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Item 1A. Risk Factors
TExcept as described below, there have been no material changes from the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024. The risks described in the Annual Report on Form 10-K for the year ended December 31, 2023 are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.
We are required to implement programs to comply with the Biogas Regulatory Reform Rule and our failure to do so could have an adverse effect on our financial results.
On July 12, 2023, the EPA issued final rule 88 Fed. Reg. 44468 (July 12, 2023) to, in part, implement biogas regulatory reform to the EPAs Renewable Fuel Standard Program (RFS) (the Biogas Regulatory Reform Rule or BRRR). BRRR significantly changes the method by which RINs are generated from biogas feedstock and how market participants are required to administer RINs.
BRRR requires all parties in the chain of title to biogas, renewable natural gas, and RINs to register with the EPA. By January 1, 2025, all parties must comply with BRRR and only biogas and RNG produced and dispensed under BRRR are eligible for RIN generation.
The Company has timely completed applications for registration under BRRR of its RNG production projects in operations. The Company anticipates receiving EPA registration acceptance for these projects prior to January 1, 2025. There can be no assurance, however, that such approval from EPA will be received by January 1, 2025.
BRRR also requires RNG RIN separators to register with the EPA for each CNG dispensing station. The Company is in the process of registering as RNG RIN separator, for fueling stations that account for approximately 57% of the Companys CNG dispensing capacity. Wherever the Company is not registered as the RNG RIN separator, it will rely on the owner/operator of the fueling station to perform the role as RNG RIN separator (i.e., separating the RINs and transferring them to the Company for monetization). There can be no assurance that these owners/operators will timely provide the necessary administrative services and transactional data required for the separation and transfer of RINs from these stations. If we are unable to receive RINs from stations representing a material proportion of our dispensing capacity, it would have a material adverse effect on our financial results.