Developing a solid biodiesel request for proposal
At the 2014 National Biodiesel Conference in San Diego, Dolores Santos with OPIS spoke about how to develop a solid request for proposal (RFP). Santos says to specifically define the biodiesel type (e.g., corn oil-based biodiesel) to be bought or sold, define the city or market and price benchmark index that will be used to price the fuel, and have a backup city or alternative price formula written into the contract. Clearly define the product specifications, she says, and specify whether BQ-9000 is a requirement, and if routine testing will be conducted.
Determine whether the RINs associated with the fuel will be transferred to the buyer, or if the value of the RINs is included in the price. If the California market is at play, there needs to be an understanding whether the low carbon fuel standard carbon intensity value is included in fuel, or if the supplier is selling nonobligated product, she says.
Regarding benchmarking, do research, Santos says. Find out what cities will be used, and if there is more than one supplier in the identified location. “Most only have one or two suppliers,” she says. “Know who your supplier is.” Santos also suggests using a combination of rack posting and swap prices to develop a sound RFP.