GAAP and GAAP figures is provided in the company's press release , which has been furnished to the SEC on form 8-K today .

Speaker #5: With that , I will turn the call over to our president and Chief Executive Officer , Andrew Littlefair . Thank you . Bob .

Speaker #5: I'm pleased to report .

Speaker #6: That our business delivered another strong quarter for the third quarter . We posted 106 million in revenue . Sold 61 million gallons of renewable natural gas and generated $17 million of adjusted EBITDA .

Speaker #6: We ended the quarter meeting our expectations in line with the raised guidance for 2025 that we announced in August , with 232 million in cash and short term investments and maintaining a strong balance sheet with financial flexibility and capacity to fund growth .

Speaker #6: Today , I will provide updates on our downstream fueling business , our opportunity in the heavy duty truck sector and progress in our upstream RNG production business .

Speaker #6: I'll let Bob provide more detail on our financials and our reaffirmed full year outlook . Our downstream fueling business continues to perform well .

Speaker #6: Transit and refuse remain steady contributors , reflecting long standing customer relationships . And our ability to deliver clean , affordable fuel day in and day out .

Speaker #6: For over two decades . Natural gas trucks and buses have delivered cleaner air and lower ample emissions to these fleets , and the cities they serve on the review side , we currently have 140 different companies , ranging from national leaders like W.M.

Speaker #6: and Republic Services . Many regional companies around the country . 309 fueling sites . And we feel the buses of transit agencies from New York City to L.A.

Speaker #6: and many in between . We are well positioned to support additional fleets and their adoption of ultra clean RNG , clean energy also continues to support transit agencies that are following California state incentives to explore hydrogen alongside RNG .

Speaker #6: In late September , we announced we were awarded the contract to design , build and maintain a second hydrogen fueling station for Foothill Transit .

Speaker #6: This extends our 20 plus year partnership with the agency and complements the RNG fueled fleet . Foothill already operates . The new site will support an initial 19 hydrogen fuel cell buses .

Speaker #6: We've also won awards to build hydrogen stations for the cities of Riverside and Ventura, as well as for transit agencies. The largest opportunity for our downstream fueling business continues to be heavy-duty trucking.

Speaker #6: Approximately 250,000 new class eight heavy duty trucks are sold each year in the US and Canada . Heavy duty sector is tasked with providing critical goods and services across our economy .

Speaker #6: Meanwhile , the sector has been facing challenging freight rates . Certainly uncertain policy , regulations and continued demand from shippers . The lower emissions in this hard to decarbonize segment of the value chain .

Speaker #6: As you know , overall sales of heavy duty trucks has been significantly lower over the last year or two . Compared to most years .

Speaker #6: Battery electric and hydrogen face significant challenges for heavy duty trucking RNG , on the other hand , is low NOx and has low to negative greenhouse gas emissions .

Speaker #6: It does this at a lower cost of ownership than even diesel engine technology infrastructure and reliable supply of clean fuel are here today .

Speaker #6: And a clean energy . We are pursuing this opportunity on multiple fronts . In September , Pioneer Clean Fleet Solutions launched as the first leasing company focused on low carbon , heavy duty vehicles with next generation CNG trucks .

Speaker #6: As the focus . Clean energy alongside Cummins and Hexagon , agility partnered with pioneer to support another pathway that lowers barriers for fleets to adopt RNG powered equipment .

Speaker #6: Just last week, we expanded our Class A demo truck program with a 2026 Freightliner Cascadia Gen Five day cab equipped with a Cummins X15N.

Speaker #6: Our truck was unveiled at the American Trucking Associations conference to high praise from the senior editor of Transport Topics, the leading trucking publication, who did a test drive. The demo truck will rotate among carriers so they can experience the X-15.

Speaker #6: N's performance across real routes in our fueling network . This builds on the success of our first Peterbilt X15 n demo launch last year , and that continues to be in rotation around the country since Freightliner has the largest overall market share in the heavy duty space , the demand to get in the queue for this new demo truck has been very high .

Speaker #6: Turning to our upstream RNG production business , while our one mile Rin pricing has stabilized , Lcfs credit prices continue to face some headwinds impacting segment profitability .

Speaker #6: We expect Carb's program changes which are already in effect , to tighten the market , to tighten the market and support gradual price improvement in 2026 and beyond .

Speaker #6: The 45 Clean fuel production credit is an important value driver for dairy RNG that recognizes the fuel's negative emissions benefit . We continue to await Treasury's finalization of the 45 rules and credit values , which we expect in the next few months , we plan to begin to monetize our 20 2545 credits once those rules are finalized .

Speaker #6: Meanwhile , we are controlling what we can control project execution and production improvement . I'm pleased to report that our two largest dairy projects , one in Texas and one in Idaho , have recently been begun .

Speaker #6: Initial operations . We would will be announcing more specifics soon about these exciting developments . This brings our total projects and operation to eight .

Speaker #6: We continue to be focused on optimizing production across our portfolio to increase our own supply of negative carbon RNG for our network . 100% of the fuel that we sell in California's RNG and the average carbon intensity score of that fuel is a minus 194 .

Speaker #6: So that's impressive . In addition , we broke ground on three new dairy RNG projects under our development agreement with MOS Energy Works .

Speaker #6: These projects span six dairies across South Dakota , Georgia , Florida and New Mexico and are expected to produce 3 million gallons of RNG annually .

Speaker #6: Once fully operational . In summary , our business fundamentals remain solid . The downstream fueling business is steady and well positioned for growth .

Speaker #6: And on the upstream side , we're executing and scaling clean energy is a positioned with the largest RNG fueling network , a substantial supply of RNG from our own operations and from third parties and a team that knows how to deliver for our customers .

Speaker #6: We believe our formula of practical decarbonization at a lower cost per mile than diesel will continue to resonate with fleets and shippers that need solutions that can deploy today.

Speaker #6: And with that , I'll hand the call Bob .

Speaker #5: Thank you , Andrew , and good afternoon to everyone . The third quarter of 2025 was another good quarter . On 106.1 million in revenue , versus 104.9 million a year ago .

Speaker #5: Last year's revenue included 6.4 million in alternative fuel tax credit revenues and the alternative fuel tax credit is not in place

Speaker #5: for 2025 as it back to was not extended past 2024 , so putting the alternative fuel tax credit aside , the increase in revenues over last year's third quarter was 8% , primarily driven by increases in fuel sales , along with a rise in station construction sales .

Speaker #5: On a GAAP basis, our net loss for the third quarter of 2025 was $23.8 million, compared to $18.2 million in 2024. The 2024 net loss benefited from $6.4 million in Alternative Fuel Tax Credits.

Speaker #5: Not applicable to 25 . And our . And as well our 2025 GAAP net loss included $3 million in net incremental costs for a couple one time items , one of those being $5 million in incremental accelerated depreciation expense .

Speaker #5: That was tied to our pilot stations . Bringing that total depreciation charge in line with our initial estimates . And the second one time item was a $2 million non-operating gain from the liquidation of a non-core investment .

Speaker #5: These two items did not impact adjusted EBITDA . Speaking of which , our adjusted EBITDA for the third quarter of 2025 was $17.3 million and reflects similar and steady trends from our recent second quarter of 2025 .

Speaker #5: With good fuel and service margins , plus an improvement in our upstream dairy negative adjusted EBITDA last year . Adjusted EBITDA of 21.3 million .

Speaker #5: Of course , includes the 6.4 million of alternative fuel tax credits when excluding the Alternative fuel tax credits from 20 for the improvements in 2025 over 24 .

Speaker #5: Continue to come from greater fuel volumes , including both conventional natural gas and RNG , particularly a higher concentration of low CI dairy RNG , along with lower operating expenses from a year ago .

Speaker #5: Third quarter . These improvements helped to offset the effects of lower Rin pricing from a year ago , where you can see the Rin revenue was down 2.8 million versus last year .

Speaker #5: We generated cash flow from operations again in the third quarter , and our cash and balance of 232 million that , Andrew mentioned is our balance .

Speaker #5: After making a $12 million contribution of capital into our dairy RNG joint venture with Ma energy Works in the third quarter . And lastly , you'll note that we maintained our 2025 outlook , which we had raised back in August , and we feel good .

Speaker #5: We feel that we're in good shape and maintaining that outlook. And with that, operator, we can open the call to questions.

Speaker #4: At this time . If you would like to ask a question , please press star one on your telephone keypad . You may remove yourself from the queue at any time by pressing star two .

Speaker #4: Once again , that is star one . To ask a question . We'll take our first question from Eric Stein with Craig-hallum . Your line is open .

Speaker #4: Please go ahead .

Speaker #7: Hi , Andrew . Hi , Bob .

Speaker #6: Hi , Eric .

Speaker #7: Hey . So maybe just starting with the the RNG upstream business . So it sounds like you've got eight operating right now . Can you just give us kind of the the thought or target maybe run rate of volumes that you expect to exit 25 .

Speaker #7: And you know , as you think about this longer term , I know that market has changed a bit . You've got a lot of supply from third party sources , you know , so just kind of curious how you think about that when you look out multiple years , you know , at one time you had a pretty high target for what you might ultimately produce upstream .

Speaker #7: Curious where that stands now , right .

Speaker #6: So , you know , you'll you're bringing up the production rates of the five that came online . We call them the NewCo projects .

Speaker #6: But you'll exit the year somewhere between 5 and 6 million gallons. And next year you'll be close to doubling it.

Speaker #6: And you know , eventually you'll be closer to 20 million gallons . Once those those projects come on . And now I'm going out .

Speaker #6: That's once those projects are on . And so now I'm going out to 20 , 27 , you know , Eric , you're referring to what we came out with almost five years ago .

Speaker #6: Four and a half years ago . The 100 million gallons , which , by the way , would have taken another 1.2 or $4 billion .

Speaker #6: And , you know , we pulled that back long ago when we looked at , you know , the credit pricing and some of the current situation .

Speaker #6: But what I will say is , you know , we like where we are . We like , you know , having that amount of fuel that we control .

Speaker #6: But , you know , we're very big in the business , as you well know . And , you know , we have 80 to 90 different suppliers .

Speaker #6: So we we remain we're moving still about half of all the RNG into transportation in the industry . We continue to be at the focal point of that .

Speaker #6: Everyone that needs RNG in a transportation often has to come to us . So we like our position . We feel like we've made prudent investments to this point .

Speaker #6: You know , we have to get those up and running correctly . We're starting to see an improved production rates , which will continue to get better and better .

Speaker #6: And we're starting to feel much better about those early projects . We take great heart in looking at the production that's going on at our first project , Del Rio , that's been up and running a while , and that thing is hitting nameplate and it's doing very well .

Speaker #6: We're very proud of that , and we're seeing we're beginning to start seeing some significant increases in production at the others . As I mentioned in my prepared remarks , Eric , you know , our two biggest projects , one of which we own 100% of their just now beginning to inject .

Speaker #6: So those are big . One of those produces somewhere around 5 million gallons . And the other around 3.6 million . And they're just now coming on .

Speaker #6: So we like where we're where we are . And you know , we'll see how that how that all plays out as these , they develop here in 26 and in 27 .

Speaker #7: Yep . Thanks for that . And you mentioned I know last quarter or earlier in the year , you know , you'd kind of set it as an objective to improve the performance at the plants .

Speaker #7: And you have made progress . You did mention that you've got a few more steps to go . I mean , any clarity there , I would assume , or should we assume that those are pretty much you just kind of have to go through steps .

Speaker #7: It takes time rather than being something that's a significant investment .

Speaker #6: That's right , that's right . It's fine tuning . It's it's working with the farmer . It's all those things there aren't big CapEx requirements to to get them right .

Speaker #6: It's really just kind of bringing it along , getting the team working . Exactly right . So it and , you know , going through the first winter and figuring out where certain other items need to be winterized , it's kind of mundane things , but they're important .

Speaker #6: And and what's , what's interesting , Eric , is you really do tune them up from kind of when they first come on , they're more like producing about half of what you thought .

Speaker #6: And next thing you know , they're at 70 , 75 . But they will they will begin to pull on up to nameplate .

Speaker #7: Got it . Last one for me . Just I know it's early days still , but the pioneer clean Fuel solutions just any thoughts on initial interest ?

Speaker #7: You know what you think that might do to spur X , x15 and adoption ? You just kind of initial impressions ?

Speaker #6: Well , I'm told , you know , look , I love having another interested party out working . You know , with our customers and with potential customers .

Speaker #6: I think that's really powerful . We know this crowd . I like the fact that we're engaged in , you know , standing that company up alongside Cummins and Hexagon agility .

Speaker #6: I think that's good alignment for us . I'm told they have their first deal in the works . I'm not going to say any more than that , but they have maybe their first paper out circulating and that they've already made had meetings with 20 different fleets .

Speaker #6: I think they did some , you know , showed the flag pretty well down there in San Diego . The ATA . So I like the fact that you have very focused group working just on RNG , just on natural gas trucks , understands the nuance there on leasing .

Speaker #6: And so we're working hard hand in glove with them . Our sales team . And as , as is hexagon and coming . So we'll see how they do .

Speaker #7: Okay . Thanks .

Speaker #4: Our next question comes from Rob Brown with Lake Street Capital Markets . Please go ahead .

Speaker #8: Good afternoon . Just sticking with the sticking with the 15 liter kind of ramp rates and how that's developing in the market . Good .

Speaker #8: Good to see the pioneer project . But but what what's sort of the other sort of timeline . And development of the 15 liter ramp .

Speaker #8: How do you see it at this point with with sort of the market environment today ?

Speaker #6: Well , I think , you know , there's there's been , you know , as I mentioned in my prepared remarks , I mean , the , the , the market has not been exactly favorable .

Speaker #6: Right . The freight rate thing is real . That's a real overhang in the in the trucking business . And it is affected .

Speaker #6: Right . You know , it is affected . Purchases of new trucks . So you know that's just something you you wish can get worked off .

Speaker #6: I think you're going to have , you know , softer rates that will begin to firm . But but as I read the material , it looks like that could take a good part of 2026 .

Speaker #6: So that's just a , you know , some headwinds there that I'd rather not have . It's hard to get people to make a move toward , you know , not only buying new equipment , but buying new , new technology , you know , when they're worried about tariffs and import duties and supply chain and , and their freight rates having said that , I think that that most in the industry have seen that there's kind of a shaking out .

Speaker #6: I mean , as you take stock of what occurred down there in the atta conference in San Diego , I mean , it's clear that that there's been a sorting out of the technology .

Speaker #6: I mean , look , I'm not wishing ill on anything , but I think that the electric and the hydrogen technologies really have gotten knocked down a peg because of their reliance on certain of the , you know , regulations and and .

Speaker #6: , and such . And certainly at the Now , federal level . And , and so now it's very clear that the if you're a trucker , you have diesel , renewable diesel , or you have RNG and , and what's , what's coming through is Rob , that the fleets and the shippers still want sustainability , still want to be green , still want to decarbonize , but it has to make economic sense .

Speaker #6: That's what's different now is that this has to stand on its own bottom . Now , the good news for us is we have a technology and we have an engine that's here today and can be delivered today .

Speaker #6: That can give returns . I mean , with our fuel pricing and with the economic associated with the incremental cost , we can get these fleets a two year payback , two and a half year payback on the equipment , and then they really have significant savings as they keep that truck , you know , up to the typical five years .

Speaker #6: So we like our positioning from that point of view . Now , we've had fleets such as Walmart , Amazon , UPS , Fedex , Sia , Knight-swift Food Express .

Speaker #6: I mean , they've all purchased the new X15 in , so I like the breadth . Now we need more to acquire and we need those fleets to really engage fully .

Speaker #6: But we're seeing some breadth of people beginning to take that in and get comfortable with it. And then we hope there will be those kinds of fleets that buy a lot of trucks.

Speaker #6: We hope that as they like what they've got and they're operating well , that we'll see increased adoption in the coming years . But , you know , we're working hard with making sure that that we're getting good exposure to the X-15 in with the largest fleets in America .

Speaker #6: And so far , most of them have taken some .

Speaker #8: Okay , great . Thanks for all the color there . And then then on the on the mass energy development agreement , how much is the CapEx requirement on your side for the for the three facilities ?

Speaker #8: And then I guess what sort of the pipeline on the Moss side that you could see additional facilities on.

Speaker #6: Hold on what we had .

Speaker #5: It's about 35 .

Speaker #6: Yeah . 36 . 30 .

Speaker #5: 35 million that we've spent 12 over in the third quarter .

Speaker #8: Okay , good . And then just in terms of the additional potential projects with Moss , is there is there still a pipeline there or or do you feel like this is sort of it for for what you see right now ?

Speaker #6: Well , Darrell's a busy guy . So , you know , we we've got those projects that I mentioned , the , three projects we constantly work with Darrell to , to see , you know , there's a couple others that we had looked at very closely , but just with the given credit situation , you know , they didn't they didn't sing quite like we'd like .

Speaker #6: And and Darrell understood that . So we'll continue to look at those . And we like the fact that he's a very good operator and brings these projects on quickly .

Speaker #6: And efficiently . So we'll see .

Speaker #5: Yeah . And we'll have about well , for this , what we have in front of us . So 35 was in the cards for this year , but we'll have about 85 million in total .

Speaker #5: Total .

Speaker #6: Yeah .

Speaker #5: For the plan that's in front of us with him .

Speaker #8: Okay . Great . Thank you . I'll turn it over .

Speaker #4: Our next question comes from Derek Whitfield with Texas Capital. Please go ahead.

Speaker #9: Good afternoon. Congratulations on a solid update, guys.

Speaker #5: Thank you .

Speaker #9: Maybe starting with the downstream you guys announced a flurry of supply agreements last week . Could you speak to to what led to that step change in activity .

Speaker #9: And when those volumes will start to flow through ?

Speaker #6: Well , you know that . You know , in many ways , you know , we have hundreds and hundreds of customers , right ?

Speaker #6: So at any given time , while we don't always announce all of them , because sometimes they're , you know , they're just , you know , they're they're not as glamorous , let's say , you know , every , every year we have a couple hundred different customers that grow their fleet and renew contracts with us .

Speaker #6: And so you're getting a little bit of that mix in there . Now , there were some wins . But but I want to say that when you have the size of the network and the , you know , the fact that we have about 8 or 900 customers under contract , there's a lot activity kind of constantly we had some extra transit properties in that , in that release .

Speaker #6: But we have a we have quite a few new refuse customers and additions coming up right now . So I don't know if there's some , you know , sea change that just happened .

Speaker #6: It's just kind of the way our cycle tends to ebb and flow . But you know , I do like the fact that we have a lot of activity and , you know , that that makes me , you know , makes us feel optimistic about these fleets as they continue with the program .

Speaker #9: Great . Understood . And then regarding the two larger projects that you guys have just brought on , could you offer maybe some directional thoughts on the timing of certification of environmental attributes , including Lcfs and 45 credits ?

Speaker #9: I know that the Lcfs backlog was quite extensive . At one point , but just where is that today ? Where does that sit .

Speaker #6: Today ? You know , these these . Let me handle it this way . And if I get too far out , someone will jump in here and save me .

Speaker #6: But you know , these things take a while to really get up . And so there's kind of a process for them to be , to get into revenue production .

Speaker #6: I mean , we're just we're just now kind of taking care of the commissionings . I mean , the Texas property is a few weeks ahead of the Idaho property after about a month of operations .

Speaker #6: And so the EPA has been pretty . Is pretty fast . After 2 or 3 weeks time . Often that we're able to begin to certify , to be able to get the ruins .

Speaker #6: Now , the Lcfs there's a there's a provisional and a and another kind of . Certification . Where at some point after time , we begin to , you know , participate .

Speaker #6: And I guess collect at about a minus one 50 . Right . And then eventually over time , we get the final processing from California , the lcfs .

Speaker #6: But that that has taken on our Del Rio project , the better part of almost two years now , we think that that backlog is has gotten corrected .

Speaker #6: Some , but I would say by the time you're really , you know , hitting your stride and all buttoned up with with the certification process , I mean , it's a better part of 2026 for these projects before you really done with that .

Speaker #6: Now you'll be receiving a credits and being able to monetize credits , but not at their full potential .

Speaker #9: Understood . Thanks for your time , guys .

Speaker #6: Okay .

Speaker #5: Thank you .

Speaker #4: Our next question comes from Matthew Blair with TTF . Please go ahead .

Speaker #9: Thank you and good afternoon . And congrats on the strong results in the third quarter . You mentioned that you kept your 2025 EBITDA guide intact , which , if I'm doing the math right , implies I think it's 8 to 13 million for the fourth quarter , even though the fourth quarter tends to be pretty strong for for clean .

Speaker #9: So I guess how how should we think about this ? I think in the past you've been reluctant to to change your guide so late in the year and effectively provide single quarter guidance .

Speaker #9: But I guess , is it fair to think that there might be some upside to the to the 2025 targets ? Or how should we think about that here ?

Speaker #6: You know , probably right . I mean , you know , as you look at it , it looks like , you know , it looks like that we should we're doing well .

Speaker #6: I don't I don't think it's I don't think we're in a position to really , you know , now pick it up that that , you know , at this point .

Speaker #6: But I think as you're looking at it , you're saying these guys are going to be certainly on the top end of the guidance or maybe a little bit beyond that .

Speaker #6: I mean , that that's reasonable . If you thought that way and , you know , we'll see how how it performs . There's a lot of things at work here .

Speaker #5: But I mean , I .

Speaker #6: Think that's how I feel too .

Speaker #5: And we kind of agree that at that point , maybe you're micromanaging a quarter . Yeah . And I think we feel good with that range that we put out there .

Speaker #5: And where we sit right now to , be comfortable with that . And but we weren't going to we're not going to micromanage it .

Speaker #9: Sounds good . And then just looking at your RNG volume growth this year , it's been a little variable . I think in the first quarter it was down 13% year over year .

Speaker #9: Second quarter up eight, this quarter up three, I guess. Could you help us understand why it has been so variable? Is that due to the supply that's coming to clean?

Speaker #9: There's some variability in those volumes or . Well , are there .

Speaker #5: Other . There was Matthew . There certainly was in the first quarter right where there was cold spells throughout the country and all the RNG producers , the dairy producers were , you know , having execution difficulties because of that cold weather .

Speaker #5: So that you saw a bit of a drop and then and then there was a bit of a rebound in the second quarter .

Speaker #5: We also have the the , the biogas reform where gas was was held at year end . So then , then that kind of floods in , it came in .

Speaker #5: Well , in the second quarter we had an uptick primarily from the from the cold weather in the first quarter . And so that was a little bit distorted in terms of its growth .

Speaker #5: And then I think the third quarter , our third quarter here was , you know , maybe a little bit more normalized , if you will .

Speaker #5: So you got yeah . So there's some variations in there .

Speaker #4: Our next question comes from Betty Zeng with Scotiabank . Please go ahead .

Speaker #10: Thanks . Good afternoon . Thanks for taking my question . I first wanted to ask about maybe if you could give us a preliminary look at expectations for 2026 .

Speaker #10: And in particular , if you could speak to volumes , should we expect a pretty big step up given the your production of RNG , that that's ramping up ?

Speaker #10: And as well , should we be accounting for the X-15 gallons , or is it still too early for that ?

Speaker #6: Betty , I you know , we're not going to , you know , it's history is the guide . We're not going to share today or set our guidance for 2026 .

Speaker #6: I mean . I think if you go back and listen to what I said earlier on this call , I gave about as much guidance as we're going to give on RNG from our end .

Speaker #6: Right . And so , you know , in the scheme of things , it's a it's a nice it's . Nice growth from our , you know , from from where we've been to where we're going next year .

Speaker #6: But it's not it's not you know step change type thing . But go back and listen to that . I mean basically what I said , we're exiting the year around four to 5 to 6 .

Speaker #6: And that it'll get close to doubling . Right . That's from our RNG production . So that kind of gives you a thought for that .

Speaker #6: You know , the adoption is hard to tell . Betty and I don't have a crystal ball here . And I don't , you know , over the years we've always we've liked we've worked hard to be in the high single digits .

Speaker #6: But you know , it's just it's I think it's too hard to tell exactly how the adoption rate for the X15 is going to be for , for , you know , as I sit here today for next year , over the course of the last several years with the nine liter Cummins and we we have seen dramatic adoption rates over time .

Speaker #6: But it takes time . And you're kind of in the early phase of that with the x-59 . And there's a lot of uncertainty and people , you know , with regulations in California and the federal government .

Speaker #6: And so there's a lot , lot at work yet , you know , we feel optimistic that you're getting the right fleets experiencing with it to get to , you know , to to get to increased rates of , of adoption .

Speaker #6: But I guess I'm crawfishing around . Betty's . No , I'm not going to give you the exact growth number , but but it'll be , you know , we should see increased rates of adoption in 2026 .

Speaker #6: Let's put it that way . But of course , you're coming off of low levels of adoption right now in the X-15 in .

Speaker #10: Okay . Fair enough for my follow up , I wanted to ask about the fuel margin . Looking forward to the next several periods .

Speaker #10: Our view is that the WTI to Henry Hub spread should narrow or may narrow . So I just wanted to get a sense of how clean energy is able to kind of manage the fuel margin .

Speaker #10: What leverage could you pull on that end?

Speaker #6: Well , we Bob and I watched that as well , you know , very closely . And as you know that there's been a nice fuel margin throughout most of 2025 .

Speaker #6: That's narrow not only is it going to narrow , it has narrowed some from kind of historical , you know , differentials . The oil and gas spread to where you are today .

Speaker #6: Right . You have $4 $0.25 gas and $60 , you know , little more oil . So you've come down to 15 one .

Speaker #6: Now we we tend to think , Betty , that that will be that's that mid-teens to 15 , 16 , 17 to 1 is probably a good spread .

Speaker #6: And and with that we're in . That's good for us . That's very good for us . And we can maintain the kinds of fuel margins that we've seen this year in that .

Speaker #6: Now , you know , what's difficult is if you have $40 oil and you have $4 natural gas or $4.50 natural gas and $35 crude , and I guess our view is , as we look out , that we see , we see the the relationship between oil and natural gas kind of staying in this 15 to 1 spread where you are right today , I think that's pretty much where you're going to be .

Speaker #6: I mean , I frankly , I think you might you may see oil come down some . I mean that seems to be , you know , that that could be .

Speaker #6: But I don't think you're right . Now you're seeing sort of winter pricing on the gas curve so that gas cost should come down .

Speaker #6: And so I think you'll , you'll as I said , I think the 15 to 1 is probably 15 , 16 one is probably pretty good spread along with .

Speaker #5: Along with the other drivers . You know , that we have within our margin of Rin and Lcfs and , you know , pricing around that .

Speaker #5: So we don't have everything all concentrated in one . One of the beauties .

Speaker #6: Know we have a lot of West coast , the West Coast , the , you know , the . throughout the country , refined products and diesel .

Speaker #6: I mean diesel today and , and California is $5.25 .

Speaker #10: So that's .

Speaker #6: That has to get factored in, right?

Speaker #10: Okay . Great . Thank you .

Speaker #4: Our next question comes from Duchamp . Alani with Jefferies . Please go ahead .

Speaker #11: Hey guys . Thanks for taking my question . I just have one quick one . I know that as you guys kind of ramp your RNG upstream , you know , next year , 2026 , I know there are a bunch of puts and takes 45 Lcfs D3 .

Speaker #11: Just trying to figure out what are some of the sensitivities you think about for that segment to get to EBITDA positive? Any kind of thoughts or color that you can share?

Speaker #11: Is that a 2026 story , 2027 what do we need to see D3 or Lcfs or 45 to kind of get to those levels ?

Speaker #6: Well , you got you got a lot of things . Let me start . And then Bob , where I mess up , you can you can find that we do think that the Lcfs program is outlined by Carb is going to lead over time .

Speaker #6: Over next year to a strengthened lcfs price . Now it's anybody's guess exactly where it is . But our partners and us , we think that 26 , you know , 26 is going to be better than 25 , and 27 is going to be better than 26 .

Speaker #6: And so that should be strengthening . I mean , car believes that the lcfs , by the time you get to 2829 could be back to where we were at 120 to 135 , $150 .

Speaker #6: So , you know , that's good . Maybe we've seen the bottom and that should be strengthening . So that's good for our business .

Speaker #6: We , as I said on our call , we have to work on what we control is we have to get the the capacity and the production levels up at the plants .

Speaker #6: And , you know , we feel confident now that we've really taken firmer control over the operations . We'll we'll get there . But that's , that's important to us for these things to perform correctly .

Speaker #6: You know , as about almost as important as what's happening on the , on the environmental pricing side . So we've got to get these things feel very good about these two large projects that we just brought , brought on .

Speaker #6: Now because they've commissioned , well , and I think we learned from some of our earlier projects , we've got to get them all all these projects performing better .

Speaker #6: And then you , then you really then you can really see them perform like they should , and you'll have strengthening lcfs prices over time .

Speaker #6: Think Rins , Rins . I would say maybe the cautious view there is we've seen those stabilize and I'm not smart enough to figure how the small finding or you know , the .

Speaker #6: Small refinery exemptions factored in into the maybe a potential change in the rvo . Some have said that it could lead to rim strengthening , some I don't know , but I you know , we sort of like where the rim is now because it's stabilized at $2.30 or so .

Speaker #6: And that that works fine for us . So , so productivity enhancements on our on our plants . And we do see a strengthening of the lcfs credit in the future .

Speaker #5: And if there's and then the the production tax credit as well 45 Z . If that changes in our favor with the guidance comes out from the Treasury .

Speaker #5: If they . Yeah . Depending on where that comes out , that could be some upside . But I think that as you said , I mean these these projects at least are getting through that ramp up phase .

Speaker #5: And that's really it's kind of about that kind of timing to get through the period , which going into 26 , a lot of them are and the volume production then .

Speaker #5: Should show improvements there for sure .

Speaker #11: Got it . Thank you .

Speaker #4: It appears we have no further questions at this time . I will now turn the program back over to Andrew Littlefair for any additional or closing remarks .

Speaker #6: Thank you . Operator . Thank you , everyone for joining us today , and we look forward to filling you in on the next quarter .

Speaker #6: Next year . Thank you .