Document:

ex_267900.htm

 

Exhibit 10.3

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

BIOGAS SUPPLY ADDENDUM – VEHICLE FUEL SEGMENT-SUPPLY SIDE

 

This Biogas Supply Addendum (this “Addendum”) is made and entered into effective as of July 22, 2021 (the “Effective Date”), by and between BP Canada Energy Marketing Corp. (“Buyer”), a Delaware corporation, BP Products North America Inc. (“Buyer’s Affiliate”), an Indiana corporation, and Gevo NW Iowa RNG, LLC (“Seller”), a Delaware limited liability company.

 

WHEREAS Buyer and Seller are parties to that certain NAESB Base Contract for Sale and Purchase of Natural Gas dated July 22, 2021 (as amended, supplemented or modified by the parties from time to time) (the “Base Contract”); and

 

WHEREAS, the parties desire to set forth the additional terms and conditions related to Transaction Confirmations for the purchase and sale of Biogas and the associated Green Attributes whereby Buyer will be the party purchasing and receiving the Biogas and Green Attributes, Buyer’s Affiliate will be the party purchasing and receiving the Green Attribute Credits, and Seller will be the party selling and delivering the Biogas and Green Attributes.

 

NOW, THEREFORE, in consideration of the premises and agreements set forth hereinafter, the sufficiency of such consideration being acknowledged by the parties, the parties hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS AND INTERPRETATION

 

1.1    Definitions. The following terms when used herein will have the meanings set forth below. Capitalized terms used in this Addendum but not defined herein are as defined in the Base Contract.

 

“Addendum” has the meaning set forth in the preamble.

 

“Advance Notice Deadline” means the seventh (7th) Business Day before the first Day of the Biogas delivery Month.

 

“Advanced Biofuel” has the meaning as set forth in the EPA RFS program (40 C.F.R. § 80.1401), as may be amended from time to time.

 

“Alternative Fuel” has the meaning as used in the California LCFS.

 

[*****]

 

“[*****] California LCFS Price” means the arithmetic average of the midpoint of the bid and ask daily prices, as assessed and published by [*****] in the [*****] under the heading [*****] (or successor heading or publication).

 

“[*****] Oregon LCFS Price” means the arithmetic average of the midpoint of the bid and ask daily prices, as assessed and published by [*****] in the [*****] under the heading [*****] (or successor heading or publication).

 

“[*****] D3 RIN Price” means the arithmetic average of the midpoint of the high and low daily prices, as published and assessed by [*****] in the [*****] under the heading [*****] for the applicable vintage year (or successor heading or publication).

 

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“[*****] D5 RIN Price” means the arithmetic average of the midpoint of the high and low daily prices, as published and assessed by [*****] in the [*****] under the heading [*****] for the applicable vintage year (or successor heading or publication).

 

“Base Contract” has the meaning set forth in the preamble.

 

“Biogas” means pipeline quality Gas derived from the decomposition of organic matter that meets the EPA RFS eligibility requirements as either an Advanced Biofuel or Cellulosic Biofuel; and/or the California LCFS eligibility requirements as an Alternative Fuel; and/or the Oregon Clean Fuels Program eligibility requirements as Biomethane or Renewable Natural Gas, as applicable. The term “Gas” under Base Contract includes Biogas.

 

“Biogas Contract” means a Contract for the supply of Biogas.

 

“Buyer Biogas Supply Force Majeure Event” has the meaning set forth in Section 3.1.1.

 

“Calendar Quarter” means each individually the periods January 1 through March 31, April 1 through June 30, July 1 through September 30, and October 1 through December 31.

 

“CARB” means the California Air Resources Board, or its successor agency.

 

“California LCFS” means the regulations promulgated by CARB (Cal. Code Regs. tit. 17, §§ 95480 – 90), as may be amended from time to time) applying to any transportation fuel that is sold, supplied, or offered for sale in California.

 

“California LRT Account” means the account set up for the transfer or retirement of California LCFS Credits

 

“Carbon Intensity” or “CI” has the meaning given to it in the California LCFS and/or Oregon Clean Fuels Program.

 

“Cellulosic Biofuel” has the meaning set forth in the EPA RFS program (40 C.F.R. § 80.1401), as may be amended from time to time.

 

“CFP Online System Account” means the account set up for the transfer or retirement of Oregon Clean Fuels Program LCFS Credits.

 

“Co-Marketer” means any third party that is from time to time counterparty to a Co-Marketing Arrangement other than Buyer. As of the Effective Date, Clean Energy Renewable Fuels, LLC is a Co-Marketer.

 

“Co-Marketing Arrangement” means the contract and series of related agreements between Buyer and one or more third parties, pursuant to which the parties thereto have agreed to match existing and future Biogas Contracts (to which Buyer is a party) with existing and future Vehicle Fuel agreements (to which such third party is a party).

 

“Commercial Distribution System” means a gas distribution system that physically connects the supply source to the Vehicle Fuel Producer’s delivery point by pipeline, barge, truck or rail as set out in 40 C.F.R.

§ 80.1426(f)(11)(ii).

 

“Disqualified Biogas” means Gas that was initially determined by the parties upon delivery to be Biogas and subsequently becomes disqualified as Biogas for failure to satisfy requirements of the applicable Green Attribute Program, as determined by the applicable Green Attribute Regulator.

 

“Downstream Distressed Event” has the meaning set forth in Section 3(f) of the Commerial Terms of the Transaction Confirmation.

 

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“EcoEngineers” means TPR Enterprises, LLC d/b/a EcoEngineers, or any successor thereto.

 

“Effective Date” means the date first written above.

 

“EMTS Account” means the EPA Moderated Transaction System Account for RINs.

 

“EPA” means the United States Environmental Protection Agency, or its successor agency.

 

“EPA RFS” means Renewable Fuel Standard established by the Environmental Protection Agency (40 C.F.R (§§ 80.1400 - 80.1474), as may be amended from time to time.

 

“Green Attributes” means any and all environmental attributes, including Lifecycle Greenhouse Gas Emissions, associated with the use of Biogas.

 

“Green Attribute Account” means the applicable Green Attribute Program account where Green Attributes are held by a party and transferred by one party to another party, including the California LRT Account, CFP Online System Account, and EMTS Account.

 

“Green Attribute Credits” means the credits or other similar instruments generated from the Green Attributes associated with the Biogas under a Green Attribute Program, including RINs and LCFS Credits.

 

“Green Attribute Program” means any federal, state or local program for Greenhouse Gas emission reductions that is established, certified, maintained, or recognized by any international, governmental (including U.N., U.S. federal, state, or local agencies), or non-governmental agency from time to time.

 

“Green Attribute Regulator” means the governmental agency responsible for the oversight and administration of the relevant Green Attribute Program.

 

“Greenhouse Gas” means carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydroflourocarbons, perfluorocarbons, sulphur hexafluoride, or any other substance or combination of substances that may become regulated or designated as Greenhouse Gases under any federal, state or local law or regulation, or any emission reduction registry, trading system, or reporting or reduction program for Greenhouse Gas emission reductions that is established, certified, maintained, or recognized by any international, governmental (including U.N., U.S. federal, state, or local agencies), or non-governmental agency from time to time, in each case measured in increments of one metric tonne of carbon dioxide equivalent.

 

“LCFS Account” means the California LRT Account or CFP Online System Account, as applicable.

 

“LCFS Credits” means credits generated and traded under the California LCFS or the Oregon Clean Fuels Program, with each credit equal to one metric tonne of Carbon Dioxide reductions as compared to the baseline CO2 emissions under the California LCFS or Oregon Clean Fuels Program.

 

“LCFS Price” means the Contract Price for LCFS Credits to be delivered and taken as agreed to by the parties pursuant to the Transaction Confirmation between Buyer and Seller.

 

“LCFS Service Provider” means the company or person the Seller uses to assist it in registering and complying with the California LCFS and Oregon Clean Fuels Program.

 

“LCFS Value Deadline” has the meaning set forth in Section 5.4.

 

“LCFS Value” has the meaning specified in the Transaction Confirmation.

 

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“Lifecycle Greenhouse Gas Emissions” means the aggregate quantity of Greenhouse Gas emissions (including direct emissions and significant indirect emissions from land use changes), as specified in the EPA RFS, California LCFS, or Oregon Clean Fuels Program, related to the full fuel lifecycle, including all stages of fuel and feedstock production and distribution, from feedstock generation or extraction through the distribution and delivery and use of the finished fuel to the ultimate consumer, where the mass values for all greenhouse gases are adjusted to account for their relative global warming potential.

 

[*****]

 

“[*****] California LCFS Price” means the arithmetic average of the midpoint of the high and low daily prices, as assessed and published by [*****] in the daily [*****] under the heading “[*****]" (or successor heading or publication).

 

“[*****] Oregon LCFS Price” means the arithmetic average of the midpoint of the high and low daily prices, as assessed and published by [*****] in the daily [*****] under the heading “[*****]" (or successor heading or publication).

 

“[*****] D3 RIN Price” means the arithmetic average of the midpoint of the high and low daily prices, as assessed and published by [*****] in the daily [*****] under the heading “[*****]” for the applicable vintage year (or successor heading or publication)

 

“Oregon Clean Fuels Program or Oregon CFP” means the regulations promulgated by the Oregon DEQ (OAR 340-253-000, et seq., as may be amended from time to time) applying to any transportation fuel that is produced in or imported into Oregon.

 

“Oregon DEQ” means the Oregon Department of Environmental Quality, or successor agency.

 

[*****]

 

“[*****] California LCFS Price” means the arithmetic average of the midpoint of the high and low daily prices, as assessed and published by [*****] in the [*****] daily report under the heading "[*****]" (or successor heading or publication).

 

“[*****] D3 RIN Price” means the arithmetic average of the midpoint of the high and low daily prices, as assessed and published by [*****] in the [*****] daily report under the heading “[*****]” for the applicable vintage year (or successor heading or publication).

 

“Project” means a Biogas production project that produces Biogas, as more specifically described in an applicable Transaction Confirmation.

 

“Renewable Identification Number (RIN)” is a Renewable Identification Number, as defined in the EPA RFS.

 

“RIN Price” means the Contract Price for RINs to be delivered and taken as agreed to by the parties in accordance with the Transaction Confirmation between Buyer and Seller.

 

“RIN Value Deadline” has the meaning set forth in Section 5.3.

 

“Vehicle Fuel” means compressed natural gas (CNG) or liquefied natural gas (LNG) derived from Biogas and used in transportation vehicles.

 

“Vehicle Fuel Producer” means the vehicle fuel producer(s) listed in the Transaction Confirmation(s) between Buyer and Seller, or provided to Seller in a notice issued by Buyer or Buyer’s Affiliate.

 

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“Vehicle Fuel Producer Biogas Contract” means a contract for the supply of Biogas between Buyer, Buyer’s Affiliate and a Vehicle Fuel Producer.

 

“Vehicle Fuel Producer Force Majeure Event” has the meaning set forth in Section 3.1.1.

 

“Weaver” means Weaver & Tidwell L.L.P., or any successor thereto.

 

 

ARTICLE II. 

 

SPECIFIC TERMS OF PURCHASE AND SALE

 

In addition to the terms and conditions set forth in the Base Contract, the following terms and conditions will govern the purchase and sale of Biogas.

 

2.1         Green Attributes Associated with Biogas. For all Biogas sold and purchased under a Transaction Confirmation between Seller and Buyer, Seller represents and warrants that:

 

(i) Seller has the rights to all Green Attributes associated with the Biogas sold to Buyer and will convey to Buyer all Green Attributes for such Biogas;

 

(ii) the Biogas delivered to Buyer hereunder is from a Project that produces pipeline quality Biogas;

 

(iii) the Biogas shall be delivered to Buyer in accordance with the requirements of the applicable Green Attributes Program in order to preserve the Green Attributes;

 

(iv) each facility producing the Biogas has provided to Seller and/or Buyer the Biogas fuel production facility registrations consistent with Section 2.6 herein; and

 

(v) upon sale of the Biogas by Seller to Buyer, Seller shall transfer all Green Attributes associated with the production of such Biogas.

 

2.2         Daily Contract Quantity Nominations. For the Contract Quantity set forth in the Transaction Confirmation, Seller will provide Buyer with its nominated daily quantity of Biogas at the Delivery Point(s) set forth in the Transaction Confirmation for the specified delivery Month by no later than the Advance Notice Deadline. Volumes will be nominated ratably over the course of the Month, but Seller will have the option to change its daily nominations at the Delivery Point, for any delivery Day during the Month, as long as such nominations are made by Seller by no later than 8:00 a.m. central prevailing time on the Day before the delivery Day. In the event of planned shortage or shutdown, Seller shall provide Buyer with written notice as soon as practicable with the change in its daily nominations. Weekend and holiday volumes will be nominated ratably over the Saturday – Monday or applicable period.

 

2.3         Transaction Confirmation. Notwithstanding Section 1.2 of the Base Contract, a Transaction Confirmation will be entered into by the parties in writing for each transaction in connection with this Addendum, and together with the Base Contract will be governed by the provisions hereof. Notwithstanding any provision of the Base Contract concerning transaction procedures, the parties agree that any Transaction Confirmation must be executed in writing by both parties in order for the Transaction to be binding upon the parties.

 

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2.4         Disqualified Biogas. Each party will promptly notify the other party if any Biogas delivered under a Transaction Confirmation is determined to be Disqualified Biogas. 

 

2.4.1         Seller Fault. If occurrence is not due to a Force Majeure event or Regulatory Event, but due to the fault of Seller, Buyer shall have the right to immediately cease taking delivery of Disqualified Biogas and exercise its remedies under Section 3.2 of the Base Contract. In addition to any other remedies under the Base Contract, Buyer’s Affiliate shall be entitled to a refund in an amount equal to the RIN Value and LCFS Value for the quantity of Disqualified Biogas, in each case to the extent actually paid to Seller.

 

2.4.2         Buyer and/or Buyer’s Affiliate Fault. If occurrence is not due to a Force Majeure event or Regulatory Event, but due to the fault of Buyer or Buyer’s Affiliate, as applicable, Buyer shall not have the right to cease taking delivery of such Disqualified Biogas, and Seller shall have the right to exercise its remedies under Section 3.2 of the Base Contract. 

 

2.4.3         No Fault. If occurrence is due to a Force Majeure event, the terms of those sections shall apply accordingly.

 

2.5         Failure to Produce Vehicle Fuel. In the event that Buyer cannot utilize any Biogas for the production of a Vehicle Fuel, whether due to a Force Majeure event or Event of Default or otherwise, Buyer shall promptly notify Seller in writing. Any such disruption due to a Force Majeure event shall not be considered an Event of Default resulting in Early Termination under the Base Contract.

 

2.6         Further Assurances. Each party will provide the other party such cooperation, additional documentation, certifications or other information as may be reasonably necessary to carry out the purposes of this Addendum (including pursuant to any audit of this Addendum and/or the Transaction Confirmation by a third party), and in order for title to the conveyed Green Attributes to vest in the Buyer (and for Green Attribute Credits to vest in Buyer’s Affiliate).

 

2.8         Adjustments to RIN Value and LCFS Value. In addition to all other remedies under the Base Contract and hereunder, if Gas sold by Seller and purchased by Buyer hereunder originally deemed to be Biogas is not processed into a Vehicle Fuel due to a Downstream Distressed Event or other circumstance, both Parties shall use commercially reasonable efforts to preserve and store the Green Attributes for such volume of Biogas in order to mitigate the impact of such Downstream Distressed Event or circumstance on the RIN Value or LCFS Value of the affected Biogas.

 

2.9         (Reserved)

 

2.10         Indemnifications.

 

2.10.1         Seller. In addition to the indemnity obligations set forth in Section 8.3 of the Base Contract, subject to Section 13 of the Base Contract, Seller agrees to indemnify Buyer and Buyer’s Affiliate and save them harmless from all third-party Claims, losses, liabilities, fines, or penalties to the extent due to Seller’s fault and arising from or out of one or more of the following: (i) title, registrations, attestations and other representations and warranties concerning the Biogas, including, without limitation, the quality thereof; (ii) the transportation of the Biogas to the Delivery Point; (iii) Seller’s negligence, gross negligence or willful misconduct; or (iv) Seller’s breach of the Contract.

 

2.10.2         Buyer. In addition to the indemnity obligations set forth in Section 8.3 of the Base Contract, subject to Section 13 of the Base Contract, Buyer agrees to indemnify Seller and save it harmless from all third-party Claims , losses, liabilities, fines, or penalties to the extent due to Buyer’s fault and arising from or out of one or more of the following: (i) title, registrations, attestations and other representations and warranties concerning the Biogas, including, without limitation, the quality; (ii) the transportation of the Biogas from the Delivery Point; (iii) Buyer’s negligence, gross negligence or willful misconduct; or (iv) Buyer’s breach of the Contract.

 

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2.10.3         Buyer’s Affiliate. Buyer’s Affiliate agrees to indemnify Seller and save it harmless from all Claims, losses, liabilities, fines, or penalties arising out of any third-party claim from any and all persons to the extent due to Buyer’s Affiliate’s fault arising from or out of one or more of the following: (i) Buyer’s Affiliate-provided falsehoods, misrepresentations, material inaccuracies or misleading statement in any supporting documentation, including, without limitation, any registrations or any attestation related to Green Attribute Credit generation delivered under the Contract; (ii) Buyer’s Affiliate’s negligence, gross negligence or willful misconduct; or (iii) Buyer’s Affiliate’s breach of the Contract.

 

ARTICLE III. 

 

FORCE MAJEURE

 

3.1         A new Section 11.8 of the Base Contract is hereby added as follows:

 

“11.8         If an event of Force Majeure prevents a party from delivering or purchasing Gas under this Contract and such event continues (i) for more than one hundred eighty (180) consecutive Days or (ii) for more than two hundred and seventy (270) cumulative Days during any calendar year, either party may terminate the affected Transaction Confirmations. If a Party terminates such transactions pursuant to this Section 11.8, neither Party shall have any further liability with respect to such transactions except that the Buyer shall pay Seller for any amounts due and owing for Gas delivered and received by Buyer, and any Green Attribute Credits generated or to be generated therefrom (if any), prior to such termination, in accordance with the applicable Transaction Confirmation.”

 

 

ARTICLE IV. 

 

DEFAULT AND TERMINATION

 

 

4.1        Additional Event of Default. In addition to the events of default set forth in Section 10.2 of the Base Contract, it shall be an additional Event of Default if either party: (i) commits any fraudulent act; or (ii) makes any material misrepresentation or material inaccuracy or materially misleading statement in any registrations or any attestation related to Green Attribute Credits generated from Biogas purchased under the Transaction Confirmation.

 

 

 

 

 

ARTICLE V. 

 

GREEN ATTRIBUTE CREDIT GENERATION AND PAYMENT

 

 

	
			5.1

				
			Generation of RINs

			

 

5.1.1          Seller Responsibilities and EMTS Account. 

 

(i)          On a mutually agreed Day during the Delivery Period, Seller shall facilitate access for Buyer to any and all records relevant to determining the quantity of Biogas sold and delivered by Seller and purchased and received by Buyer during the prior Month so that Buyer and/or Buyer’s Affiliate can prepare the data regarding RIN generation for submission to the Seller and/or the Seller’s agent, Weaver.

 

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(ii)          Based on the data submission mentioned above in Section 5.1.1(i), Seller shall prepare and submit a PTD to Buyer and/or Buyer’s Affiliate and Seller’s agent, Weaver, and Seller’s agent shall submit such data to the EMTS Account, detailing the following:

 

	 	
			(a)

				
			RIN transferor and transferee company information and EPA company ID;

			

 

	 	
			(b)

				
			Product information including Fuel Code;

			

 

	 	
			(c)

				
			RIN quantity to generate and transfer;

			

 

	 	
			(d)

				
			RIN Year;

			

 

	 	
			(e)

				
			PTD number; and

			

 

	 	
			(f)

				
			Any other data as required by the EPA RFS to generate and allocate RINs as requested by Seller or Seller’s agent, Weaver.

			

 

(iii)         After the PTD has been executed within the EMTS Account, the Seller’s agent shall supply a screenshot of the executed transfer detailing the following:

 

	 	
			(a)

				
			RIN submission identification number and date;

			

 

	 	
			(b)

				
			Transaction identification number date;

			

 

	 	
			(c)

				
			Quantity of RINs generated and transferred to EMTS Account 4320;

			

 

	 	
			(d)

				
			PTD number; and

			

 

	 	
			(e)

				
			Other data necessary to document the generation and transfer of RINs to EMTS Account 4320.

			

 

5.1.2         Buyer and/or Buyer’s Affiliate Responsibilities.

 

(i)         On a mutually agreed Day during the Delivery Period, as specified in the Transaction Confirmation, Buyer shall analyze the Biogas Quantity sold and delivered by Seller and purchased and received by Buyer under the Transaction Confirmation and sold to the Vehicle Fuel Producer which converted such Biogas to a Vehicle Fuel to determine how many RINs were generated during the prior Month.

 

(ii)         Based on the analysis in Section 5.1.2(i) above, Buyer and/or Buyer’s Affiliate shall prepare a report for submission to Seller and/or Seller’s agent, detailing the following:

 

	 	
			(a)

				
			Biogas sold and delivered by Seller and purchased and received by Buyer at the Delivery Point;

			

 

	 	
			(b)

				
			Biogas sold under the Transaction Confirmation during the applicable Month that was subsequently sold by Buyer to Vehicle Fuel Producer cited in the Transaction Confirmation, converted by such Vehicle Fuel Producer to a Vehicle Fuel and distributed as a Vehicle Fuel;

			

 

	 	
			(c)

				
			The quantity of Biogas that Seller has delivered to Buyer and which Buyer is storing until such time as it can be delivered to a Vehicle Fuel Producer; and

			

 

	 	
			(d)

				
			RINs to be created from Biogas purchased by Buyer from Seller.

			

 

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5.2         Process for Generation of LCFS Credits 

 

5.2.1         Seller Responsibilities and LCFS Account Seller Responsibilities.

 

(i) In the Month following the end of a Calendar Quarter during the Delivery Period, Seller shall facilitate access for Buyer or Buyer’s Affiliate to any and all records relevant to determining the number of LCFS Credits generated so that Buyer’s Affiliate can prepare the LCFS Credit generation and allocation data for submission to the Vehicle Fuel Producer or the Vehicle Fuel Producer’s agents.

 

(ii) Seller shall work with an LCFS Service Provider to register with CARB and/or Oregon DEQ and comply with the relevant regulatory provisions of the California LCFS or Oregon Clean Fuels Program, including, but not limited to, pathway registration, LCFS Credit generation, quarterly progress reporting and annual compliance reporting.

 

(iii) Seller shall maintain all records relevant to the production and sale of Biogas to Buyer in accordance with the requirements of the California LCFS and Oregon Clean Fuels Program.

 

5.2.2         Buyer Responsibilities.

 

(i) Every Month during the Delivery Period, Buyer shall analyze the Monthly Biogas Quantity purchased and received by Buyer under the Transaction Confirmation and provide such data to the Vehicle Fuel Producer.

 

(ii) In the Month following the end of a Calendar Quarter, Buyer shall analyze the Monthly Biogas Quantity sold and delivered from Seller under the Transaction Confirmation and converted to a Vehicle Fuel by a Vehicle Fuel Producer to determine the Monthly quantity of LCFS Credits created for the Calendar Quarter. By the end of such month, Buyer and/or Buyer’s Affiliate shall provide a report to the Vehicle Fuel Producer and the Vehicle Fuel Producer’s agents, if applicable, detailing the following:

 

	 	
			(a)

				
			Biogas supplied to Buyer’s meters and subsequently delivered to Vehicle Fuel Producer’s meters;

			

 

	 	
			(b)

				
			The estimated quantity of LCFS Credits to be allocated to Buyer and Vehicle Fuel Producer.

			

 

5.3         RIN Payment Terms. Buyer’s Affiliate shall pay the RIN Value within ten (10) Business Days of the RIN Value Deadline. The “RIN Value Deadline” means, the later of: (i) the date the RINs are generated and transferred into the Buyer’s Affiliate’s EMTS Account; and (ii) Buyer’s or Buyer’s Affiliate’s receipt of Seller’s invoice. Any RIN Value due for RINs not generated and transferred to the Buyer’s Affiliate’s EMTS Account by the RIN Value Deadline, but generated and transferred thereafter, shall be paid in the following Month. No RIN Value shall be paid for RINs not generated and transferred to the Buyer’s Affiliate’s EMTS Account

 

5.4         LCFS Credit Payment Terms. Buyer’s Affiliate shall pay the LCFS Value within ten (10) Business Days of the LCFS Value Deadline. The “LCFS Value Deadline” means, the later of: (i) the date the credits are generated and transferred into the Buyer’s Affiliate’s LCFS Account; and (ii) Buyer’s or Buyer’s Affiliate’s receipt of Seller’s invoice. No LCFS Value shall be paid for LCFS Credits not generated and transferred to the Buyer’s Affiliate’s LCFS Account. Any LCFS Value due for LCFS Credits not generated and transferred to the Buyer’s Affiliate’s LCFS Account by the LCFS Value Deadline, but generated and transferred thereafter, shall be paid in the following Month. No LCFS Value shall be paid for LCFS Credits not generated and transferred to the Buyer’s Affiliate’s LCFS Account.

 

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5.5         Third Party Verification Support Requirement. Seller shall have ninety (90) days from the effective date of the applicable Transaction Confirmation to execute a contract with Weaver (or another service provider acceptable to the Buyer) to work with Weaver to provide all necessary information required for registration with the EPA under the EPA RFS with regard to Q-RINs for RIN generation and allocation. If the Seller opts to generate RINs before receiving Q-RIN status, or if Seller failed to receive Q-RIN status or terminates the contract with Weaver (or some other service provider acceptable to the Buyer), then a Non-QAP Discount shall be applied to the RIN Price until such time as the Seller receives Q-RIN status. For the avoidance of doubt, the Non-QAP Discount is only applicable for such RINs that are not Q-RINs.

 

ARTICLE VI. BIOGAS REGISTRATION AND COSTS

 

6.1.      Biogas Registration. Prior to delivery of the Biogas to Buyer, Seller or its designee shall submit to the Green Attribute Regulator any and all documentation required by such Green Attribute Regulator. This documentation will include, but is not limited to, all documentation required to certify that production and transportation of the Biogas from its point of production to the Delivery Point stated in the Transaction Confirmation is compliant with the transportation routing or pathing requirements of the applicable Green Attribute Program. Such documentation may include, but is not limited to, any affidavits, reporting, or attestations required by the Green Attribute Regulator. With respect to RINs and LCFS Credits, Seller or its designee shall submit to EPA and CARB or the Oregon DEQ, as applicable, and provide Buyer and Buyer’s Affiliate with copies, of any and all documentation required by the, EPA, CARB, or Oregon DEQ to certify that the Biogas is an Advanced Biofuel or Cellulosic Biofuel that can generate D Code 3 or D Code 5 RINs (with respect to the EPA RFS) and create a low carbon intensity pathway (with respect to CARB or Oregon DEQ) for generation of LCFS Credits (to the extent that sales of the Biogas Vehicle Fuel are contemplated in California or Oregon).

 

6.2.      Renewable Fuel Standard Registration Cost. Seller and Buyer’s Affiliate will share equally all initial costs associated with Registration of the production facilities and fuel pathways in line with EPA requirements to provide RINs and for registration under the QAP. Seller will cooperate with Buyer’s Affiliate and provide all necessary information required to complete registration. Seller and Buyer’s Affiliate will share equally any ongoing reporting and costs associated with integrity and compliance of the pathway, including QAP costs in Section II.6 (Third Party Verification Support Requirement).

 

6.3      LCFS Registration Cost. Seller and Buyer’s Affiliate will share equally all initial costs associated with registration of the production facilities and fuel pathways in line with CARB and Oregon DEQ requirements to generate LCFS Credits. Any ongoing costs associated with registration of the production facilities shall be shared equally by Seller and Buyer’s Affiliate, irrespective of the Party charged with such costs. Seller will cooperate with Buyer’s Affiliate and provide all necessary information required to complete registration. Seller and Buyer’s Affiliate will share equally any ongoing reporting and costs associated with integrity and compliance of the pathway.

 

 

ARTICLE VII

 

MISCELLANEOUS

 

 

7.1         [Reserved].

 

7.2       Authority to Execute. Each of the parties to this Addendum represents and warrants that, as of the Effective Date: (i) it has full and complete authority to enter into and perform this Addendum; (ii) the person who executes this Addendum on its behalf has full and complete authority to do so and is empowered to bind it thereby; and (iii) it is not insolvent and has not sought protection from its creditors under the United States Bankruptcy Code, or under any similar laws.

 

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7.3         Counterparts, Interpretation. This Addendum may be executed in multiple counterparts, each of which will constitute an original and all of which together will constitute one and the same instrument. The headings and subheadings contained in this Addendum are used solely for convenience and shall not be used to construe or interpret the provisions of this Addendum. The language used in this Addendum is the product of both parties’ efforts and each party irrevocably waives the benefit of any rule of contract construction which disfavors the drafter of a contract or the drafter of specific language in a contract. In the event of any inconsistency between this Addendum, Transaction Confirmation and the Base Contract, the terms to govern shall be in the following priority: (i) Transaction Confirmation, (ii) Addendum, and (iii) Base Contract.

 

7.4          One Agreement. The parties agree and acknowledge that this Addendum shall be effective for any and all Biogas purchases and sales commencing on the date first written above and shall be considered part of the Contract as such term is defined in the NAESB General Terms and Conditions, but shall not be considered an “addendum” so as to constitute a part of the Base Contract. Accordingly, the parties agree and acknowledge that this Addendum is part and parcel to the Contract involving the purchase and sale of Biogas, and accordingly the Base Contract, this Addendum and any Transaction Confirmation shall be deemed to constitute one integrated agreement for all purposes; provided however, that this Addendum may be terminated, separate and apart from the Gas transactions under the Contract, in accordance with the terms and conditions set forth in this Addendum, necessarily resulting in the termination of any and all Biogas transactions as a result of: (i) an Event of Default under the Base Contract; (ii) pursuant to the termination rights set forth herein; or (iii) the parties otherwise mutually agree in writing to terminate this Addendum. To the extent that either of the foregoing in (i) or (ii) occurs, the Addendum will terminate on the date the event in (i) or (ii) occurs.

 

7.5         Survival of Terms. To the extent that this Addendum is terminated, the parties agree that any and all terms and conditions of this Addendum that are necessary to effectuate the parties’ rights and remedies as a result of an Event of Default will survive the termination of this Addendum until such time as the rights and remedies and all disputes related thereto are fully and finally resolved.

 

7.6        Governing Law. The law governing the Base Contract shall apply to this Addendum, except to the extent that the Green Attribute Regulator, together with regulations and decisions promulgated under such Green Attribute Program, are applicable to the purchase and sales of Biogas.

 

7.7         Buyer’s Affiliate. Buyer's Affiliate is executing this Addendum solely for the purpose of allowing the parties to transfer the Green Attribute Credits generated from the use of the Biogas sold as a Vehicle Fuel pursuant to any Transaction Confirmation directly to Buyer's Affiliate, and to allow for payments for such Green Attribute Credits to be made directly to or from Buyer's Affiliate. Title to the Gas, Biogas and Green Attributes shall pass to Buyer as set forth in Section 8.1 of the Base Contract. Title to the Green Attribute Credits shall pass to Buyer's Affiliate upon transfer to Buyer's Affiliate's applicable Green Attribute Credit Account. All obligations of Buyer under the Base Contract related to generation of Green Attribute Credits and any pricing associated with such Green Attribute Credits shall be satisfied by Buyer's Affiliate. For any Transaction Confirmations entered into under this Biogas Addendum, the cover page of the Base Contract shall be amended to add Buyer’s Affiliate’s contact information as shown on Exhibit A.

 

7.8         Storage of Biogas. From time to time, Biogas delivered by Seller to Buyer may be put into storage by Buyer, for one of three reasons: (i) if the Green Attribute pathway has not yet been approved by the EPA but the plant is flowing Biogas, then Buyer shall store the Biogas in accordance with the terms of the Green Attribute Program until such time as the pathway is approved; (ii) if the Biogas is intended to produce Q-RINs, then the Buyer shall store Biogas until such time as the QAP process is completed; or (iii) if the Biogas has been delivered to Buyer but Buyer cannot deliver it to a VFP until a subsequent Month, then Buyer may store the Biogas until such time as it can deliver the Biogas to the VFP.

 

If Biogas is stored pursuant to Section 7.8(i), Buyer and Seller shall share equally all costs associated with such storage. If Biogas is stored pursuant to Sections 7.8(ii) or (iii), Buyer shall pay for any and all costs associated with such storage. If Biogas is stored by Buyer, Buyer shall provide Seller with a report detailing the quantity stored, in accordance with Section 5.1.2(ii)(c) above. In the event any stored Biogas is deemed Disqualified Biogas (for example, because the pathway is not approved by the EPA), Seller shall not be entitled to payment of any anticipated Green Attribute Credits in accordance with Section 2.4.

 

Confidential

11

 

 

7.9       Misreporting. If any report submitted to EPA, CARB or Oregon DEQ is incorrect (a “Misreport”), each Party shall work together in good faith with the other Party and any relevant VFP to correct such Misreport. If, because of such Misreport, one Party’s environmental compliance obligation has increased or decreased compared to what that Party’s obligation should have been had there been no Misreport, then the Parties agree to effectuate a timely transfer of LCFS Credits at no cost so that each Parties’ environmental compliance obligation related to this transaction is what it would have been had no Misreport occurred.  If, either of the Parties are fined and/or penalized by an Environmental Regulator as a result of the Misreport, then the  Misreporting Party shall indemnify the other Party for such fines or penalties, but only to the extent such fine or penalty arises directly from the Misreport.  The Misreporting Party shall pay the other Party within ten (10) business days of receiving the other Party’s invoice in respect thereof.

 

7.10         Amendment to Base Contract.

 

	 	
			(i)

				
			Section 3.2 of the Base Contract is amended by deleting it in its entirety and replacing it with the following:

			

 

“3.2 The sole and exclusive remedy of the parties in the event of a breach of a Firm obligation to deliver or receive Gas, RINs, or LCFS Credits shall be recovery of the following:

 

	 	
			(i)

				
			in the event of a breach by Seller on any Day(s), payment by Seller to Buyer in an amount equal to:

			

 

	 	
			(a)

				
			with respect to the Gas, the positive difference, if any, between the purchase price paid by Buyer utilizing the Cover Standard and the Contract Price, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually delivered by Seller for such Day(s) excluding any quantity for which no replacement is available, plus

			

 

	 	
			(b)

				
			with respect to RINs and/or LCFS Credits, as applicable, the positive difference, if any, between the purchase price paid by Buyer utilizing the RIN or LCFS Cover Standard and the RIN Price or LCFS Price, as applicable, multiplied by the difference between the RIN Quantity or LCFS Quantity, as applicable, and the quantity actually delivered by Seller for such Day(s) excluding any quantity for which no replacement is available; or

			

 

	 	
			(ii)

				
			in the event of a breach by Buyer on any Day(s), payment by Buyer to Seller in an amount equal to

			

 

	 	
			(a)

				
			with respect to the Gas, the positive difference, if any, between the Contract Price and the price received by Seller utilizing the Cover Standard for the resale of such Gas, adjusted for commercially reasonable differences in transportation costs to or from the Delivery Point(s), multiplied by the difference between the Contract Quantity and the quantity actually taken by Buyer for such Day(s) excluding any quantity for which no sale is available, plus

			

 

Confidential

12

 

 

	 	
			(b)

				
			With respect to RINs and/or LCFS Credits, as applicable, the positive difference, if any, between the RIN Price or LCFS Price, as applicable, and the price received by Seller utilizing the RIN or LCFS Cover Standard for the resale of such RINs or LCFS Credits, multiplied by the difference between the RIN Quantity or LCFS Quantity, as applicable, and the quantity actually delivered to Buyer’s Affiliate for such Day(s) excluding any quantity for which no sale is available, plus

			

 

	 	
			(iii)

				
			in the event that Buyer has used commercially reasonable efforts to replace the Gas and RINs or LCFS Credits, as applicable, or Seller has used commercially reasonable efforts to sell the Gas and RINs or LCFS Credits, as applicable, to a third party, and no such replacement or sale is available for all or any portion of the Contract Quantity of Gas or RIN Quantity or LCFS Quantity, as applicable, then in addition to (i) or (ii) above, as applicable, the sole and exclusive remedy of the performing party with respect to the Gas and RINs or LCFS Credits, as applicable, not replaced or sold shall be an amount equal to any unfavorable difference between (a) with respect to the Gas, the Contract Price and the Spot Price, adjusted for such transportation to the applicable Delivery Point, multiplied by the quantity of such Gas not replaced or sold, plus (b) with respect to the RINs or LCFS Credits, the RIN Price or LCFS Price, as applicable, and the RIN Spot Price or LCFS Spot Price, as applicable, multiplied by the quantity of such RINs or LCFS Credits, as applicable, not replaced or sold.

			

 

Imbalance Charges shall not be recovered under this Section 3.2, but Seller and/or Buyer shall be responsible for Imbalance Charges, if any, as provided in Section 4.3. The amount of such unfavorable difference shall be payable five Business Days after presentation of the performing party’s invoice, which shall set forth the basis upon which such amount was calculated.”

 

“LCFS Spot Price” as referred to in Section 3.2 of the Base Contract shall mean:

 

	 	
			(a)

				
			For California LCFS Credits: The LCFS Spot Price for California LCFS Credits shall mean the [*****] California LCFS Price for the applicable Calendar Quarter of Biogas delivery. If there is no [*****] California LCFS Price published for the applicable Calendar Quarter of Biogas delivery, then the LCFS Spot Price shall mean the [*****] California LCFS Price for the applicable Calendar Quarter of Biogas delivery. If there is no [*****] California LCFS Price or [*****] California LCFS Price published for the applicable Calendar Quarter of Biogas delivery, then the LCFS Spot Price for California shall mean the [*****] California LCFS Price for the applicable Calendar Quarter of Biogas delivery. If there is no [*****] California LCFS Price, [*****] California LCFS Price, or [*****] California LCFS Price published on a relevant Day, then the LCFS Spot Price shall mean the price for the first Day for which an [*****] California LCFS Price, [*****] California LCFS Price, or [*****] California LCFS Price is published that follows the relevant Day

			

 

	 	
			(b)

				
			For Oregon LCFS Credits:  The LCFS Spot Price for Oregon LCFS Credits shall mean the [*****] Oregon LCS Price for the applicable Calendar Quarter of Biogas Delivery. If there is no [*****] Oregon LCFS Price for the applicable Calendar Quarter of Biogas Delivery, then the LCFS Spot Price shall mean the [*****] Oregon LCFS Price for the applicable Calendar Quarter of Biogas. If there is no [*****] Oregon LCFS Price or [*****] Oregon LCFS Price published on a relevant Day, then the LCFS Spot Price shall mean the price for the first Day for which an [*****] Oregon LCFS Price or [*****] Oregon LCFS Price is published that follows the relevant Day.

			

 

Confidential

13

 

 

“RIN Spot Price” as referred to in Section 3.2 of the Base Contract shall mean the [*****] D3 RIN Price for the applicable Month of Biogas delivery. If there is no [*****] D3 RIN Price published for the applicable Month of Biogas delivery for a particular Day, then the RIN Spot Price for that Day shall mean the [*****] D3 RIN Price for the applicable Month of Biogas delivery. If there are no [*****] D3 RIN Price or [*****] D3 RIN Price published for the applicable Month of Biogas delivery for a particular Day, then the RIN Spot Price for that Day shall mean the [*****] D3 RIN Price for the applicable Month of Biogas delivery. If there is no [*****] D3 RIN Price, [*****] D3 RIN Price, or [*****] D3 RIN Price for a particular Day, then the RIN Spot Price shall mean the price for the first Day for which an [*****] D3 RIN Price, [*****] D3 RIN Price, or [*****] D3 RIN Price is published that follows the relevant Day.

 

“RIN or LCFS Cover Standard” shall mean that if there is an unexcused failure to take or deliver any quantity of RINs or LCFS Credits pursuant to a Transaction Confirmation, then the performing party shall use commercially reasonable efforts to: (i) if Buyer is the performing party, obtain RINs or LCFS Credits; or (ii) if Seller is the performing party, sell RINs or LCFS Credits, in either case, at a commercially reasonable price.”

 

	
			(ii)

				
			Section 10.2(viii) of the Base Contract is amended by deleting the word “second” and replacing it with the word “tenth.”

			

 

	
			(iii)

				
			The following definition is added to Section 2 of the Base Contract:

			

 

“Contract Price” is as defined in the applicable Transaction Confirmation.

 

Confidential

14

 

 

 

IN WITNESS WHEREOF, and with the intent to be legally bound, the parties hereto have caused this Addendum to be executed by their duly authorized officers or representatives as of the Effective Date.

 

	
			BP Canada Energy Marketing Corp. 

			(“Buyer”)

				
			Gevo NW Iowa RNG, LLC

			(“Seller”)

			
	 	 
	 	 
	
			By:        /s/ John Armstrong                                           

			Name: John Armstrong        

			Title: Attorney-In-Fact        

			Date: 7/27/2021        

				
			By:          /s/ Lynn Smull                                       

			Name:     Lynn Smull

			Title:        CFO

			Date:        7/26/2021

			
	 	 
	 	 
	
			BP Products North America Inc.  

			(“Buyer’s Affiliate”)

				 
	 	 
	 	 
	
			By:        /s/ Sean Reavis                                                    

			Name:  Sean Reavis       

			Title:  Vice President       

			Date: 7/28/2021        

				 

 

Confidential

15

 

 

[Biogas Addendum]

 

 

Exhibit A

Buyer’s Affiliate Contact Information

 

 

	
			PARTY A

			BP Products North America Inc.

				
			PARTY NAME

			
	
			30 S Wacker, Suite 900

			Chicago, IL 60606

				
			ADDRESS

			
	
			ACCOUNTING INFORMATION FOR RINS AND LCFS CREDITS

			
	
			BP Products North America Inc.

			30 S. Wacker Drive, Suite 900, Chicago, IL 60606

			ATTN: Settlements

			Phone: 312-594-6951 Fax: 312-594-2165

			EMAIL: producttradingsettlement@bp.com

				
			■         INVOICES

			■         PAYMENTS

			■         SETTLEMENTS

			
	
			BANK:       Citibank NA         

			ABA:         [*****]                  ACCT:         [*****]

			OTHER DETAILS:                                                                                                   

			                                                                                                  

				
			WIRE TRANSFER NUMBERS

			 (IF APPLICABLE)

			
	
			BANK:       Citibank NA         

			ABA:         [*****]                  ACCT:         [*****]

			OTHER DETAILS:                                                                                                   

			                                                                                                  

				
			ACH NUMBERS

			(IF APPLICABLE)

			
	
			ATTN:                                                                                                                              

			                                                                                                                                           

			ADDRESS:

				
			CHECKS

			(IF APPLICABLE)

			

 

Confidential

16ex_267901.htm

 

 

Exhibit 10.4

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

TRANSACTION CONFIRMATION

		
			Date: August 2, 2021

			Contract: 27853

			Confirmation Number: 16471870

			

 

This Transaction Confirmation is subject to the Base Contract for Sale and Purchase of Natural Gas, including the Special Provisions and Biogas Addendum thereto (the “Base Contract”), by and between Buyer and Seller and dated July 22, 2021. The terms of this Transaction Confirmation are binding. Capitalized terms not otherwise defined in this Transaction Confirmation shall have the meaning given in the Base Contract or the Biogas Addendum. For purposes of this Transaction Confirmation, “Gas” as used in the Base Contract shall also include Biogas.

 

	
			BUYER:

			BP Canada Energy Marketing Corp. 

			30 S Wacker

			Chicago, IL 60606

			 

			Attn: John Armstrong

			Phone: 801-939-9159

			 

			Base Contract No. ________________________________

			Transporter: _____________________________________

			Transporter Contract Number: _______________________

			 

			 

			BUYER’S AFFILIATE:

			BP Products North America Inc.

			30 S. Wacker Drive, Suite 900

			Chicago, IL 60606

			 

			Attn: GOA Legal

			Email: GOALegalNotices@bp.com

				
			SELLER:

			Gevo NW Iowa RNG, LLC 

			345 Inverness Drive South, Building C

			Suite 310

			Englewood, CO 80112

			 

			Attn: Tim Cesarek

			Phone: 832-314-5677

			Base Contract No.

			Transporter: _____________________________________

			Transporter Contract Number: _______________________

			

 

I. Commercial Terms

 

 

	 	
			1.

				
			Contract Price

			

 

	 	
			(a)

				
			The Contract Price is equal to the sum of the Biogas Value, plus the RIN Value, plus the LCFS Value. The Contract Price is payment for the Biogas and the Seller’s proportion of RINs and the Seller’s proportion of LCFS Credits (if any were generated from the Biogas hereunder) generated from the sale of the Biogas sold hereunder to Buyer and ultimately sold to a Vehicle Fuel Producer by Buyer or Buyer’s Affiliate.

			

 

In the event that any RINs generated from the Biogas are not Q-RIN, then a [********] discount (“Non-QAP Discount”) shall be applied to the RIN Price applicable to such RINs.

 

	 	
			(b)

				
			Biogas Value.

			

 

	 	
			(i)

				
			  The “Biogas Value” is the product of the Biogas Price on any Day that Biogas is delivered to Buyer multiplied by the portion of the Biogas Quantity delivered on such Day, measured in MMBtus. The Biogas Value is paid by the Buyer.

			

 

	 	
			(ii)

				
			  The “Biogas Price” means [********].

			

 

 

1

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

	 	
			(c)

				
			RIN Value.

			

 

	 	
			(i)

				
			  The “RIN Value” shall be paid by Buyer’s Affiliate and is calculated by multiplying the RIN Price (including any Non-QAP Discount, if applicable) by the RIN Quantity.

			

 

	 	
			(ii)

				
			The “RIN Price” shall be determined as follows:

			

 

	 	
			(1)

				
			If the [********] has been Validated (as defined in clause (3) below), then the RIN Price shall be the average of the [********] for the applicable Month of Biogas delivery.

			

 

	 	
			(2)

				
			If the [********] has not been Validated, then the RIN Price shall be the volume-weighted average cash price realized by Buyer’s Affiliate from the sale of its Portfolio D3 RINs within the applicable Month of Biogas delivery and Buyer’s Affiliate shall use commercially reasonable efforts to maximize the value of the D3 cellulosic RINs by selling such RINs to an unaffiliated third party or by purchasing such RINs directly from the Seller.  If Buyer does not sell all of the RINs, then the RIN Price for the unsold portion shall be the greater of:

			

 

	 	
			(A)

				
			[********] of the average [********] (non-Validated) for the applicable Month of Biogas delivery, and

			

 

	 	
			(B)

				
			the average [********] for the applicable Month of Biogas delivery (non-Validated). 

			

 

	 	
			(3)

				
			Validation.  With respect to an applicable Month of Biogas delivery, the [********] shall be considered validated (“Validated”) for the current-year vintage RIN if the D3 cellulosic RIN has traded, as supported by a published [********], for any ten (10) Business Days in the twenty (20) consecutive Business Day period that immediately precedes the Advance Notice Deadline applicable to such month.  Once the [********] has been Validated, it shall remain Validated for the RINs generated in the then-current vintage year for a three-month period, starting with the month following Validation (See Exhibit B for an example).

			

 

	 	
			(4)

				
			RIN Market and Trades.  For the avoidance of doubt, Seller acknowledges and agrees that (i) the market for RINs may lack liquidity, (ii) Buyer’s Affiliate shall at all times retain control over the evaluation of potential sales of RINs and the ultimate sale of RINs into the market, and (iii) Seller shall have no right to participate in or direct the sales of RINs.

			

 

	 	
			(5)

				
			Seller Election to Generate and Retain RINs In-Kind.  In lieu of receiving the RIN Value as a financial element in the Contract Price, Seller may elect by the Advanced Notice Deadline to retain one hundred percent (100%) of its RINs in-kind for each Biogas delivery Month. If Seller makes such election, then Seller must retain its entire [********] share of RINs for Biogas allocated to Vehicle Fuel Producer(s) and shall establish and manage its EMTS Account required for such RINs.  Seller shall not have the right to present any RINs that it retains in-kind to Buyer for monetization at will.  Any arrangement in which Buyer monetizes such RINs for Seller shall be a separate negotiated transaction that is not included under this Transaction Confirmation.

			

 

	 	
			(d)

				
			LCFS Value.

			

 

	 	
			(i)

				
			The “LCFS Value” shall be paid by Buyer’s Affiliate and is calculated by summing all the LCFS Monthly Values for the Calendar Quarter in which Biogas was delivered to the Buyer (each such Month, a “Delivery Month”).

			

 

	 	
			(ii)

				
			The “LCFS Monthly Value” is calculated by multiplying the average LCFS Price for the Delivery Month by the LCFS Quantity for the Delivery Month.

			

 

	 	
			(iii)

				
			The “LCFS Price” for the applicable Month means (i) for Biogas delivered to California, the [********], and/or (ii) for Biogas delivered to Oregon, the [********] (if the [********] is not published, then the [********]).

			

 

	 	
			(iv)

				
			Seller Election to Generate and Retain LCFS Credits In-Kind.  In lieu of receiving the LCFS Value as a financial element in the Contract Price, Seller may elect by the Advanced Notice Deadline to retain one hundred percent (100%) of its LCFS Credits in-kind for each Biogas delivery Month. If Seller makes such election, then Seller must retain its entire share of LCFS Credits for Biogas allocated to Vehicle Fuel Producer(s) inside the state of California and shall establish and manage its LRT Account required for such LCFS Credits.  Seller shall not have the right to present any LCFS Credits that it retains in-kind to Buyer for monetization at will.  Any arrangement in which Buyer monetizes such LCFS Credits for Seller shall be a separate negotiated transaction that is not included under this Transaction Confirmation.

			

 

 

2

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

	 	
			2.

				
			Delivery Period:

			

 

	 	
			(a)

				
			Biogas Daily Delivery (the “Delivery Period”)

			

 

Begin Date:      Later of COD or January 1, 2022

 

End Date:         The last day of the 120th Month following Begin Date

 

	 	
			(b)

				
			RIN Monthly Delivery - One Month after the Biogas delivery Month

			

 

	 	
			(c)

				
			LCFS Quarterly Delivery - One Calendar Quarter after the Calendar Quarter in which Biogas was delivered.

			

 

	 	
			3.

				
			Contract Quantity and Performance Obligation:

			

 

	 	
			(a)

				
			Biogas Quantity

			

 

The “Biogas Quantity” means one hundred percent (100%) of the Biogas produced by Seller from the facility(s), (i) up to [********] MMBtu per Day from COD through April 30, 2024, and (ii) up to [********] MMBtu per Day from May 1, 2024 thru the end of the Delivery Period, as determined on a daily average basis (the “Maximum Daily Quantity”), and calculated monthly by Buyer in the Month following the Month in which such delivery occurs, from the Delivery Period Begin Date through the Delivery Period End Date.

 

Throughout the Delivery Period, Seller shall have a Firm obligation to sell and deliver the Biogas Quantity produced by Seller to Buyer at the Delivery Point(s), and Buyer shall have a Firm obligation to take delivery of such Biogas Quantity, subject to the following conditions:

 

	 	
			(i)

				
			 During the Delivery Period, Seller shall deliver the Biogas Quantity, subject to the Maximum Daily Quantity.

			

 

	 	
			(ii)

				
			 During the Delivery Period, Buyer shall accept delivery of the Biogas Quantity, up to the Maximum Daily Quantity, subject to Section 2.9 of the Biogas Addendum.

			

 

	 	
			(iii)

				
			In the event Seller produces (i) less than the [********] MMBtu on an average daily basis for three consecutive Months from COD through April 30, 2024, and (ii) less than [********] MMBtu on an average daily basis for three consecutive Months from May 1, 2024 thru the end of the Delivery Period, which reduced production is not excused by a Force Majeure event, then Buyer shall have the option, at Buyer’s sole discretion, to either: (1) reduce the Maximum Daily Quantity to a quantity that is equal to the average production during that three-Month period; or (2) renegotiate the Contract Price.

			

 

	 	
			(iv)

				
			In the event Seller produces more than the Maximum Daily Quantity, Buyer shall have the option to take delivery of such excess Biogas upon the same pricing and delivery terms applicable to the Biogas Quantity; provided, that if Buyer exercises its option to take delivery of such excess Biogas, Buyer’s obligation to take delivery shall be subject to Section 2.9 of the Biogas Addendum.  In the event Buyer does not take delivery of such excess Biogas, then Seller shall have the right to sell such excess Biogas to a third party.

			

 

	 	
			(b)

				
			RIN Quantity

			

 

The “RIN Quantity” shall be [********] of the RINs generated from the Biogas Quantity delivered to a VFP, provided that if a Downstream Distressed Event occurs, the RIN Quantity in respect of Biogas Quantities affected by such Downstream Distressed Event and sold pursuant to another Vehicle Fuel Producer Biogas Contract shall be [********] and, provided, further, (i) Buyer shall use commercially reasonable efforts to minimize the amount of such Biogas Quantities that are sold pursuant to another Vehicle Fuel Producer Biogas Contract and (ii) in no event shall the amount of such Biogas Quantities that are subject to the lower RIN Quantity of [********] exceed the proportion that (A) the total amount of Biogas Quantity sold to Buyer by Seller that is subject to such Downstream Distressed Event bears to (B) the total amount of Biogas purchased by Buyer from all suppliers (including Seller) during such Downstream Distressed Event. The conversion factor for determining the quantity of RINs generated for the quantity of Biogas delivered is [********] RINs for every 1 MMBtu of Biogas ([********] RINs/1MMBtu), or as otherwise specified by the EPA.

 

 

3

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

	 	
			(c)

				
			LCFS Quantity

			

 

The “LCFS Quantity” shall be [********] of the LCFS Credits generated from the Biogas Quantity delivered to a VFP in California or Oregon based on a weighted average Carbon Intensity of [********], provided that if a Downstream Distressed Event occurs, the LCFS Quantity in respect of Biogas Quantities affected by such Downstream Distressed Event and sold pursuant to another Vehicle Fuel Producer Biogas Contract shall be [********] and, provided, further, (i) Buyer shall use commercially reasonable efforts to minimize the amount of such Biogas Quantities that are sold pursuant to another Vehicle Fuel Producer Biogas Contract and (ii) in no event shall the amount of such Biogas Quantities that are subject to the lower LCFS Quantity of [********] exceed the proportion that (A) the total amount of Biogas Quantity sold to Buyer by Seller that is subject to such Downstream Distressed Event bears to (B) the total amount of Biogas purchased by Buyer from all suppliers (including Seller) during such Downstream Distressed Event. In the event the actual weighted average carbon intensity of the Biogas is not [********], the LCFS Quantity shall be adjusted by [********] for every carbon intensity increase or decrease of [********]. For example, if the actual carbon intensity is negative [********], then the LCFS Quantity shall be adjusted to [********]. If the actual carbon intensity is [********], then the LCFS Quantity shall be adjusted to [********].

 

	 	
			(d)

				
			Throughout the Delivery Period, Seller shall have an obligation to certify on a periodic schedule as required (i) by the EPA, that the Biogas quantities delivered to Buyer qualify for the creation of RINs under the EPA RFS when used as a Vehicle Fuel and (ii) by the LCFS, that the Biogas quantities delivered to Buyer qualify for the creation of LCFS Credits under the LCFS when used as a Vehicle Fuel.

			

 

	 	
			(e)

				
			Throughout the Delivery Period, Buyer shall have an obligation to sell and deliver Biogas purchased under this Transaction Confirmation to a VFP using an EPA-approved pathway that converts all of such Biogas to a Vehicle Fuel in the Biogas delivery Month, all in accordance with the EPA RFS and, if applicable, the LCFS, up to the Biogas Quantity. As needed, Buyer may update the list of VFP in Exhibit A by sending Seller a notification via email. In such event, Seller shall update the VFP registrations with the respective Green Attribute Regulator(s), and Buyer shall assist Seller with such registration.

			

 

	 	
			(f)

				
			For purposes of this Transaction Confirmation, a “Downstream Distressed Event” has occurred when (i) a Vehicle Fuel Producer is in default under a Vehicle Fuel Producer Biogas Contract due to the bankruptcy or other insolvency event of the Vehicle Fuel Producer and (A) such contract terminates based solely on such default and (B) Buyer has no other Vehicle Fuel Producer Biogas Contract pursuant to which it can deliver the affected Biogas and (ii) Buyer cannot enter into a replacement contract on similar or better terms than the terminated Vehicle Fuel Producer Biogas Contract.

			

 

 

 

	 	
			4.

				
			Delivery Point:

			

 

The Delivery Point shall be the inlet flange of [********].

 

II. Special Conditions

 

	 	
			1.

				
			Definitions.

			

 

“Biogas Price” has the meaning set forth in the Contract Price section above.

 

“Buyer’s Affiliate” means BP Products North America Inc.

 

“COD” or “Commercial Operation Date” shall mean the date that Seller confirms that the facility is completed such that it is capable of producing Biogas and injecting it into a Commercial Distribution System.

 

“LCFS Price” has the meaning set forth in in Section I.1.(d)(ii) above.

 

“Non-QAP Discount” has the meaning set forth in the Contract Price section above.

 

“Portfolio D3 RINs” means the D3 RINs in Buyer’s Affiliate’s trading portfolio, other than those excluded in accordance with the next sentence.  Buyer’s Affiliate may exclude D3 RINs where they may, in Buyer’s Affiliate’s good faith opinion, have unrepresentative prices, including: (i) D3 RINs where Buyer’s Affiliate acts as marketing agent for a seller who has the right to designate the purchasers; or (ii) RINs for which there are good faith invalidity concerns or other reasons to deem their prices unrepresentative.

 

 

4

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

“PTD” means a product transfer document, as set forth in the applicable Green Attribute Program.

 

“Q-RIN” means a RIN verified by a registered independent third-party auditor using a QAP that has been approved under 40 C.F.R. § 80.1469(c) following the audit process described in 40 C.F.R. § 80.1472.

 

“Quality Assurance Plan” or “QAP” means the list of elements that an independent third-party auditor will check to verify that the RINs generated by a renewable fuel producer or importer are valid pursuant to § 40 C.F.R. 80.1469.

 

“RIN Price” has the meaning set forth in Section I.1.(c)(ii) above.

 

“Validated” has the meaning set forth in Section I.1.(c)(ii)(3) above.

 

“Vehicle Fuel Producer” or “VFP” means a Vehicle Fuel Producer identified on Exhibit A.

 

	 	
			2.

				
			Representations by Both Parties.  Each of the parties to this Transaction Confirmation represents and warrants that, as of the date of this Transaction Confirmation specified above:

			

 

	 	
			(a)

				
			It has full and complete authority to enter into and perform this Transaction Confirmation;

			

 

	 	
			(b)

				
			The person who executes this Transaction Confirmation on its behalf has full and complete authority to do so and is empowered to bind it thereby; and

			

 

	 	
			(c)

				
			It is not insolvent and has not sought protection from its creditors under the United States Bankruptcy Code, or under any similar laws.

			

 

	 	
			3.

				
			Buyer Representations.  Buyer and Buyer’s Affiliate represent and warrant to Seller as of the execution date of this Transaction Confirmation that:

			

 

	 	
			(a)

				
			The VFPs have entered into Biogas Contracts with Buyer;

			

 

	 	
			(b)

				
			Neither Buyer nor Buyer’s Affiliate has taken any action that would invalidate Green Attributes that would otherwise be valid and in material compliance with all applicable laws and regulations;

			

 

	 	
			(c)

				
			The Biogas delivered to Buyer will be used as Vehicle Fuel to the extent possible;

			

 

	 	
			(d)

				
			The Biogas delivered to Buyer will be delivered to a Vehicle Fuel Producer in California for the subsequent generation of RINs and LCFS Credits throughout the Delivery Period as long as such programs exist, subject to the provisions of the Base Contract, Biogas Addendum, and this Transaction Confirmation that excuse Buyer’s performance hereunder (including, for the avoidance of doubt, Force Majeure events, Regulatory Cessation, Regulatory Events, or an Illegality). Any failure by Buyer to satisfy the above warranty shall not be an Event of Default hereunder and the sole and exclusive remedy available to Seller in the event of such failure is the payment by Buyer of the RIN Value or LCFS Value, as applicable, that would have otherwise been generated had Buyer satisfied the warranty stated in this Section II.3(c); and

			

 

	 	
			(e)

				
			As of the execution date hereof, Buyer’s VFPs meet the eligibility standards for registration under the applicable Green Attribute Program, including the EPA RFS, and, in the case of VFPs in California, under LCFS.

			

 

	 	
			4.

				
			Seller Representations.  Seller represents and warrants to Buyer and Buyer’s Affiliate as of the execution date of the Transaction Confirmation and on each Day during the Delivery Period that:

			

 

	 	
			(a)

				
			The Biogas Supply Source meets the eligibility standards for Registration of the Green Attributes Program, including under the EPA RFS;

			

 

	 	
			(b)

				
			Seller shall not sell, trade, remarket, give away, claim, or otherwise sell separately the Green Attributes from the Biogas supply source; and

			

 

 

5

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

	 	
			(c)

				
			the Biogas delivered to Buyer shall have been processed to meet applicable pipeline quality specifications and injected into a Commercial Distribution System connected to the Delivery Points in accordance with the requirements of the applicable Green Attribute Program, including EPA RFS or LCFS.

			

 

	 	
			5.

				
			Vehicle Fuel Producers.  VFPs are those listed on Exhibit A. In the event that Buyer needs to sell Biogas purchased under this Transaction Confirmation to other VFPs not cited in Exhibit A in order to meet its purchase obligations under this Transaction Confirmation, Buyer shall send an updated Exhibit A to Seller listing the additional VFPs, which may be sent by email. Within seven (7) Business Days of acceptance, Seller shall update the VFP registrations with the respective Green Attribute Regulator(s).

			

 

	 	
			6.

				
			Seller Credit Support. For purposes of this Transaction Confirmation, Seller shall have no obligation to provide credit support or security in support of its obligations hereunder.

			

 

	 	
			7.

				
			Third Party Verification Support Requirement.  Buyer may terminate this Transaction Confirmation if Seller, not later than thirty (30) Days following the date of this Transaction Confirmation specified above, does not execute a contract to work with Weaver or EcoEngineers to provide all necessary information required for registration with the EPA under the EPA RFS with regard to Q-RINs for RIN generation and allocation or if Seller terminates such contract with Weaver or EcoEngineers during the Delivery Period. If the Seller opts to generate RINs before receiving Q-RIN status, or if Seller failed to receive Q-RIN status or terminates the contract with Weaver or EcoEngineers (or some other service provider acceptable to Buyer in its sole discretion), then the Non-QAP Discount shall be applied to the RIN Price until such time as the Seller receives Q-RIN status.

			

 

	 	
			8.

				
			EPA and CARB Registration Cost.

			

 

	 	
			(a)

				
			Renewable Fuel Standard Registration Cost. Seller and Buyer’s Affiliate will share equally all initial costs associated with Registration of the production facilities and fuel pathways in line with EPA requirements to provide RINs and for registration under the QAP. Seller will cooperate with Buyer’s Affiliate and provide all necessary information required to complete registration. Seller shall be responsible for any ongoing reporting and costs associated with integrity and compliance of the pathway, including QAP costs in Special Condition 7 above (Third Party Verification Support Requirement).

			

 

	 	
			(b)

				
			Low Carbon Fuel Standard Registration Cost.  Buyer’s Affiliate will pay all initial costs associated with registration of the production facilities and fuel pathways in line with CARB requirements to generate LCFS Credits. Seller will cooperate with Buyer’s Affiliate and provide all necessary information required to complete registration. Seller shall be responsible for any ongoing reporting and costs associated with integrity and compliance of the pathway.

			

 

	 	
			9.

				
			Alternate Green Attribute Programs. Notwithstanding Section 3.6 of the Base Contract, if the Biogas, Green Attributes, RINs or LCFS Credits become eligible under another Green Attribute Program, Buyer shall have the option, exercisable at its sole discretion, to redirect the Biogas, Green Attributes, RINs or LCFS Credits to such program for the remainder of the Delivery Period.

			

 

If such option is exercised by Buyer, then:

 

	 	
			(a)

				
			Any additional value (net of costs incurred as a result of redirection, including costs associated with Sections 9(b) and (c) below) achieved over the Contract Price as a result of the redirection to an alternative Green Attribute Program shall be shared equally between Buyer and Seller.

			

 

	 	
			(b)

				
			Seller shall comply with all reasonable requests from Buyer or Buyer’s Affiliate to complete regulatory documentation necessary for such redirection, which includes, but is not limited to, any affidavits, reporting or attestations, and any other documentation required to certify that production and the transportation of the Biogas from its point of production to the Delivery Point is compliant with the transportation routing or pathing requirements of the Green Attribute Program; and

			

 

	 	
			(c)

				
			Seller shall comply on an ongoing basis with all requirements of such Green Attribute Program, including completion of any regulatory documentation, which includes, but is not limited to, any affidavits, reporting or attestations, and any other documentation required to certify that production and the transportation of the Biogas from its point of production to the Delivery Point is compliant with the transportation routing or pathing requirements of the Green Attribute Program, provided that the foregoing shall not require Seller to incur any capital expenditures.

			

 

 

6

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

	 	
			10.

				
			CARB LCFS Regulated Entity Status. Pursuant to Section 95483 of the California LCFS, Seller hereby transfers to Buyer, and Buyer hereby accepts from Seller, the LCFS compliance obligation as the regulated entity with respect to all Biogas sold by Seller to Buyer; provided that, in the event the Biogas sold and delivered to Buyer is not in compliance with all pathway requirements of the California LCFS, including the certified CI, as it relates to the Biogas production process, Seller shall remain the regulated entity with respect to such Biogas and indemnify Buyer for any and all claims, fines or penalties that Buyer may incur as a result of such Biogas being non-compliant. In addition, in order to make such transfer effective as required under Section 95483 of the California LCFS, Seller shall provide Buyer with a PTD which shall prominently states: (i) the volume and average CI of the transferred fuel; and (ii) that Buyer is the regulated entity for the acquired fuel and, accordingly, is responsible for meeting the requirements of the California LCFS with respect to the fuel.

			

 

	 	
			11.

				
			Storage Cost. Buyer and Seller shall share equally any and all storage costs incurred by either Party during: (i) the period beginning on the date that the facility achieves COD and the date that the EPA approves the applicable RFS pathway and (ii) the period of time during any Downstream Distressed Event, it being understood and agreed that the purpose of such storage is to preserve any Green Attributes during such period.

			

 

	 	
			12.

				
			Regulatory Cessation. Upon the occurrence of a Regulatory Cessation, then Buyer and Seller shall work together in good faith to deliver the Biogas and Green Attributes into another market with the goal that it will be delivered into the highest value market that is commercially practicable. For the purposes of this Transaction Confirmation, the term “Regulatory Cessation” shall mean any of the following: [********]. If Buyer and Seller are unable to agree on the renegotiated Delivery Period or Contract Price within sixty (60) days from the date that a Party initiated such renegotiation, then either Party shall have the right to terminate this Transaction Confirmation and no Party shall have any further right or obligation hereunder (except for such rights or obligations that arose prior to the date of such Regulatory Cessation). For the avoidance of doubt, [********]. Any termination under this Section 12 shall be conducted as though the Parties had selected “Early Termination Damages Do Not Apply” under Section 10.3 of the Base Contract.

			

 

	 	
			13.

				
			Termination Rights.

			

 

	 	
			(a)

				
			In the event that Seller does not produce and deliver Biogas to Buyer from facility by December 31, 2022, either party shall have the right to terminate this Transaction Confirmation upon at least thirty (30) days’ prior written notice to the other party.

			

 

	 	
			(b)

				
			If within thirty-six (36) Months of the date hereof Seller elects to refinance those certain Solid Waste Facility Revenue Bonds (Gevo NW Iowa RNG, LLC Renewable Natural Gas Project), Series 2021 (Green Bonds), issued by the Iowa Finance Authority on April 15, 2021 and the inclusion of Section 3.5 (Regulatory Event) of the Special Provisions to the Contract prevents Seller from obtaining such refinancing, then Seller will notify Buyer. If after thirty (30) Days from receipt of such notice Buyer, Buyer’s Affiliate and Seller are not able to reform Section 3.5 of the Special Provisions in such a way as to allow Seller to obtain its refinancing, Seller may terminate this Transaction Confirmation on written notice to Buyer.

			

 

Any such termination under this Section 13 shall be conducted as though the parties had selected “Early Termination Damages Do Not Apply” under Section 10.3 of the Base Contract.

 

 

[Signature Page Follows]

 

 

7

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Please confirm the foregoing correctly sets forth the terms of our agreement with respect to this transaction by signing in the space provided below and returning a copy of the executed Transaction Confirmation by faxing it to (281) 227-8470.

 

 

	
			BP Canada Energy Marketing Corp. 

			 

			By: /s/ John Armstrong                                                                 

			Name: John Armstrong

			Title: Attorney-in-Fact

			Date: August 5, 2021

			 

			BP Products North America Inc.

			 

			By: /s/ Sean M. Reavis                                                                 

			Name: Sean M Reavis         

			Title: Attorney-in-Fact                  

			Date: August 5, 2021

				
			Gevo NW Iowa RNG, LLC 

			 

			By: /s/ Lynn Smull                                                                               

			Name: Lynn Smull

			Title: CFO

			Date: 08/05/2021

			

 

 

 

 

[Biogas Transaction Confirmation]

 

 

8

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Exhibit A

Vehicle Fuel Producers

 

	
			 Vehicle Fuel Producers:

				
			Location:

			
	
			[*****]

				
			[*****]

			
	 	 
	 	 
	 	 
	 	 
	 	 

 

 

9

Confidential

 

 

 

CERTAIN CONFIDENTIAL INFORMATION, IDENTIFIED BY BRACKETED ASTERISKS “[*****]”, HAS BEEN OMITTED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.

 

Exhibit B

Validation Example 

 

The following example is intended to explain how the RIN Price is Validated, as described in Section 1.(c)(ii)(3) of the Contract Price section.

 

	
			Biogas Delivery 

			Month

				
			Vintage 2016 D3 RINs

			# of Trades

				
			Vintage 2017 D3 RINs

			# of Trades

				
			[********] Price

			for Vintage 2016 

				
			[********] Price

			for Vintage 2017

				
			Vintage 2016

			D3 RIN

			BP Sale Volume/Price

				
			Vintage 2017

			D3 RIN

			BP Sale Vol/Price

			
	
			June 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			July 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			August 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			September 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			October 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			November 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			December 2016

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			January 2017

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			February 2017

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			March 2017

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

				
			[********]

			
	
			April 2017

				 	
			[********]

				 	
			[********]

				 	 
	
			May 2017

				 	
			[********]

				 	
			[********]

				 	 

 

	
			1)

				
			For the September 2016 Biogas delivery Month, [********] were generated.

			

 

	 	
			a)

				
			Validation was not achieved in any of the three Months prior because there were only 8 days of trading as opposed to the required 10 Days. Therefore, to price the September 2016 RINs, you must follow Section 1(c)(ii)(2) of the Contract Price section.

			

 

	 	
			b)

				
			The 2nd price tier would value [********] at the actual sold price of [********] per RIN.

			

 

	 	
			c)

				
			The remaining [********] D3 RINs would be priced at the greater of [********] of the [********] ([********] x [********] = [********] per RIN) and the [********] (which for the sake of this example will be [********]/RIN). So, the [********] D3 RINs are priced at [********].

			

 

	 	
			d)

				
			Thus, on a weighted-average basis, the RIN Price for September 2016 is [********] per RIN.

			

 

	
			2)

				
			For the Months of October 2016, November 2016, and December 2016, the [********] has been Validated based on the fact that there were 12 trades during the 20 Business Days prior to the Advance Notice Deadline. Therefore, the price of 2016 D3 RINs for October, would be [********], for November would be [********] and for December would be [********].

			

 

	
			3)

				
			For January 2017 Biogas delivery Month, [********] D3 RINS were generated.

			

 

	 	
			a)

				
			The price needs to be Validated for 2017 RINs. Validation was not achieved in any of the three Months prior to January because there were only 5 days of trading as opposed to the required 10 Days. The 10 trading days for vintage 2016 do not validate a vintage 2017 [********]. Therefore, to price the January 2017 RINs, you must follow Section 1(c)(ii) of the Contract Price section.

			

 

	 	
			b)

				
			The RIN price would be [********] based on BP’s actual sales of vintage 2017 RINs during the Month of January 2017.

			

 

	
			4)

				
			For February 2017 Biogas delivery Month, [********] D3 RINs were generated.

			

 

	 	
			a)

				
			Validation was not achieved in any of the three Months prior to February because the month with the most trades was still below the required 10 Days. Therefore, to price the February 2017 RINs, you must follow Section 1(c)(ii) of the Contract Price section.

			

 

	 	
			b)

				
			The RIN price would be [********] based on BP’s actual sales of vintage 2017 RINs during the Month of February 2017.

			

 

	
			5)

				
			For the months of March 2017, April, 2017 and May 2017, the [********] has been Validated based on the fact that there were 10 trades during the 20 Business Days prior to the Advance Notice Deadline. Therefore, the price of 2017 D3 RINs for March, would be [********], for April would be [********], and for May would be [********].

			

 

10

Confidential

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