Virent and HCL CleanTech Receive Grant to Demonstrate Cellulosic Sugars as Feedstocks for `Drop-In´ Biofuels and Bioproducts

Madison / Herzelia - Virent Energy Systems Inc. and HCL CleanTech announced today that they have been awarded a $900,000 grant from BIRD Energy, a program for U.S. - Israel joint renewable energy development funded by the U.S. Department of Energy, the Israeli Ministry of National Infrastructures, and the BIRD Foundation. The grant supports almost half of the $2.1 million total project cost.

The project's objective is to address the key hurdles limiting the market acceptance of biofuels and bioproducts made from cellulosic feedstocks: price, performance, and infrastructure compatibility.

The project combines HCL CleanTech's proprietary lignocellulosic conversion technologies that produce cost-effective non-food sugars with Virent's innovative BioForming(R) technology that converts plant sugars into hydrocarbon molecules like those now refined from petroleum. HCL CleanTech's pioneering technology builds on a proven industrial process, significantly improving the economics of converting lignocellulosic biomass into refined sugars, de-acidified lignin and tall oils. The process chemistry works at low temperature and atmospheric pressure, resulting in very few degradation products and significantly lower energy and water consumption. These sugars can be utilized by Virent's process to make fungible hydrocarbons that can be used as chemicals or seamlessly blended to make premium 'drop in' fuels for car, truck, train, and air transportation. Virent's fuel products can readily enter the market using existing pipelines to power today's vehicles at high blend rates.

"Economically converting plentiful cellulosic biomass into renewable, fungible hydrocarbon fuels and products will enable broad market acceptance and is the most realistic alternative to displace petroleum and create a clean energy transportation sector in the coming years," said Lee Edwards, Virent CEO. "Virent has proven it can transform cellulosic, non-food sugars into environmentally superior hydrocarbon fuels with the same energy content and performance as petroleum fuels. Utilizing HCL CleanTech's cost-effective biomass hydrolysis technology to provide inexpensive cellulosic sugar feedstocks may be a key component of a complete and sustainable biofuels solution."

Sugars processed at HCL CleanTech's demonstration plant operating at Southern Research Institute in Durham, North Carolina will be sent to Virent's facility in Madison, Wisconsin for conversion into biofuels and biochemicals. As part of the BIRD project, HCL CleanTech will also provide pine sugars to a leading biopolymer producer for evaluating fermentation into hydrocolloids that historically are produced from cane or corn sugars for use in a broad range of personal care, food and beverage applications.

"We expect to have the sugars ready for Virent before the New Year and are confident the integration with Virent and the leading biopolymer producer will create new opportunities in the bio-fuels and bio-products space" said Eran Baniel CEO of HCL CleanTech. Bob Jansen, Head of HCL CleanTech Engineering added: "we built the demo unit operations at a size that will allow us to scale up directly to a small commercial facility, which we plan to integrate into a paper mill by the end of 2012".

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