Key insights
- Opal Fuels is positioned to benefit from the increasing adoption of Renewable Natural Gas (RNG) in heavy-duty trucking, driven by its cost advantage over diesel and existing infrastructure. Cummins' new RNG engine and strong demand from logistics giants like Amazon, UPS, and FedEx signal a significant growth trend. With oil prices expected to rise, RNG offers a compelling alternative, suggesting a positive outlook for companies in this space and potentially impacting the transportation and energy sectors.
Opal Fuels produces and dispenses RNG fuel for heavy duty trucking. If you don’t know anything about RNG fuel, it is about 30%-50% cheaper than diesel. The infrastructure is already built (unlike electric charging for heavy duty trucking) and it’s a proven technology. RNG has been used in refuse and public transport (garbage trucks and city buses) for more than a decade. Cummins just started production on the X15N engine which runs on RNG and demand has been really hot. Evidently it has comparable power to diesel but a high price tag. Nevertheless. you’ve probably started seeing Amazon, UPS, and FedEx trucks that have the CNG or RNG sticker on them. A quick internet search will give you insight into the acceleration and adoption. Given that Oil prices are only going higher in the near term, it seems like a solid play. Not to mention, Opal fuels already has solid revenue and profit growth y/y.