Opal Fuels LLC, a vertically integrated producer and distributor of renewable natural gas (RNG), and ArcLight Clean Transition Corp. II (ArcLight), a publicly traded special purpose acquisition company (SPAC), announced a definitive agreement for a business combination that will result in Opal becoming a publicly listed company. Upon closing of the transaction, the combined company will be named Opal Fuels Inc. (Opal) and remain listed on the Nasdaq Stock Exchange under the new ticker symbol “OPL.” The combined company will continue to be led by Opal Fuels co-CEOs Adam Comora and Jonathan Maurer.
“This transaction with ArcLight reflects a transformative step in our company’s development and strategy,” said Comora. “RNG-powered heavy duty fleets realize substantial savings today versus diesel and the successful execution of our robust growth plans will expand the role of ultra-low-carbon RNG across the transportation sector. By capturing harmful fugitive methane emissions and replacing traditional fossil fuel usage, we will advance the sustainability and decarbonization goals of public policy makers, our customers, and our partners across the nation. RNG is a right now solution to the right now problem of climate change. RNG is one of the most attractive sources of renewable energy — its production uses existing technologies proven at scale, it can be transported on existing pipeline infrastructure, and it can be stored effectively until its use, all of which lead to a cost competitive and reliable fuel source. We are thrilled to partner with ArcLight, as their experience as an energy infrastructure asset manager is a strong vote of confidence in the bright future of our company. We look forward to leveraging their expertise as we execute on our business model.”
“It is an incredibly exciting time at Opal Fuels,” said Jonathan Maurer, co-CEO of Opal Fuels. “The market for RNG as a transportation fuel is at an inflection point, and we are excited to leverage our expertise in renewable power to be a leader in RNG projects as we convert renewable power projects to renewable transportation fuel facilities. Our seasoned team, which includes several leaders that have more than 25 years of experience in the industry, is excited to execute on our robust project pipeline and deliver value to all of our stakeholders.”
RNG is a proven low-cost, low-carbon fuel that, when used in transportation in place of diesel fuel can cost 40% to 70% less per gallon, providing significant annual operating cost savings while dramatically reducing the carbon footprint of heavy-duty fleets.
Opal Fuels, a Fortistar portfolio company, is a waste-to-fuel RNG production and distribution company with a capture and conversion upstream business and dispensing and monetization downstream business serving the domestic heavy duty transportation sector. “We’re excited about this opportunity with Opal to leverage RNG to produce and distribute ultra-low-carbon fuels that are helping drive decarbonization of the transportation sector,” said John Ketchum, president and CEO of NextEra Energy Resources. “This investment is consistent with our strategy to help lead the decarbonization of the transportation, electricity, and industrial sectors in the United States.”
Underpinned by gas rights agreements that are typically at least 20 years in length, capture and conversion projects produce RNG by capturing methane emissions from landfill sites and dairy farms. The captured methane emissions are purified and treated, turning once harmful emissions into a source of clean, renewable energy, reducing the harmful long-term effects of methane and carbon emissions. This flips a substantial cost — managing dairy waste and landfill gas — into significant revenue streams for dairy farms and landfills. Opal Fuels’ dispensing and monetization operations help deliver this clean, reliable, and renewable fuel to heavy duty trucking fleets through Opal’s national network of fueling stations, which spans 42 states and is typically backed by fueling agreements averaging 10 years in duration.
Opal is also positioned for a future that includes the commercialization of emerging technologies, including renewable hydrogen, through existing partnerships with key industry participants. The company wants to be an enabler of renewable hydrogen that uses RNG in its production and to develop, construct, and operate heavy duty hydrogen fueling station networks. “Opal Fuels is a leading platform for the production and distribution of ultra-low-carbon RNG to the transportation sector, the highest value end-market for RNG,” said Jake Erhard, president and CEO of ArcLight. “The company’s vertically integrated model differentiates it from other players in the industry, which, together with the platform’s more than two decades of experience, gives us tremendous confidence in the company’s ability to execute its growth plans. Importantly, Opal Fuels’ business contributes meaningfully to sustainable development in the transportation, waste management, and agricultural industries by enabling the adoption of leading-edge methane capture technologies and processes that drastically reduce greenhouse gas emissions.”
Today, Opal operates 21 biomethane projects, of which three are in RNG service and the rest are in renewable power service. Increasing secular tailwinds, which include public policy initiatives and corporate sustainability objectives, are supporting the growth of RNG as a way to cost effectively halt climate change and decarbonize transportation, providing strong visibility into significant volume and earnings growth for Opal over the next several years. The company’s project pipeline totals 23, seven of which are currently in construction.
