Relating to mass balance attribution of renewable biomass feedstocks used to produce renewable chemicals.

Contracts

• Upstream (Feedstock Suppliers): Amend Master Supply Agreements (MSAs) to require warranties that biomass meets the specific definitions in Sec. 361.421(8-a). Specifically, timber sourced from federal land must carry warranties of compliance with the Healthy Forests Restoration Act of 2003.
• Downstream (Sales): Update sales contracts to stipulate that "renewable" content is determined via mass balance attribution, not physical segregation. Include clauses disclaiming liability if physical testing (C14 analysis) does not match the attributed renewable content.

Hiring/Training

• Audit Engagement: If not already certified, initiate vendor selection for third-party auditors (e.g., SCS Global, Control Union) anticipating TCEQ will adopt major standards like ISCC.
• Internal Accounting: Operations teams must be trained on "credit banking" and conversion factor logic. Inventory managers must separate "physical" tracking from "sustainability credit" tracking in ERP systems.

Reporting & Record-Keeping

• Chain of Custody (CoC): You must maintain unbroken CoC records from the point of feedstock generation (e.g., the farm or waste facility) to the reactor.
• Mass Balance Ledgers: Establish a ledger system that balances renewable inputs against renewable outputs, accounting for conversion losses. These records will be the primary subject of TCEQ verification.

Fees & Costs

• Certification Costs: While the state imposes no new significant fees, businesses must budget for annual third-party audit fees (estimated $10k–$50k depending on facility complexity).
• Administrative Overhead: Expect increased administrative hours for maintaining the credit ledger and verifying supplier certificates.