XML 38 R22.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Taxes  
Income Taxes

Note 13 —Income Taxes

The components of loss before income taxes for the years ended December 31, 2022, 2023 and 2024 are as follows (in thousands):

​

​

​

​

​

​

​

​

​

​

​

    

2022

    

2023

    

2024

U.S.

​

$

(58,431)

​

$

(99,749)

​

$

(79,710)

Foreign

​

 

(939)

​

 

(772)

​

 

(1,287)

Total loss before income taxes

​

$

(59,370)

​

$

(100,521)

​

$

(80,997)

​

The provision for income taxes for the years ended December 31, 2022, 2023 and 2024 consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

    

2022

    

2023

    

2024

Current:

 

​

  

 

​

  

 

​

  

State

​

$

47

​

$

92

​

$

62

Foreign

​

 

—

​

 

—

​

 

—

Total current

​

 

47

​

 

92

​

 

62

Deferred:

​

 

  

​

 

  

​

 

  

Federal

​

 

78

​

 

(318)

​

 

876

State

​

 

95

​

 

(197)

​

 

1,754

Total deferred

​

 

173

​

 

(515)

​

 

2,630

Total expense

​

$

220

​

$

(423)

​

$

2,692

​

A reconciliation of the income tax expense for the years ended December 31, 2022, 2023 and 2024, with the amount computed using the federal income tax rate of 21% as of December 31, 2022, 2023 and 2024, consists of the following (in thousands):

​

​

​

​

​

​

​

​

​

​

​

    

2022

    

2023

    

2024

Computed expected tax (benefit)

​

$

(12,468)

​

$

(21,110)

​

$

(17,009)

Nondeductible expenses

​

 

4,218

​

 

1,062

​

 

2,892

Tax rate differential on foreign earnings

​

 

197

​

 

162

​

 

270

Joint ventures

​

 

441

​

 

1,035

​

 

2,297

Amazon warrants

​

 

1,134

​

​

5,381

​

​

10,114

Tax credits

​

 

(6,065)

​

 

(6,250)

​

 

(7,208)

Other

​

 

843

​

 

(48)

​

 

1,447

Change in valuation allowance

​

 

11,920

​

 

19,345

​

 

9,889

Total tax expense

​

$

220

​

$

(423)

​

$

2,692

​

The Company recorded a federal tax benefit of $5.8 million, $6.2 million and $7.2 million related to the exclusion of AFTC associated with 2022, 2023 and 2024 fuel sales in excess of its fuel tax obligation, respectively. These amounts increased the Company’s deferred tax asset and the Company’s deferred tax asset valuation allowance.

Deferred tax assets and liabilities result from differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax effect of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2023 and 2024 are as follows (in thousands):

​

​

​

​

​

​

​

​

    

2023

    

2024

Deferred tax assets:

 

​

  

 

​

  

Accrued expenses

​

$

6,178

​

$

6,915

Lease obligations

​

​

25,574

​

​

25,993

Alternative minimum tax and general business credits

​

 

7,011

​

 

7,011

Stock option expense

​

 

11,756

​

 

11,280

Amazon warrants

​

​

20,002

​

​

18,271

Other

​

 

6,096

​

 

7,455

Depreciation and amortization

​

​

4,270

​

​

4,404

Loss carryforwards

​

 

152,310

​

 

161,931

Total deferred tax assets

​

 

233,197

​

 

243,260

Less valuation allowance

​

 

(202,242)

​

 

(211,709)

Net deferred tax assets

​

 

30,955

​

 

31,551

Deferred tax liabilities:

​

 

  

​

 

  

Right-of-use assets

​

​

(24,650)

​

​

(24,196)

Commodity swap contracts

​

 

(741)

​

 

(706)

Goodwill

​

 

(3,160)

​

 

(3,473)

Investments in joint ventures and partnerships

​

 

(2,989)

​

 

(6,391)

Total deferred tax liabilities

​

 

(31,540)

​

 

(34,766)

Net deferred tax liabilities

​

$

(585)

​

$

(3,215)

​

As of December 31, 2024, the Company had federal, state and foreign net operating loss carryforwards of approximately $618.6 million, $512.6 million and $6.1 million, respectively. The Company’s federal, state and foreign net operating loss carryforwards will, if not utilized, expire beginning in 2027, 2028 and 2033, respectively. The Company also has federal tax credit carryforwards of $8.2 million that will expire beginning in 2026. Due to the change of ownership provisions of Internal Revenue Code Section 382, utilization of a portion of the Company’s net operating loss and tax credit carryforwards may be limited in future periods.

In assessing the realizability of the net deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers projected future taxable income and tax planning strategies in making this assessment. As of December 31, 2023 and 2024, the Company provided a valuation allowance of $202.2 million and $211.7 million, respectively, to reduce the net deferred tax assets due to uncertainty surrounding the realizability of these assets. The increase in the valuation allowance for the year ended December 31, 2024 of $9.5 million was primarily attributable to an increase in losses without benefit.

For the year ended December 31, 2024, the Company did not have any offshore earnings of certain non-U.S. subsidiaries which are permanently reinvested outside the United States.

The Company does not recognize the impact of a tax position in its financial statements unless the position is more likely than not to be sustained, based on the technical merits of the position. The Company has unrecognized tax benefits of $64.3 million as of December 31, 2024 that, if recognized, would not result in a tax benefit since it would be fully offset with a valuation allowance.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the years ended December 31, 2022, 2023 and 2024 (in thousands):

​

​

​

​

Unrecognized tax benefit—December 31, 2022

 

$

54,672

Gross increases—tax positions in current year

 

​

4,517

Gross increases—tax positions in prior year

​

​

—

Gross decreases—tax positions in prior year

​

​

(93)

Unrecognized tax benefit—December 31, 2023

​

​

59,096

Gross increases—tax positions in current year

​

​

5,285

Gross increases—tax positions in prior year

​

​

—

Gross decreases—tax positions in prior year

​

​

(92)

Unrecognized tax benefit—December 31, 2024

​

$

64,289

​

The increase in the Company’s unrecognized tax benefits in the years ended December 31, 2024 and December 31, 2023 is primarily attributable to the portion of AFTC offset by the fuel tax the Company collected from its customers and the warrants issued to its customer.

ASC 740, Income Taxes, requires the Company to accrue interest and penalties where there is an underpayment of taxes based on the Company’s best estimate of the amount ultimately to be paid. The Company’s policy is to recognize interest accrued related to unrecognized tax benefits and penalties as income tax expense. The Company recognized interest and penalties related to uncertain tax positions of $0.0 million for each of the years ended December 31, 2022, 2023 and 2024.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. The Company’s tax years from 2020 to 2024 are subject to examination by various tax authorities. Although the Company is no longer subject to U.S. examination for years before 2021 and to state tax examinations for years before 2020, taxing authorities can adjust the net operating losses that arose in earlier years if and when the net operating losses reduce future income. In addition, the Company is required to indemnify SAFE S.p.A. for taxes that are imposed on CEC for pre-contribution tax periods.

A number of years may elapse before an uncertain tax position is finally resolved. It is often difficult to predict the final outcome or the timing of resolution of an uncertain tax position, but the Company believes that its reserves for income taxes reflect the most probable outcomes. The Company adjusts the reserve, as well as the related interest and penalties, in light of changing facts and circumstances. The amount of penalties accrued is immaterial. Settlement of any particular position would usually require the use of cash and result in the reduction of the related reserve, or there could be a change in the amount of the Company’s net operating loss. The resolution of a matter would be recognized as an adjustment to the provision for income taxes at the effective tax rate in the period of resolution. The Company does not expect a significant increase or decrease in its uncertain tax positions within the next twelve months.

On August 16, 2022, the Inflation Reduction Act of 2022 ("the IRA”) was signed into law. Besides the reinstatement of AFTC for the three year period from January 1, 2022 to December 31, 2024, the IRA offers tax incentives targeting energy transaction and renewables:

●The investment tax credit under Section 48 of the Internal Revenue Code is expanded to include Qualified Biogas Property, which is expected to be available for the RNG dairy projects that the Company has invested or will invest. The investment tax credit rate could range from 6% up to a 50% bonus rate depending on meeting certain wage, apprenticeship, domestic content, and energy community requirements.  
●A new tax credit under Section 45Z of the Internal Revenue Code was introduced to apply to low-emissions transportation fuel produced at a qualified facility and sold by the taxpayer after December 31, 2024 through December 31, 2027. The IRA provides a base credit of 20 cents per gallon or $1.00 per gallon multiplied by an
applicable emission factor if prevailing wage and apprentices requirements are met. The Company’s RNG dairy projects will be eligible for this credit at an increased rate of $1/gallon.
●The alternative fuel refueling property credit under Section 30C of the Internal Revenue Code was reinstated for 2022 and extended an additional 10 years to apply to any property placed in service before January 1, 2033. The base credit amount is 6% with a bonus rate of 30% if wage and registered apprenticeship requirements are met with a maximum credit amount of $100,000 (previously $30,000) per single refueling pump.

The Internal Revenue Service has been granted broad authority to issue regulations or other guidance that could clarify how these taxes will be applied and credits will be eligible. The Company is continuing to evaluate the financial impact of the IRA as additional information becomes available. For the year ended December 31, 2024, four RNG projects that the Company invested in were placed in service and are eligible for the Investment Tax Credits. The Company intends to monetize the tax credits by transferring to third parties. In addition, the Company’s six RNG projects that were placed in service will be eligible for Clean Fuel Production Tax Credit beginning January 1, 2025.