Jonathan Maurer: Yeah. So look, project design, a great project design, proven. We think that the ramp-up will be very good. The commissioning went very smoothly. And you kind of see the ramp-up in real time. But because of the proven design, we really expect that the lessons learned from prior projects will be applied to this one, and we should see a good progression. Adam, did you want to add to that?
Adam Comora: Yeah. No, the only thing I would say there, too, is — and I’m not sure if we’ll get questions on it in terms of capacity utilization and that sort of thing, but just keep in mind that we do build these facilities to where we expect them to mature and grow into. When you look at our inlet gas capacity — so we do expect these facilities to grow over time and we do see good growth on a same-store-sales basis. But everything looks good at Prince William so far.
Jonathan Maurer: Yes. Large, open, growing landfills. The project is built to take advantage of that growth. And a proven design. All of which really contribute to that growth.
Adam Comora: Which really what — it really speaks to why we’re confident in terms of reiterating our guidance and that sort of thing is Prince William was the chunkiest piece of production growth this year. And it was good that we completed that and are injecting gas into the pipeline.
Paul Cheng: So do you assume Prince William will get to about 80% plus by the end of the year?
Adam Comora: We’re not going to get into specifics on any one facility. Paul, what we do is we try and give — because we do have a portfolio of projects, where we expect our overall inlet capacity utilization and utilization of inlet gas. We try and give a more portfolio-level guidance versus just individual facilities.
Paul Cheng: Okay. Will do. Thank you.
Operator: And one moment for our next question. Our next question will be coming from Alex Kania of Marathon Capital. Your line is open.
Alex Kania: Hey, good morning. So two questions, hopefully. So the first one is just, you expressed some cautious optimism on getting ITC clarity. I’m just wondering if you think that there’s a timetable associated with that in the coming months or quarters or whatnot. And the second one is just with respect to the RIN forward sales. Was that limited to just 2024? Or do you have any — were you able to sell forward any kind of future exposure into ’25 and beyond?
Adam Comora: Okay. Thank you for the question. And I’m going to answer the second one first, because that’s quick. There is a 2025 market starting to develop, but it’s very thin. And we have not transacted yet on ’25. I don’t know if that’ll show up until later in the year. And before I get into the specifics on the ITC, I want to talk a little more broadly on our regulatory outlook, because we do get a lot of questions on a potential Republican administration. And what I want to say is a couple of things on that. First, I want to remind everybody the problem that we solve, which is fugitive methane emissions from waste-in-place, whether it’s from landfills or manure or wastewater or food waste. And that molecule waste-in-place issue is starting to get a lot more attention.
And OPAL has a view that really what we should be doing is a better best strategy around that. The wrong answer is to do nothing. And rather than doing nothing, you can also capture these fugitive methane emissions at their source and flare them, which also is not a great answer. And we really believe that what we should be doing is this better best policy, which is converting them into either renewable power or RNG. And I also want to say we don’t need any new policies or regulations to execute on our growth plans. And what we’re really talking about here is what we can do to accelerate our business, which is more biomethane capture for productive use, which is really what the vast majority of Americans want to fight climate change and also public policymakers.
And where it sort of breaks down — and I’m getting to the ITC specifically in a minute. But where it breaks down at times is you get into a debate between molecules versus electrons, and it shows up all over our business, where you have some very progressive climate folks that really want to electrify everything and feel like all molecules are bad. And you see that play out as people are contemplating what to do about heavy-duty fleets, whether you electrify everything. And don’t really embrace any molecules and really aren’t acknowledging that we have a molecule-in-place issue from all this waste that these fugitive methane sort of emissions come from. And then we’ve got folks on perhaps the Republican side, which, by the way, are in favor of all sorts — or we believe maybe will remove some of the blockages on molecule solutions.
And it shows up when people are talking about how to use RNG in either hydrogen production or SAF production, or what to do about heavy-duty trucking. And we really believe there’s an opportunity here to sort of get this — get both sides of the aisle to really embrace this better best strategy. And as it pertains to the ITC, there was an initial fix done where biogas property would be included. There’s a couple of mechanical things that I think industry has been asking for, specifically on landfills, on common ownership, because we — landfill owners typically own the collection system. And all the capital that’s being invested — or the vast majority of time capital being invested is not — does not own the collection system. And we’re still optimistic that that could potentially be fixed.
And early summer is when we’ve been told we’re going to hear on it. If that common ownership doesn’t get fixed, there may be ways to structure around it. So, we’re still cautiously optimistic that we will be able to utilize or qualify for those tax credits, but it’s not totally done yet. And when we think about what we were talking about before, ways to turn this into a bipartisan issue and really accelerate sort of what we’re doing in this fight against climate change, you can see it playing out in a number of different ways, where, if Biden wins the election, chances are you get some of those more positive public policies, whether it be eRINs or something else. And if there is a Republican administration, maybe we get more, what I would say, practical solutions around heavy-duty trucking, and maybe that has positive implications for the Cummins 15-liter engine, or more practical solutions on how to use RNG for renewable hydrogen.
And perhaps more embraced for making sure that we don’t have issues that show up into the ITC. And we think there’s a real opportunity there. And it’s just really interesting that when we talk to folks on the Democratic side, we’re trying to explain to them that we have a molecule-in-place issue and we need things like the ITC and biogas conditioning and property. And by the way, even if we wanted to create renewable electricity from it, it makes more sense to take that RNG and bring it over to an efficient combined cycle plant. And by the way, RNG is the best answer for environmental justice. It does the most to improve local air qualities and that sort of thing. And typically, Republican — it typically shows up in Republican kind of sectors, whether it be ag, or all the countless municipalities out there.
And from the electron side of things, we think there’s a lot of Republicans that can get on board for more renewable power, capture and production from this biomethane. It’s good base load power. It enhances grid stability. It’s energy security, and it usually shows up in more rural economies. So, I know you specifically asked about the ITC, but I just wanted to explain a little bit more because we do get a lot of questions on a Trump administration. And I’d remind everybody, we don’t need any of these policies to execute on our business plan and really grow in ways that we’ve been talking about. We just think there’s a real opportunity here to accelerate what we’re doing and, quite frankly, accelerate our fight against climate change.
Alex Kania: Great. Thanks so much for that answer
Operator: One moment for our next question. Our next question will be coming from Adam Bubes of Goldman Sachs. Your line is open. Adam, your line is open.
Adam Bubes: Hi. Thanks for taking my question. In Fuel Station Services, just wondering how many incremental owned and third-party stations you expect to complete in 2024 to hit the 75% to 90% EBITDA growth outlook? And how you’re thinking about the cadence of fuel station builds throughout the year?
Adam Comora: Adam, we do not typically give quarterly guidance in terms of — to that level of granularity. We can get back to you in terms of sort of number of stations that’ll come online. I think the first quarter this year had seven incremental OPAL Fuels-owned stations versus last year. And I would say OPAL Fuels Station Services’ revenue and EBITDA growth comes from four different places, right? It’s better utilization of our dispensing network. So, we believe we’re going to have more sort of environmental credit revenue flowing through those sites. It also comes from improving margins in the construction business, where last year we were still cycling through some inflation issues. It does come from higher volumes, from new stations being commissioned, and also as you annualize last year’s stations where you had partial years.
And we still have growing volumes in the service side of the business. So, it really comes from all four of those things. And as you look further out, that’s where also we’re — we get excited about the growth of that potential 15-liter Cummins engine as we move through ’25 and ’26. But this year, the ’24 growth revenue and EBITDA growth really comes from the four pieces I was talking about.
Adam Bubes: Got it. Thanks a lot. And then any update on the two dairy projects? If there’s been any resolution with the EPC contractors? And then, broadly, just can you update us on how you’re thinking strategically about opportunities for dairy investments down the road?
Jonathan Maurer: Sure. This is John. I’ll give you an update. On our California dairy projects, there really is no update. Just as a reminder, there is a dispute with the EPC construction contractor regarding some change orders. The contractor is obligated under the EPC contract to continue working while the dispute is resolved. We’re proceeding with arbitration, which is continuing in due course. And the construction contractor’s obligations are supported by a surety bond. So it’s in process. As we think about growth, let’s just reiterate that landfill RNG is a terrific opportunity, and there’s a lot of space for growth in there. So, as we think about our organic growth and the core growth that we’re going to be experiencing, that’s really going to come from our deepening relationships and joint ventures with our partners in the landfill sector.
However, we continue to explore other areas outside of the landfill. So the landfill will be the core of our growth, but there’s numerous biomethane opportunities adjacent to the landfill sector. And in addition to dairy, we see opportunities in other agricultural waste, wastewater itself, food waste and other D3 and D5 gas streams. So, we continue to explore opportunities of expanding. We believe that there is a really large opportunity set outside of landfill and dairy, and we think that over the course of the coming year, we’ll be able to recognize some entree into those areas as we start growing beyond the landfill area.
Adam Bubes: And then, last one for me, congrats on placing the Cottonwood Project into construction. Just wondering if you can tell us more about that partnership in terms of royalty, CapEx, any further details would be great.
