New Cellulosic Ethanol Demo Plant

MONTANA, Aug 18 2008 (Neo Natura) - Last year AE Biofuels Inc. acquired enzyme technology from Renewable Technology Corporation and formed its ethanol technology subsidiary, Energy Enzymes. The company's enzyme technology is designed to reduce operating and capital costs for both cellulosic ethanol and starch ethanol plants and provides a platform to integrate the two processes. AE Biofuels utilizes patent-pending ambient temperature enzymes to eliminate the up-front "cooking" process that occurs in traditional starch ethanol production. Eliminating the initial cooking and cooling process significantly reduces energy and water consumption.

In addition, the cellulose enzyme technology has proven successful in converting multiple lignocellulosic feedstocks, such as switch grass, wheat grass, corn, and corn stover, the remaining corn "stalks" that are not currently being utilized as biomass, to ethanol. These low-cost, multi-activity enzymes are expected to reduce capital and operating expenditures for cellulose ethanol production. The company has three patents pending covering the enzymes and process for integrating cellulose and starch.

The company celebrated the grand opening of its integrated cellulosic ethanol commercial demonstration facility in Butte, Montana on August 11th. One of the first such cellulosic demonstration plants in the United States, and the first to integrate the use of both cellulose and starch based feedstocks, the 9,000 square foot demonstration facility is now operational. The $1.5 million facility is capable of producing 150,000 gallons of ethanol per year and will be used to perfect the company’s integrated cellulosic ethanol production process.

The plant uses proven, patent-pending Ambient Temperature Enzymes for converting cellulose and starch to fermentable sugars to optimize process conditions for multiple feedstocks. Non-food ethanol feedstocks used at the facility include switch grass, grass seed straw, small grain straw, sugarcane bagasse, and corn stalks either alone or in combination with a variety of traditional starch and sugar sources such as corn, wheat, barley, and sugarcane. By utilizing multiple feedstocks, AE Biofuels can produce ethanol through a cellulose only or cellulose / starch combination, thus reducing the risk of commodity availability and pricing uncertainty.

U.S. Senator Max Baucus of Montana attended the opening ceremony and noted, "One of my top priorities is to help boost domestic energy production here in Montana so we can lessen our dependence on foreign oil and energy sources. This cellulosic biofuels plant is a step in the right direction toward energy independence and will also help create good-paying jobs. I'm especially proud that Montana can help pave the way and be a leader in boosting domestic energy production."

Montana Governor Brian Schweitzer, who also attended the opening ceremony said, "Montana is a true leader for new energy solutions. We're proud that AE Biofuels' groundbreaking technology was developed here in Montana. It is exciting to see this company working on a way to reduce our dependence on foreign energy supplies - American energy produced by Montana workers."

"The Department of Energy is committed to developing clean, renewable, and sustainable biofuels that reduce greenhouse gas emissions and increase America's energy security. We must have a broad range of technologies, including cellulosic biofuels that use non-food based feedstocks, to address our energy challenges," said Paul Dickerson, Chief Operating Officer of the U.S. Department of Energy's Office of Energy Efficiency and Renewable Energy who attended the opening.

"If the agricultural community can sell their stock, corn stalk and other cellulose fiber materials and get some money that's an additional cash flow onto them," said Jim Smitham, Butte Local Development Corporation Executive.

The company said the technology was invented in Montana and Smitham adds the new plant is an example of the cutting-edge research that is being done in the Mining City.

"It brings new recognition of the types of technology that Butte's involved with. It puts us on the map in a whole different industry sector, a whole different area as far as research and development in agricultural areas and energy areas," Smitham said.