ZeaChem Signs Contract to Develop "Drop-In" Advanced Biofuels

February 23, 2012

ZeaChem Commences USDA-Funded Initiative to Build a Bioenergy Industry in the Pacific Northwest

LAKEWOOD, Colo., Feb 23, 2012 -- ZeaChem Inc., a developer of biorefineries for the conversion of renewable biomass into sustainable fuels and chemicals, today announced that it has successfully completed contract negotiations to receive its portion of a $40 million grant from USDA's National Institute of Food and Agriculture (NIFA) through the Agriculture and Food Research Initiative (AFRI) Regional Coordinated Agricultural Project (CAP). The USDA project will establish regional systems for the sustainable production of bioenergy and bio-based products.

ZeaChem is creating the industry's first truly integrated cellulosic biorefineries, capable of producing a broad portfolio of fuel and chemical products from renewable biomass. ZeaChem's role in the USDA project is the logical progression of the company's phased development strategy, in which it researches and develops saleable products at each step toward commercialization. The company will receive $12 million of the total $40 million grant, and will implement the AFRI project at its existing 250,000 gallon-per-year (GPY) integrated demonstration biorefinery, located at the Port of Morrow, near Boardman, Ore.

"ZeaChem is pleased with the USDA's support to establish a bioenergy economy in the Pacific Northwest," said Jim Imbler, president and chief executive officer of ZeaChem. "The grant allows ZeaChem to use our existing integrated demonstration facility to develop advanced biofuels beyond cellulosic ethanol, including bio-based jet, diesel and gasoline. The project highlights one of our unique strengths, which is that we can utilize a variety of biomass feedstocks and proven processes to develop a wide range of economical and sustainable fuel and chemical products."

Bio-based jet and diesel are an extension of the company's C2 product platform, which is currently being deployed at the integrated demonstration biorefinery and already includes intermediate chemicals acetic acid and ethyl acetate, and cellulosic ethanol. The integrated demonstration biorefinery is an ideal proving ground with adequate capacity to provide test quantities of drop-in fuels for commercial and military applications. Design of the AFRI project is underway and the equipment modules are expected to be installed in 2013. Production of bio-based jet and diesel is expected to begin in 2013 and production of bio-based gasoline, part of the C3 product platform, will follow in 2015.

The USDA AFRI Regional CAP is led by the University of Washington and includes GreenWood Resources, Oregon State University, Washington State University, the University of California, Davis, University of Idaho, and the Agricultural Center for Excellence. ZeaChem's role is to lead R&D and demonstration trials for production of "drop-in" transportation fuels, including bio-based jet and diesel fuels and bio-based gasoline.

ZeaChem has begun core facility operations at its 250,000 GPY integrated demonstration biorefinery in Boardman, Ore. The "bookends" project enabling the production of cellulosic ethanol will be complete in 2012. The company is now actively developing commercial-scale biorefineries for the production of advanced biofuels and bio-based chemicals.

About ZeaChem Inc.

ZeaChem Inc. has developed a cellulose-based biorefinery platform capable of producing advanced fuels and intermediate chemicals. ZeaChem's indirect approach leapfrogs the yield and carbon dioxide (CO2) problems associated with traditional and cellulosic based biorefinery processes. In addition, ZeaChem has a significant capital cost advantage compared to other cellulosic technologies. By efficiently extracting the most energy possible from biomass feedstocks, ZeaChem significantly increases output while reducing both production costs and environmental impacts. Incorporated in 2002, ZeaChem is headquartered in Lakewood, Colo., operates a research and development laboratory facility in Menlo Park, Calif., and a demonstration biorefinery in Boardman, Ore.

Please visit www.zeachem.com for more information.