Clean Energy Fuels' 2024 Q4: Contradictions on 45Z Credits, Engine Adoption, and RNG Demand

These are the key contradictions discussed in Clean Energy Fuels Corp.'s latest 2024Q4 earnings call, specifically including: 45Z credit expectations, 15-liter engine adoption, RNG demand and utilization, and LCFS credit expectations:



Strong Performance in RNG Sales:
- Clean Energy Fuels reported 9% increase in RNG sales for Q4 2024 compared to the previous year, with 62 million gallons sold.
- This growth was driven by consistent recurring revenue from fuel distribution and an increase in demand for RNG as a transportation fuel.

Rising Adoption of X15N Engines:
- The initial adoption of the Cummins X15N engines is expected with over 25 fleets using the new engine in 2025.
- This adoption is viewed as significant, with a potential for the market to reach 10% penetration within a few years, benefiting from favorable fleet feedback and positive CEO statements from Cummins.

Impact of Regulatory Clarity on 45Z and OAL:
- Clean Energy Fuels is awaiting clarifications on the Section 45Z credit and the OAL pause, which could impact RNG production.
- The company believes regulatory clarity will lead to increased credit pricing, potentially reaching 80 by the end of the year, benefiting from supportive government action on renewable fuels.

Challenges and Opportunities in California Regulatory Environment:
- California's regulations, including the Advanced Clean Fleets mandate and diesel truck sales decline, created uncertainty and inaction.
- Clean Energy Fuels sees opportunities in the California market, especially with rural areas investing in RNG projects, leading to cleaner air and reduced emissions.