v3.26.1
Leases
 12 Months Ended
Dec. 31, 2025
Leases [Abstract]  
Leases
7. LEASES
Lessor Contracts
Power Purchase Agreements
Power purchase agreements ("PPAs") are for the sale of electricity generated at our Renewable Power facilities. All of our Renewable Power facilities operate under fixed pricing or indexed pricing based on market prices. Two of our Renewable Power facilities provide the purchaser with the right to use the power plant during the contract term and are classified as operating leases.
Fuel Provider Agreements
Fuel provider agreements ("FPAs") are for the sale of brown gas, service and maintenance of sites. The Company is contracted to design and build a Fueling Station on the customer's property in exchange for the Company providing CNG/RNG and related services to the customer for a determined number of years. The majority of our FPAs include a lease component that provides the customer with the right to use the Fueling Stations and these arrangements are classified as operating leases.
On September 26, 2025, the Company amended its agreement with a customer to extend the lease term through October 31, 2031, with automatic annual renewals unless either party provides notice. The customer holds a purchase option to acquire the underlying CNG equipment for $1, which the Company is reasonably certain will be exercised. The arrangement includes variable lease payments based on CNG volumes dispensed that are not based on an index or rate. As part of the lease modification, the Company reclassified $2,050 of previously accrued lease receivables as a deferred lease incentive, which will be recognized as a reduction of lease income over the amended lease term. The modification did not change the lease’s classification as an operating lease.
Sales-Type Leases
In 2025, the Company entered into FPAs with customer in Canada and determined that these arrangements meet the criteria for classification as sales‑type leases. At lease commencement, the underlying assets were derecognized and a lease receivable was recorded at the present value of future lease payments, discounted using the rate implicit in the lease. At that time, $7,734 was recognized within fuel station services revenues and $6,363 was recorded in cost of sales - fuel station services.
As of December 31, 2025, a maturity analysis of lease receivables reflecting undiscounted cash flows to be received on an annual basis are as follows:
Fiscal year:
2026$1,557 
20271,596 
20281,636 
20291,677 
20301,719 
Thereafter9,261 
Total undiscounted cash flows17,446 
Less: Discount based on implicit rate9,681 
Plus: Unguaranteed residual asset459 
Net investment in sales-type lease$8,224 
Lessee Contracts
Site Leases
The Company, through its indirectly owned subsidiaries, enters into long‑term site leases on landfills and dairy farms for the construction and operation of its RNG generation facilities. While most site leases require immaterial lease payments, the Company has three material operating lease arrangements within its Central Valley project: one site at the MD Digester (“MD”) and two sites at the VS Digester (“VS1” and “VS2”).
The MD and VS1 site leases became effective in March 2021 and extend through the 20‑year anniversary of the respective Commercial Operation Date (“COD”). Rent payments are fixed over the lease term commencing on the Effective date.
The VS2 site lease became effective in July 2023 and continues through the 20‑year anniversary of COD. Rent payments include fixed 5% escalations beginning on the fifth anniversary of COD and every fifth anniversary thereafter. Rent does not commence until the calendar quarter in which COD occurs, resulting in a rent‑free period between the Effective Date and COD.
These three leases automatically renew for successive two‑year periods, up to a maximum total lease term of 34 years and 11 months from the respective Effective Date. Either party may elect not to renew by providing written notice before the end of the then‑current term and each lease includes termination rights if COD is not achieved within a reasonable period.
During the year ended December 31, 2024, the Company revised the commercial operation date for its leases for MD, VS1 and VS2 which changed the lease term for those leases. The Company treated this as a lease modification and increased its right-of-use asset and corresponding lease liability by $1,109 on its consolidated balance sheets as of December 31, 2024, using the incremental borrowing rate from 7.28% to 7.53%.
The Company also has one site lease associated with one of its FPAs, which it classified as a finance lease based on the terms of the arrangement. During the year ended December 31, 2025, the Company derecognized the ROU asset and corresponding lease liability associated with this lease following a formal release from all future lease obligations by the vendor under the current agreement. The ROU asset had a carrying value of approximately $5,397 at the time of termination. The derecognition resulted in a $600 gain recognized in Other income.
Office Lease
The Company leases office and warehouse space under an operating lease that originally commenced on January 16, 2015. The expiration date of the lease is January 31, 2028 the Company has a single 36‑month renewal option, exercisable through written notice. The lease includes scheduled base rent escalations of 4% annually.
Vehicle Leases
The Company leases vehicles primarily used to perform service and maintenance activities for Fueling Stations operated by OPAL Fuels Station Services, as well as for facility maintenance within its Renewable Power and RNG subsidiaries. The total lease payments represent substantially all of the fair value of the underlying assets and therefore they are recorded as finance leases.
Right-of-use assets and Lease liabilities as of December 31, 2025 and 2024 are as follows:
Location in Balance SheetDecember 31,
2025		December 31,
2024
Assets:
Operating leasesOther long-term assets$13,057 $12,731 
Finance leasesProperty, plant and equipment, net2,725 9,550 
 Total lease right-of-use assets15,782 22,281 
Liabilities:
Short-term operating leasesAccrued expenses and other current liabilities768 780 
Short-term finance leasesAccrued expenses and other current liabilities1,245 2,584 
Long-term operating leasesOther long-term liabilities12,537 12,155 
Long-term finance leasesOther long-term liabilities1,565 7,558 
Total lease liabilities$16,115 $23,077 
The table below presents components of the Company's lease expense for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
20252024
Operating lease expense
$1,652 $1,610 
Amortization of right-of-use assets - finance leases1,493 1,923 
Interest expense on lease liabilities - finance leases292595
Total
$3,437 $4,128 
During the years ended December 31, 2025 and 2024, the Company’s weighted‑average remaining lease terms and weighted‑average discount rates were as follows:
December 31,
2025		December 31,
2024
Weighted average remaining lease term (years)
Operating leases19.4 years20.6 years
Finance leases2.5 years5.9 years
Weighted average discount rate
Operating leases7.4 %7.0 %
Finance leases7.5 %6.7 %
The table below provides the total amount of lease payments on an undiscounted basis on our lease contracts as of December 31, 2025:
Operating LeasesFinance LeasesTotal
Fiscal year:
2026$1,628 $1,389 $3,017 
20271,701 1,055 2,756 
20281,180 471 1,651 
20291,129 129 1,258 
20301,129 80 1,209 
Thereafter18,267 — 18,267 
Total undiscounted cashflows
25,034 3,124 28,158 
Less: Discount based on incremental borrowing rate11,729 314 12,043 
Total lease liabilities$13,305 $2,810 $16,115 
Short‑term lease expense was immaterial for the years ended December 31, 2025 and 2024.
Leases
7. LEASES
Lessor Contracts
Power Purchase Agreements
Power purchase agreements ("PPAs") are for the sale of electricity generated at our Renewable Power facilities. All of our Renewable Power facilities operate under fixed pricing or indexed pricing based on market prices. Two of our Renewable Power facilities provide the purchaser with the right to use the power plant during the contract term and are classified as operating leases.
Fuel Provider Agreements
Fuel provider agreements ("FPAs") are for the sale of brown gas, service and maintenance of sites. The Company is contracted to design and build a Fueling Station on the customer's property in exchange for the Company providing CNG/RNG and related services to the customer for a determined number of years. The majority of our FPAs include a lease component that provides the customer with the right to use the Fueling Stations and these arrangements are classified as operating leases.
On September 26, 2025, the Company amended its agreement with a customer to extend the lease term through October 31, 2031, with automatic annual renewals unless either party provides notice. The customer holds a purchase option to acquire the underlying CNG equipment for $1, which the Company is reasonably certain will be exercised. The arrangement includes variable lease payments based on CNG volumes dispensed that are not based on an index or rate. As part of the lease modification, the Company reclassified $2,050 of previously accrued lease receivables as a deferred lease incentive, which will be recognized as a reduction of lease income over the amended lease term. The modification did not change the lease’s classification as an operating lease.
Sales-Type Leases
In 2025, the Company entered into FPAs with customer in Canada and determined that these arrangements meet the criteria for classification as sales‑type leases. At lease commencement, the underlying assets were derecognized and a lease receivable was recorded at the present value of future lease payments, discounted using the rate implicit in the lease. At that time, $7,734 was recognized within fuel station services revenues and $6,363 was recorded in cost of sales - fuel station services.
As of December 31, 2025, a maturity analysis of lease receivables reflecting undiscounted cash flows to be received on an annual basis are as follows:
Fiscal year:
2026$1,557 
20271,596 
20281,636 
20291,677 
20301,719 
Thereafter9,261 
Total undiscounted cash flows17,446 
Less: Discount based on implicit rate9,681 
Plus: Unguaranteed residual asset459 
Net investment in sales-type lease$8,224 
Lessee Contracts
Site Leases
The Company, through its indirectly owned subsidiaries, enters into long‑term site leases on landfills and dairy farms for the construction and operation of its RNG generation facilities. While most site leases require immaterial lease payments, the Company has three material operating lease arrangements within its Central Valley project: one site at the MD Digester (“MD”) and two sites at the VS Digester (“VS1” and “VS2”).
The MD and VS1 site leases became effective in March 2021 and extend through the 20‑year anniversary of the respective Commercial Operation Date (“COD”). Rent payments are fixed over the lease term commencing on the Effective date.
The VS2 site lease became effective in July 2023 and continues through the 20‑year anniversary of COD. Rent payments include fixed 5% escalations beginning on the fifth anniversary of COD and every fifth anniversary thereafter. Rent does not commence until the calendar quarter in which COD occurs, resulting in a rent‑free period between the Effective Date and COD.
These three leases automatically renew for successive two‑year periods, up to a maximum total lease term of 34 years and 11 months from the respective Effective Date. Either party may elect not to renew by providing written notice before the end of the then‑current term and each lease includes termination rights if COD is not achieved within a reasonable period.
During the year ended December 31, 2024, the Company revised the commercial operation date for its leases for MD, VS1 and VS2 which changed the lease term for those leases. The Company treated this as a lease modification and increased its right-of-use asset and corresponding lease liability by $1,109 on its consolidated balance sheets as of December 31, 2024, using the incremental borrowing rate from 7.28% to 7.53%.
The Company also has one site lease associated with one of its FPAs, which it classified as a finance lease based on the terms of the arrangement. During the year ended December 31, 2025, the Company derecognized the ROU asset and corresponding lease liability associated with this lease following a formal release from all future lease obligations by the vendor under the current agreement. The ROU asset had a carrying value of approximately $5,397 at the time of termination. The derecognition resulted in a $600 gain recognized in Other income.
Office Lease
The Company leases office and warehouse space under an operating lease that originally commenced on January 16, 2015. The expiration date of the lease is January 31, 2028 the Company has a single 36‑month renewal option, exercisable through written notice. The lease includes scheduled base rent escalations of 4% annually.
Vehicle Leases
The Company leases vehicles primarily used to perform service and maintenance activities for Fueling Stations operated by OPAL Fuels Station Services, as well as for facility maintenance within its Renewable Power and RNG subsidiaries. The total lease payments represent substantially all of the fair value of the underlying assets and therefore they are recorded as finance leases.
Right-of-use assets and Lease liabilities as of December 31, 2025 and 2024 are as follows:
Location in Balance SheetDecember 31,
2025		December 31,
2024
Assets:
Operating leasesOther long-term assets$13,057 $12,731 
Finance leasesProperty, plant and equipment, net2,725 9,550 
 Total lease right-of-use assets15,782 22,281 
Liabilities:
Short-term operating leasesAccrued expenses and other current liabilities768 780 
Short-term finance leasesAccrued expenses and other current liabilities1,245 2,584 
Long-term operating leasesOther long-term liabilities12,537 12,155 
Long-term finance leasesOther long-term liabilities1,565 7,558 
Total lease liabilities$16,115 $23,077 
The table below presents components of the Company's lease expense for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
20252024
Operating lease expense
$1,652 $1,610 
Amortization of right-of-use assets - finance leases1,493 1,923 
Interest expense on lease liabilities - finance leases292595
Total
$3,437 $4,128 
During the years ended December 31, 2025 and 2024, the Company’s weighted‑average remaining lease terms and weighted‑average discount rates were as follows:
December 31,
2025		December 31,
2024
Weighted average remaining lease term (years)
Operating leases19.4 years20.6 years
Finance leases2.5 years5.9 years
Weighted average discount rate
Operating leases7.4 %7.0 %
Finance leases7.5 %6.7 %
The table below provides the total amount of lease payments on an undiscounted basis on our lease contracts as of December 31, 2025:
Operating LeasesFinance LeasesTotal
Fiscal year:
2026$1,628 $1,389 $3,017 
20271,701 1,055 2,756 
20281,180 471 1,651 
20291,129 129 1,258 
20301,129 80 1,209 
Thereafter18,267 — 18,267 
Total undiscounted cashflows
25,034 3,124 28,158 
Less: Discount based on incremental borrowing rate11,729 314 12,043 
Total lease liabilities$13,305 $2,810 $16,115 
Short‑term lease expense was immaterial for the years ended December 31, 2025 and 2024.
Leases
7. LEASES
Lessor Contracts
Power Purchase Agreements
Power purchase agreements ("PPAs") are for the sale of electricity generated at our Renewable Power facilities. All of our Renewable Power facilities operate under fixed pricing or indexed pricing based on market prices. Two of our Renewable Power facilities provide the purchaser with the right to use the power plant during the contract term and are classified as operating leases.
Fuel Provider Agreements
Fuel provider agreements ("FPAs") are for the sale of brown gas, service and maintenance of sites. The Company is contracted to design and build a Fueling Station on the customer's property in exchange for the Company providing CNG/RNG and related services to the customer for a determined number of years. The majority of our FPAs include a lease component that provides the customer with the right to use the Fueling Stations and these arrangements are classified as operating leases.
On September 26, 2025, the Company amended its agreement with a customer to extend the lease term through October 31, 2031, with automatic annual renewals unless either party provides notice. The customer holds a purchase option to acquire the underlying CNG equipment for $1, which the Company is reasonably certain will be exercised. The arrangement includes variable lease payments based on CNG volumes dispensed that are not based on an index or rate. As part of the lease modification, the Company reclassified $2,050 of previously accrued lease receivables as a deferred lease incentive, which will be recognized as a reduction of lease income over the amended lease term. The modification did not change the lease’s classification as an operating lease.
Sales-Type Leases
In 2025, the Company entered into FPAs with customer in Canada and determined that these arrangements meet the criteria for classification as sales‑type leases. At lease commencement, the underlying assets were derecognized and a lease receivable was recorded at the present value of future lease payments, discounted using the rate implicit in the lease. At that time, $7,734 was recognized within fuel station services revenues and $6,363 was recorded in cost of sales - fuel station services.
As of December 31, 2025, a maturity analysis of lease receivables reflecting undiscounted cash flows to be received on an annual basis are as follows:
Fiscal year:
2026$1,557 
20271,596 
20281,636 
20291,677 
20301,719 
Thereafter9,261 
Total undiscounted cash flows17,446 
Less: Discount based on implicit rate9,681 
Plus: Unguaranteed residual asset459 
Net investment in sales-type lease$8,224 
Lessee Contracts
Site Leases
The Company, through its indirectly owned subsidiaries, enters into long‑term site leases on landfills and dairy farms for the construction and operation of its RNG generation facilities. While most site leases require immaterial lease payments, the Company has three material operating lease arrangements within its Central Valley project: one site at the MD Digester (“MD”) and two sites at the VS Digester (“VS1” and “VS2”).
The MD and VS1 site leases became effective in March 2021 and extend through the 20‑year anniversary of the respective Commercial Operation Date (“COD”). Rent payments are fixed over the lease term commencing on the Effective date.
The VS2 site lease became effective in July 2023 and continues through the 20‑year anniversary of COD. Rent payments include fixed 5% escalations beginning on the fifth anniversary of COD and every fifth anniversary thereafter. Rent does not commence until the calendar quarter in which COD occurs, resulting in a rent‑free period between the Effective Date and COD.
These three leases automatically renew for successive two‑year periods, up to a maximum total lease term of 34 years and 11 months from the respective Effective Date. Either party may elect not to renew by providing written notice before the end of the then‑current term and each lease includes termination rights if COD is not achieved within a reasonable period.
During the year ended December 31, 2024, the Company revised the commercial operation date for its leases for MD, VS1 and VS2 which changed the lease term for those leases. The Company treated this as a lease modification and increased its right-of-use asset and corresponding lease liability by $1,109 on its consolidated balance sheets as of December 31, 2024, using the incremental borrowing rate from 7.28% to 7.53%.
The Company also has one site lease associated with one of its FPAs, which it classified as a finance lease based on the terms of the arrangement. During the year ended December 31, 2025, the Company derecognized the ROU asset and corresponding lease liability associated with this lease following a formal release from all future lease obligations by the vendor under the current agreement. The ROU asset had a carrying value of approximately $5,397 at the time of termination. The derecognition resulted in a $600 gain recognized in Other income.
Office Lease
The Company leases office and warehouse space under an operating lease that originally commenced on January 16, 2015. The expiration date of the lease is January 31, 2028 the Company has a single 36‑month renewal option, exercisable through written notice. The lease includes scheduled base rent escalations of 4% annually.
Vehicle Leases
The Company leases vehicles primarily used to perform service and maintenance activities for Fueling Stations operated by OPAL Fuels Station Services, as well as for facility maintenance within its Renewable Power and RNG subsidiaries. The total lease payments represent substantially all of the fair value of the underlying assets and therefore they are recorded as finance leases.
Right-of-use assets and Lease liabilities as of December 31, 2025 and 2024 are as follows:
Location in Balance SheetDecember 31,
2025		December 31,
2024
Assets:
Operating leasesOther long-term assets$13,057 $12,731 
Finance leasesProperty, plant and equipment, net2,725 9,550 
 Total lease right-of-use assets15,782 22,281 
Liabilities:
Short-term operating leasesAccrued expenses and other current liabilities768 780 
Short-term finance leasesAccrued expenses and other current liabilities1,245 2,584 
Long-term operating leasesOther long-term liabilities12,537 12,155 
Long-term finance leasesOther long-term liabilities1,565 7,558 
Total lease liabilities$16,115 $23,077 
The table below presents components of the Company's lease expense for the years ended December 31, 2025 and 2024:
Year Ended
December 31,
20252024
Operating lease expense
$1,652 $1,610 
Amortization of right-of-use assets - finance leases1,493 1,923 
Interest expense on lease liabilities - finance leases292595
Total
$3,437 $4,128 
During the years ended December 31, 2025 and 2024, the Company’s weighted‑average remaining lease terms and weighted‑average discount rates were as follows:
December 31,
2025		December 31,
2024
Weighted average remaining lease term (years)
Operating leases19.4 years20.6 years
Finance leases2.5 years5.9 years
Weighted average discount rate
Operating leases7.4 %7.0 %
Finance leases7.5 %6.7 %
The table below provides the total amount of lease payments on an undiscounted basis on our lease contracts as of December 31, 2025:
Operating LeasesFinance LeasesTotal
Fiscal year:
2026$1,628 $1,389 $3,017 
20271,701 1,055 2,756 
20281,180 471 1,651 
20291,129 129 1,258 
20301,129 80 1,209 
Thereafter18,267 — 18,267 
Total undiscounted cashflows
25,034 3,124 28,158 
Less: Discount based on incremental borrowing rate11,729 314 12,043 
Total lease liabilities$13,305 $2,810 $16,115 
Short‑term lease expense was immaterial for the years ended December 31, 2025 and 2024.