Clean Energy Fuels entered a six-year $300 million senior secured term loan with Stonepeak, an alternative investment firm specializing in infrastructure and real assets.
The credit agreement also provides a two-year delayed draw term loan commitment of an additional $100 million.
In addition to repaying existing loans, the financing from Stonepeak will provide Clean Energy with capital for new renewable natural gas (RNG) production facilities, as well as the expansion of the company’s fueling infrastructure targeting the heavy-duty truck market.
Clean Energy currently provides RNG to hundreds of fleets every day in the form of compressed natural gas (CNG) and liquified natural gas (LNG), which enables them to decarbonize their large vehicles easily and affordably.
“We see RNG as a practical and affordable energy solution for the transportation sector, with tailwinds supporting increasing adoptability. This, combined with its ability to curb fugitive methane emissions, makes it a critical part of decarbonization infrastructure, in our view,” said Michael Bricker, Senior Managing Director at Stonepeak.
Driving Towards a Greener Future
Clean Energy is presently establishing a collection of renewable natural gas (RNG) production facilities at various dairies nationwide.
The initial venture involves the production of RNG in Texas, which is then distributed to the transportation market in Oregon through the state's low-carbon fuels program.
Several other facilities are nearing completion in their development stages. Simultaneously, the company is enhancing its RNG fueling infrastructure, presently encompassing more than 600 stations throughout North America.
Sustainable Trucking on the Horizon
This expansion aligns with Cummins's ongoing testing of a new, larger natural gas engine designed for heavy-duty trucks.
Collaborating with major companies such as Walmart, Werner, Knight Swift, and UPS, these fleets are experiencing heightened fuel efficiency, increased torque, and power compared to previous models.
Importantly, this innovation results in a substantial reduction in greenhouse gas (GHG) and nitrogen oxide (NOx) emissions compared to traditional diesel engines. The industry is eagerly anticipating the commercial launch of the Cummins X15N engine in 2024.
Mitigating Environmental Impact
RNG, a biogenic fuel derived entirely from organic waste at facilities like dairy farms, is crucial in mitigating environmental impact.
Agriculture contributes to over 10% of U.S. GHG emissions, while the transportation sector accounts for an additional 28%, according to the U.S. Environmental Protection Agency.
The capture of methane from farm waste serves to decrease these emissions significantly. When utilized as a transportation fuel, RNG derived from captured methane leads to a substantial reduction in GHG emissions on a lifecycle basis compared to diesel.
This environmentally friendly characteristic enables RNG to attain a negative carbon-intensity score from the California Air Resources Board, acknowledging the emission reduction both at the source and during vehicle operation.