Clean Energy Fuels (CLNE) Q3 2025: Upstream RNG Output Doubles as Dairy Projects Ramp

November 4, 2025 | By EarningsIQ Research

Clean Energy Fuels delivered on raised 2025 guidance, driven by stable downstream fueling and a step-function increase in upstream RNG production capacity. The company’s execution on new dairy RNG projects, despite regulatory and credit market volatility, positions it to capitalize on tightening environmental credit markets and growing heavy-duty trucking demand. Investors should watch for the operational ramp of new projects and regulatory clarity on 45Z credits as key catalysts into 2026.

Summary

• Upstream Expansion: New dairy RNG projects doubled operational capacity, setting up volume growth into 2026.
• Heavy-Duty Trucking Focus: Partnerships and demo programs intensify push for RNG adoption in Class 8 fleets.
• Regulatory Leverage: Positioning for 45Z and LCFS credit improvements underpins future profitability.

Performance Analysis

Clean Energy Fuels posted $106 million in revenue, reflecting an 8% underlying increase excluding the now-expired alternative fuel tax credit. Fuel sales and station construction drove top-line growth, offsetting the impact of lower Renewable Identification Number (RIN) pricing and the absence of $6.4 million in tax credits from the prior year. The company’s adjusted EBITDA of $17.3 million was steady, aided by improved upstream dairy RNG margins and disciplined operating expenses.

Net loss widened year-over-year, primarily due to the lack of tax credits and $5 million in accelerated depreciation tied to pilot stations. However, cash flow from operations remained positive, and the company closed the quarter with $232 million in cash and investments, even after a $12 million capital contribution to its Moss Energy Works joint venture. Upstream RNG volumes exited the quarter at 5–6 million gallons, with management expecting nearly a doubling in 2026 as new projects ramp.

• Fuel Volume Growth: RNG sales increased despite Q1 weather disruptions, normalizing in Q3 as plant ramp-ups stabilized supply.
• Margin Variability: Lower RIN and LCFS prices pressured upstream profitability, but downstream margins held due to favorable oil-to-gas spreads and cost controls.
• Capital Deployment: $35 million in annual capex committed to Moss projects, with a total plan of $85 million supporting future supply.

The company maintained its raised 2025 outlook, signaling confidence in both operational and financial execution as RNG production and fueling site activity increase.

Executive Commentary

Strategic Positioning

1. Downstream Fueling Resilience

Transit and refuse fleets anchor the core business, providing stable revenue streams and recurring relationships across 309 fueling sites and 140 companies. Clean Energy’s network scale and customer breadth (including national leaders like WM and Republic Services) ensure steady base demand, even as the company navigates policy and credit market shifts.

2. Heavy-Duty Trucking Opportunity

Class 8 heavy-duty trucks represent the largest growth lever, with Clean Energy leveraging partnerships (such as Pioneer Clean Fleet Solutions, a leasing platform focused on low-carbon trucks) and demo programs for the Cummins X15N engine. Early traction with major fleets (Walmart, Amazon, UPS, FedEx, Knight-Swift) signals growing market acceptance, though freight rate headwinds and capital discipline among fleets may temper near-term adoption rates.

3. Upstream RNG Production Scale-Up

Eight operating dairy RNG projects now supply Clean Energy’s network, with two new large-scale plants in Texas and Idaho beginning injection. Management expects own-sourced RNG volumes to nearly double in 2026 and eventually reach 20 million gallons as the Moss Energy Works pipeline is built out. Production ramp depends on operational fine-tuning rather than major capex, with management focused on optimizing yields and learning from initial plant performance.

4. Environmental Credit Market Positioning

LCFS (Low Carbon Fuel Standard) and 45Z Clean Fuel Production Credit represent material upside drivers. While LCFS prices remain subdued, California Air Resources Board (CARB) tightening is expected to support price recovery beginning in 2026. Final Treasury rules for 45Z are pending, but Clean Energy expects to monetize credits retroactively once finalized, enhancing project economics for dairy RNG.

5. Prudent Capital Allocation and Supply Strategy

Management has scaled back earlier ambitions for 100 million gallons of upstream production, focusing instead on a balanced approach that leverages both own supply and 80–90 third-party RNG suppliers. This diversified sourcing strategy reduces risk and capital intensity while maintaining Clean Energy’s central role in the RNG transportation market.

Key Considerations

This quarter’s results highlight Clean Energy’s ability to execute on both stable, legacy fueling operations and high-potential RNG production, even as regulatory and market conditions remain fluid. The company’s strategic focus on operational excellence, capital discipline, and regulatory leverage will shape its competitive position over the next several years.

Key Considerations:

• Regulatory Tailwinds Building: Anticipated improvement in LCFS and 45Z credit markets could significantly enhance upstream economics from 2026 onward.
• Heavy-Duty Trucking Adoption Pace: Freight market softness and capital constraints may slow near-term RNG truck adoption, but technology leadership and demo programs position Clean Energy for longer-term share gains.
• Upstream Ramp Execution: Operational fine-tuning, rather than capex, is key to achieving nameplate production at new dairy RNG plants; early results are encouraging.
• Margin Management: Oil-to-gas price spreads remain favorable, but ongoing monitoring is needed as commodity prices and environmental credits fluctuate.

Risks

Regulatory uncertainty around LCFS and 45Z credits remains a material risk, with timelines for Treasury rule finalization and CARB market tightening still evolving. Heavy-duty trucking adoption is sensitive to freight rates, capital cycles, and policy clarity, potentially delaying volume ramp. Commodity price volatility (oil, natural gas) and environmental credit pricing (RIN, LCFS) could pressure margins and cash flow if trends reverse.

Forward Outlook

For Q4 2025, Clean Energy guided to:

• Adjusted EBITDA at the high end or slightly above the prior range, reflecting continued operational execution.
• Upstream RNG volumes expected to exit the year at 5–6 million gallons, with a near doubling projected in 2026 as new plants ramp.

For full-year 2025, management reaffirmed its raised guidance from August, citing:

• Steady downstream fueling business and improving upstream production rates.
• Anticipation of regulatory clarity on 45Z credits and gradual LCFS price improvement in 2026.

Management signaled that Q4 performance should exceed the top end of guidance if current trends hold, but declined to formally raise targets this late in the year.

Takeaways

Clean Energy Fuels is executing on a dual-track strategy: steady base business in transit and refuse, and a scalable upstream RNG platform poised to benefit from regulatory tailwinds. The company’s capital discipline, operational focus, and market positioning in heavy-duty trucking set up optionality for future growth.

• Operational Ramp: Dairy RNG production is inflecting, with new projects set to drive volume and margin growth as environmental credit markets tighten.
• Strategic Partnerships: Collaborations with Cummins, Hexagon Agility, and Pioneer Clean Fleet Solutions enhance Clean Energy’s ecosystem and accelerate RNG truck adoption.
• Regulatory Watch: Final 45Z rules and LCFS market tightening are key catalysts; investors should monitor timing and impact on upstream profitability.

Conclusion

Clean Energy Fuels delivered a quarter of steady execution and strategic progress, with upstream RNG ramp, downstream stability, and regulatory positioning setting the stage for 2026. Execution on new projects and clarity on environmental credits will be decisive for future value creation.

Industry Read-Through

Clean Energy’s results reinforce that RNG is gaining traction as a practical decarbonization pathway for heavy-duty transport, as electric and hydrogen alternatives face adoption barriers. LCFS and 45Z credit markets are pivotal for the entire low-carbon fuels sector, with regulatory clarity likely to drive capital allocation and project economics across peers. Stable downstream demand from transit and refuse fleets suggests that established clean fuel infrastructure remains resilient, while the pace of heavy-duty truck conversion will be a key sector-wide watchpoint in 2026 and beyond.

CLNE Energy Renewable fuels Decarbonization Heavy-duty trucking RNG Environmental credits Transit