HOUSTON – Clean Energy Fuels Corp. (NASDAQ: NASDAQ:CLNE) has entered into an agreement with the Metropolitan Transit Authority of Harris County (METRO) to construct a new compressed natural gas (CNG) fueling station, which will serve up to 120 of METRO's CNG-powered transit buses. The station, expected to consume 2 million gallons of CNG annually, represents a significant step towards METRO's goal of operating a zero-emission fleet by 2030.
The new facility, to be built in the Hiram Clarke area of southwest Houston, is part of METRO's strategy to reduce nitrogen oxide and carbon emissions. The transition to CNG is projected to cut NOx and tailpipe emissions by 90%, contributing to cleaner air in Houston, which spans over 1,285 square miles. The station will also be capable of fueling buses with renewable natural gas (RNG) in the future, potentially reducing carbon emissions by over 300%.
Clean Energy will be responsible for the design, construction, and maintenance of the station, which is slated for construction starting in early 2025. The station will feature fast-fueling capabilities, allowing buses to fuel up in under 12 minutes, thus maintaining efficient transit services.
Chad Lindholm, senior vice president at Clean Energy, expressed enthusiasm for the partnership, noting the importance of the agreement for both METRO's sustainability goals and Clean Energy's role in supporting large fleets' transition to cleaner fuels. This deal is described as the largest Clean Energy has secured in the past decade.
The move to CNG by METRO is part of a broader initiative to provide cleaner transportation options for Houston's 4.7 million residents. It also ensures continuity of service, as natural gas engines can cover the extensive transit routes without frequent refueling.
This initiative is based on a press release statement and is part of Clean Energy's mission to decarbonize transportation through the development and delivery of RNG and other clean fuels across the United States and Canada.
In other recent news, Clean Energy Fuels (TSX:EFR) Corp. reported significant financial results for the second quarter of 2024. The company experienced an increase in both adjusted EBITDA and revenue, despite a GAAP net loss of $16.3 million. Revenue for the quarter was reported at $98 million, with 57 million gallons of RNG sold. TD Cowen, maintaining a Hold rating on the company's shares, anticipates that Clean Energy Fuels' equity affiliates will receive Investment Tax Credit (ITC) cash within the next 12 months, potentially benefiting the company. Clean Energy Fuels is also expanding its Boron facility's output by 50% and developing new RNG projects, with six currently operational. The firm pointed out two potential catalysts for an upward revision of the price target: the 45Z tax credit and the penetration of the 15L engine market. Lastly, the company expects to deliver between 95% and 100% of its target of 245 million gallons of RNG for 2024.
InvestingPro Insights
As Clean Energy Fuels Corp. (NASDAQ: CLNE) embarks on a significant project with the Metropolitan Transit Authority of Harris County, investors and stakeholders are closely monitoring the company's financial health and market performance. Here are some insights based on real-time data and InvestingPro Tips:
Clean Energy's market capitalization stands at $683.69 million, reflecting the company's size and scale within the renewable energy sector. Despite the potential for growth in the industry, analysts are cautious, as evidenced by two analysts revising their earnings downwards for the upcoming period. This could be due to the company's current profitability challenges, as analysts do not anticipate Clean Energy will be profitable this year.
InvestingPro data shows that Clean Energy is trading at a negative P/E ratio of -8.6, based on the last twelve months as of Q2 2024. This indicates that the company has reported a net loss during this period. Additionally, the stock's volatility is notable, with price movements that may concern risk-averse investors. However, the company's liquid assets exceed short-term obligations, which suggests that Clean Energy has a solid footing for managing its short-term financial responsibilities.
While the company operates with a moderate level of debt, it is not profitable over the last twelve months, and it is trading at a high EBITDA valuation multiple. Moreover, Clean Energy does not pay a dividend to shareholders, which may affect its attractiveness to income-focused investors. On the positive side, the company's revenue growth on a quarterly basis in Q2 2024 was 8.18%, indicating some operational momentum.
For those interested in a deeper analysis, InvestingPro offers additional insights. There are currently 7 more InvestingPro Tips available for Clean Energy Fuels Corp., which can be accessed at https://www.investing.com/pro/CLNE. These tips provide a more comprehensive understanding of the company's financial position and future outlook, which could be particularly useful for investors considering the long-term impact of the METRO agreement on Clean Energy's growth trajectory.
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