Essential Elements of Feedstock Supply Agreements for RNG Projects
Feedstock supply agreements are crucial for the successful operation of digesters converting organic feedstock into renewable natural gas (RNG). These contracts define the relationship between feedstock suppliers and project operators, ensuring quality, quantity, and compliance with performance guarantees. They address storage, transportation, compensation structures, and specific requirements related to various feedstock types. Effective agreements mitigate risks, enhance operational efficiency, and support the financial viability of RNG projects.
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Feedstock supply agreements are vital for RNG projects, governing the relationship between feedstock suppliers and project operators. They ensure the quality and quantity of feedstock, essential for achieving performance guarantees necessary for financing and operational success.
Key provisions include defining acceptable feedstock types, storage requirements, transportation responsibilities, and compensation structures based on feedstock value. Agreements should also accommodate potential pre-treatment needs and establish flexible delivery schedules to account for variability in supply. Well-structured agreements mitigate risks and promote efficient operation, supporting the growth of the biogas and RNG sector.
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