BC International Corporation Announces New $2.8 Million Contract With Department of Energy For Biomass Ethanol Project.

Business/Technology Editors

DEDHAM, Mass.--(BUSINESS WIRE)--April 13, 2000

BC International Corporation today announced the signing of a $2.8 million cost share contract with the U.S. Department of Energy's National Renewable Energy Laboratory (NREL), located in Golden, Colorado. The funding will support development of the "Gridley Ethanol Project," an ethanol manufacturing facility that will produce 23 million gallons of ethanol annually from the region's rice straw waste.

The Gridley ethanol plant will provide a significant help to the region's rice growing industry. Each year, over 500,000 acres of rice are grown in the California's Sacramento Valley, creating almost 1.5 million tons of rice straw waste. Historically, rice straw waste has been burned in the fields, creating a significant local air pollution problem. To reduce the effects of local air pollution from rice straw burning, the California State Legislature recently passed a law to phase-out most rice straw burning by 2001.

"The ethanol facility in Gridley provides much needed relief from the region's rice straw disposal problem," noted Stephen Gatto, President of BC International Corporation.

The Gridley Project will nominally produce 23 million gallons of ethanol per year and will utilize 300,000 bone dry tons of biomass feedstock, primarily rice straw. Once operational, the plant will employ about 65 people and will generate over 100 additional jobs involved in feedstock handling and transport. The City of Gridley and the surrounding area will realize significant economic benefits as a result of this development.

"We are very excited about the ethanol plant," said Ken Collins, President of the Gridley Rice Straw Cooperative. "Without a viable alternative to dispose of the rice straw, thousands of dollars will be spent incorporating straw back into the soil, making profitable rice production a real question." No other crops have been successfully cultivated in the region's hard claypan soils.

Gridley produced ethanol could also help serve as a suitable replacement for MTBE, the now infamous gasoline additive that has caused widespread contamination of some of the nation's underground water supplies. Like MTBE, ethanol's use as a gasoline additive can achieve important air quality benefits. But, unlike MTBE, ethanol is produced from renewable resources and poses no direct threat to water supplies. Governor Gray Davis has announced that California would phase out the use of MTBE in California by 2003.

"Ethanol is being supported by California State agencies as a viable replacement for MTBE," Gatto said. "In-state production of ethanol from biomass will also provide California with greater energy security and fuel diversification. Furthermore, ethanol use significantly reduces CO2 emissions compared to gasoline and other reformulated gasoline blends."

"This contract is a meaningful part of the efforts being taken by the Department of Energy to triple the use of renewables in the production and transportation sectors of our economy," said Robert Wooley, Technology Manager for NREL. "Achieving this goal will help rural economies across our nation, improve our trade balance, and improve our environment."

Last month, BC International announced the startup of its New Product and Process Development Laboratory at the University of Florida's Sid Martin - Biotechnology Lab located in Alachua, Florida, and the appointment of Dr. Gregory W. Luli as Laboratory Director and Principal Investigator. BCI stated that their two primary missions for opening this facility were: (1) sustaining and improving the Company's current cost advantage in the production of ethanol from agricultural and forest product wastes and (2) development of fermentation processes for high value chemicals and intermediates, taking advantage of low cost sugars generated in its proprietary processes.

BC International Corporation, recently received approval for over $100 million in bonds to construct the world's first commercial bioethanol manufacturing facility, a 20 million-plus gallon plant in Jennings, Louisiana that will use sugar cane residue as a feedstock. In addition to the Gridley facility, BC International has also announced plans for a project in Chester, California that will utilize wood waste to produce ethanol. Additional information on BC International Corporation can be found at www.bcintlcorp.com