Executive Summary / Key Takeaways

• Clean Energy Fuels Corp. is North America's leading provider of renewable natural gas (RNG) for transportation, leveraging its extensive fueling network and growing upstream production to drive practical decarbonization at a lower cost than traditional fuels.
• The company's core investment thesis is strengthened by its differentiated RNG technology, offering significant greenhouse gas reductions and a compelling economic advantage, particularly with the new Cummins X15N engine in heavy-duty trucking.
• Recent financial performance in Q3 2025 demonstrated solid revenue growth, primarily driven by increased fuel sales and station construction, alongside improved operating cash flow, despite the expiration of the Alternative Fuel Tax Credit (AFTC) and lower RIN prices.
• Strategic initiatives, including the ramp-up of owned RNG production projects and partnerships to accelerate X15N adoption, are poised to enhance future profitability and market share, with management reaffirming its raised 2025 adjusted EBITDA guidance of $60 million to $65 million.
• Key risks include ongoing policy volatility, particularly around environmental credit values (LCFS, 45Z), the pace of heavy-duty truck adoption, and operational challenges in scaling RNG production, though the company is actively addressing these through strategic positioning and operational optimization.

A Decarbonization Catalyst with a Deep-Rooted Network

Clean Energy Fuels Corp., established in 2001, has evolved into North America's foremost provider of clean fuel for the transportation market. The company's foundational strategy centers on delivering practical decarbonization solutions through renewable natural gas (RNG) and conventional natural gas (CNG, LNG) for medium and heavy-duty vehicles. This approach is underpinned by an extensive network of over 580 fueling stations across 43 U.S. states and the District of Columbia, and 27 stations in Canada, serving over 1,000 fleet customers operating more than 50,000 vehicles. Management asserts that this infrastructure provides access to "substantially more RNG to vehicle operators than any other participant in the market—we calculate that we have access to more fueling stations and vehicle fleets than all our competitors combined."

The company's journey into clean transportation gained significant momentum in 2014 with its first full year of RNG sales, marking a strategic pivot towards biofuels. This historical trajectory has culminated in a dual focus: expanding its downstream fueling business and growing its upstream RNG production capabilities through anaerobic digester gas (ADG) projects. This integrated model aims to capture greater value across the entire supply chain, from waste-to-fuel production to direct delivery at the nozzle tip.

Clean Energy's technological differentiation lies primarily in its Renewable Natural Gas. RNG, derived from biogenic methane captured from organic waste sources like dairy farms and landfills, offers substantial environmental benefits. It reduces climate-harming greenhouse gases (GHG) by 60% to over 400% depending on its source, and significantly lowers Nitrogen Oxides (NOx) emissions. In California, the company's RNG boasts an impressive average carbon intensity (CI) score of minus 194. This negative carbon footprint is a critical differentiator, enabling the generation of valuable environmental credits.

Beyond its core RNG offering, Clean Energy is actively involved in the evolution of heavy-duty vehicle technology. The company has partnered with Cummins (CMI) and Hexagon Agility (HEX.OL) to support the adoption of the Cummins X15N natural gas engine. This next-generation engine, designed for heavy-duty Class 8 trucks, offers a compelling economic proposition. The incremental cost of an X15N-equipped truck has been reduced to approximately $75,000-$80,000, down from initial estimates of $100,000-$115,000. This price point, combined with Clean Energy's advantageous fuel pricing, can provide fleets with a 2- to 2.5-year payback on the incremental equipment cost, followed by significant long-term savings.

Looking ahead, Clean Energy is exploring longer-term technological expansions into hydrogen fuel for vehicle fleets and electric vehicle (EV) charging at its stations. The strategic intent is to leverage its existing infrastructure by modifying stations to reform RNG into clean hydrogen and to add EV charging capabilities, thereby adapting to evolving customer demands for diverse clean energy solutions. While the cost of adding EV charging capacity may be significant, these initiatives position the company for future market shifts. These technological advancements and strategic adaptations are crucial for Clean Energy's competitive moat, enhancing its financial performance through higher fuel sales, better margins from environmental credits, and a strengthened market position in the rapidly evolving clean transportation sector.

Competitive Landscape and Strategic Positioning

Clean Energy operates in a highly competitive market, primarily vying with diesel as the dominant fuel for heavy-duty transportation. However, it also faces competition from other alternative fuels like renewable diesel, biodiesel, ethanol, and emerging technologies such as electric and hydrogen-powered vehicles. Many competitors, including engine manufacturers like Cummins Inc. and equipment suppliers like Chart Industries (GTLS), possess substantially greater financial resources, brand awareness, and diversified portfolios. Westport Fuel Systems (WPRT), a developer of natural gas and hydrogen fuel systems, also represents a direct technological competitor.

Clean Energy's competitive edge is its integrated approach, offering end-to-end fueling solutions from RNG production to distribution and maintenance. This contrasts with Cummins' focus on engine manufacturing or Chart's specialization in cryogenic equipment. While Cummins boasts stronger financial performance, characterized by robust revenue growth and higher profitability margins from its diversified product lines, Clean Energy's deep specialization in RNG and its extensive fueling network provide a unique market position. The company's ability to offer a lower cost of ownership for fleets using RNG, coupled with significant environmental benefits, directly challenges the economic and environmental viability of diesel.

Against battery-electric and hydrogen technologies, Clean Energy's management highlights that these alternatives "face significant challenges for heavy-duty trucking" due to high costs, unproven infrastructure, and regulatory uncertainties. RNG, conversely, offers a "low NOx and has low to negative greenhouse gas emissions" solution with "engine technology, infrastructure and reliable supply of clean fuel... here today." This pragmatic approach resonates with fleets and shippers who prioritize economic sense alongside decarbonization goals. The recent repeal of certain provisions of California's Advanced Clean Fleets (ACF) regulation, which had mandated zero-emission vehicles, further underscores the challenges faced by purely electric solutions and potentially opens the door for more technology-neutral policies that could favor RNG.

Clean Energy's customer and supplier dynamics are also critical. The company's long-standing relationships with transit agencies and waste management companies provide a stable revenue base. Recent contract wins and conversions of existing CNG fleets to RNG for agencies in Fort Worth, El Paso, Laredo, Texas, and Grand Rapids, Michigan, exemplify this strength. The strategic partnerships with TotalEnergies (TTE) and bp (BP) for RNG production, and the joint development agreement with Maas Energy Works, ensure a diversified and growing supply of RNG. The collaboration with Cummins and Hexagon Agility on the X15N engine and Pioneer Clean Fleet Solutions further strengthens its position in the heavy-duty trucking market, directly addressing the need for viable, low-carbon alternatives.

Financial Performance and Operational Momentum

Clean Energy's financial performance in the third quarter of 2025 demonstrated solid operational momentum. The company reported total revenue of $106.1 million, a modest increase from $104.9 million in Q3 2024. This growth was particularly notable given the absence of the Alternative Fuel Tax Credit (AFTC), which contributed $6.4 million to Q3 2024 revenue but expired at the end of 2024. Excluding the AFTC, the underlying revenue growth was approximately 8%, primarily driven by increased fuel sales and a rise in station construction sales.

Product revenue for Q3 2025 reached $90.9 million, up from $89.9 million in Q3 2024. This was fueled by higher vehicle fueling volumes, including $2.9 million from the reopened Pickens LNG plant, and increased pricing due to higher underlying natural gas commodity costs. Station construction sales also saw a healthy increase of $2.1 million. These gains were partially offset by a $2.8 million decrease in RIN revenue, primarily due to lower RIN credit prices, and a $1 million increase in non-cash stock-based sales incentive contra-revenue charges related to the Amazon (AMZN) Warrant. Service revenue also saw a slight increase to $15.2 million in Q3 2025, driven by higher service margins.

Despite these revenue improvements, the company reported a GAAP net loss of $23.8 million for Q3 2025, compared to a net loss of $18.2 million in Q3 2024. This was influenced by several factors, including a significant non-cash goodwill impairment loss of $64.3 million recognized in Q1 2025 due to a sustained decline in share price. Additionally, depreciation and amortization expenses increased due to accelerated depreciation related to the removal of Pilot fueling station equipment, a strategic decision to exit certain LNG stations. Losses from equity method investments also increased, reflecting the ramp-up phase of joint venture projects.

From a liquidity perspective, Clean Energy maintains a strong position, ending Q3 2025 with $232 million in cash and short-term investments.

Cash provided by operating activities significantly increased to $72.4 million for the nine months ended September 30, 2025, from $42.7 million in the comparable 2024 period, driven by favorable working capital changes and higher contributions from natural gas procurement and sales.

The company's 2025 capital expenditure plan includes approximately $30 million for fueling stations and IT infrastructure, and an additional $35 million for 100%-owned ADG RNG production projects. Clean Energy also anticipates contributing up to $65 million in equity capital to the Maas Joint Development Agreement (JDA) in 2025. The company believes its current liquidity and anticipated cash flows are sufficient to meet its business requirements for at least the next 12 months.

Outlook and Forward Momentum

Clean Energy Fuels has reaffirmed its raised 2025 adjusted EBITDA guidance of $60 million to $65 million. This outlook reflects a cautious optimism, factoring in the absence of AFTC revenue (which contributed approximately $24 million in 2024) and an anticipated 27% decline in average RIN prices compared to 2024, estimated at around $2.40 for 2025. However, the company expects a slight upside in California Low Carbon Fuel Standard (LCFS) credit prices, projected in the low $70s for 2025, up from an average of $61 in 2024, with expectations for further strengthening in 2026 and beyond as CARB program changes take effect.

Total RNG volumes for 2025 are projected to be around 246 million gallons, a modest increase from 237 million gallons in 2024, excluding wholesale RNG gallons. A key driver for future growth is the adoption of the Cummins X15N engine, with 3 million to 5 million fuel gallons anticipated from over 25 fleets in 2025, signaling a crucial breadth of early adoption. This foundational year is expected to pave the way for more significant volume growth in 2026 and 2027.

In its upstream business, Clean Energy's six operating RNG projects are expected to produce 4 million to 6 million gallons in 2025. The two largest dairy projects in Texas and Idaho recently began initial operations, bringing the total operating projects to eight. These projects, alongside three new Maas Energy Works projects under construction, are expected to significantly increase owned RNG production, with the Idaho project alone estimated to produce approximately 3.50 million gallons annually upon completion. The finalization of the Section 45Z Clean Fuel Production Credit, which recognizes the negative emissions benefits of dairy RNG, remains a potential upside not yet fully factored into current guidance.

Risks and Strategic Resilience

Despite the positive momentum, Clean Energy faces several inherent risks. The market for alternative vehicle fuels, especially heavy-duty trucking, has experienced slow and unpredictable growth, exacerbated by policy volatility. Government policies, particularly in California, have historically favored battery-electric and hydrogen vehicles, creating uncertainty for natural gas. While the repeal of certain ACF provisions offers some clarity, the long-term regulatory environment remains a factor.

Volatility in environmental credit markets (RINs, LCFS) directly impacts revenue and profitability, as evidenced by the decline in RIN prices in 2025. The company's reliance on these credits for the commercial viability of its dairy RNG projects makes it vulnerable to program changes or discontinuation. Operational risks in RNG production, such as equipment issues, weather impacts, and potential bankruptcies of dairy farm partners, can affect supply and project timelines. Furthermore, the long development cycle for ADG RNG projects (12-24 months) requires significant upfront capital commitments before revenue generation.

Clean Energy's strategic response to these risks is multi-faceted. The company emphasizes its "practical decarbonization" approach, highlighting RNG's proven technology, existing infrastructure, and economic advantages over other alternatives. By focusing on optimizing existing RNG production and carefully evaluating new greenfield projects, the company manages capital allocation prudently. Its extensive fueling network acts as a significant barrier to entry, providing a competitive moat against new entrants and a strong platform for scaling demand for the X15N engine. The resumption of its share repurchase program in late March 2025 underscores management's belief that the company's shares are undervalued, reflecting confidence in its long-term prospects despite market fluctuations.

Conclusion

Clean Energy Fuels Corp. stands as a pivotal player in North America's transition to cleaner transportation, anchored by its unparalleled RNG fueling infrastructure and a growing portfolio of upstream production assets. The company's core investment thesis is built on the compelling economic and environmental benefits of RNG, particularly for the heavy-duty trucking sector, where its differentiated technology and strategic partnerships are driving increased adoption of the Cummins X15N engine. While the path to widespread adoption has faced headwinds from policy volatility and market uncertainties, Clean Energy's operational resilience, prudent capital management, and strategic focus on integrated solutions position it for sustained growth.

Despite a history of losses and ongoing challenges in environmental credit markets, the company's reaffirmed 2025 guidance, robust liquidity, and strategic initiatives to expand RNG production and market penetration underscore a positive forward trajectory. The "nozzle tip" advantage of its extensive network, coupled with the inherent cost and emissions benefits of RNG, provides a strong competitive moat against both traditional fossil fuels and nascent alternative technologies. As the market increasingly prioritizes economically viable decarbonization, Clean Energy's leadership in RNG and its commitment to technological advancement are poised to deliver long-term value for discerning investors.