Transaction Confirmation relating to the Base Contract, by and between Gevo NW Iowa RNG, LLC and BP Canada Energy Marketing Corp

Date: August 2, 2021

Contract: 27853

Confirmation Number: 16471870

BUYER:

BP Canada Energy Marketing Corp.

30 S Wacker

Chicago, IL 60606

Attn: John Armstrong

Phone: 801 ###-###-####

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: ***@***

SELLER:

Gevo NW Iowa RNG, LLC

345 Inverness Drive South, Building C

Suite 310

Englewood, CO 80112

Attn: Tim Cesarek

Phone: 832 ###-###-####

Base Contract No.

Transporter: _____________________________________

Transporter Contract Number: _______________________

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.

(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 [********].

(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.

Delivery Period:

(a)

Biogas Daily Delivery (the “Delivery Period”)

(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

(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

(c)

LCFS Quantity

(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:

1.

Definitions.

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

(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.

(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.

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.

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

 Vehicle Fuel Producers:

Location:

[*****]

[*****]

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 2^nd 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 [********].