Bakersfield Biodiesel Plant Completes First Week of Production Testing While Congress Debates Final Energy Bill.

Business Editors

BAKERSFIELD, Calif.--(BUSINESS WIRE)--Nov. 6, 2003

European Union (E.U.) Adopts New Rules for De-Taxation

of Biodiesel That Is Major Point of Debate in U.S. Energy Bill

Green Star Products, Inc. (OTC: GSPI) announced today that American Biofuels, LLC, which is 35% owned by GSPI (see press release dated July 23, 2002), has completed its first week of production test runs at its new Bakersfield Biodiesel Plant.

The production capacity of the Bakersfield Biodiesel Plant is expected to reach 35 million gallons per year at full production with existing infrastructure in place. The proprietary reactor/separator modules, with the first module now on-line, are designed to produce 2.5 million gallons per year per module and can quickly be added to increase plant production capacity as biodiesel markets expand. The Bakersfield Plant capacity is significant when considering that the entire U.S. production of Biodiesel for 2002 was only 15 million gallons.

During the first week of start-up runs the plant was tested with different percentages of recycled and virgin vegetable oil. Recycled vegetable oil was gathered from local restaurants and food processors eagerly wanting to participate in cleaning up the environment. Virgin vegetable oil consisted of soybean oil obtained from U.S. farmers.

Initial production test runs are required by all commercial and industrial plants to set relays, circuits, alarms, samples of intermediate production steps and set many other parameters. This start-up process is particularly intense in a continuous flow process like the one installed in the Bakersfield Plant, which is the only continuous-flow biodiesel production facility in the U.S.

The first biodiesel fuel produced by the Bakersfield Plant has been delivered to Hondo Chemical (see press release dated Nov. 19, 2002), who previously announced that they will be the first industrial facility in Bakersfield to use biodiesel in its off-road equipment to help clean Bakersfield's air, which is the third most polluted in the U.S. Hondo Chemical wants to set an example for others to follow in Bakersfield and other parts of California and the U.S.A.

Recently, the California Air Resources Board (CARB) indicated that 66% of diesel emissions in California come from off-road diesel equipment and machinery, and they have now initiated a regulatory process to address this problem.

The start-up of the Bakersfield Biodiesel Plant comes in the middle of a heated political battle in the U.S. Congress concerning the Energy Bill, which is now in a Conference Committee, where differences between House and Senate versions are being worked out. On July 30, 2003, the U.S. Senate passed the Energy Bill by a non-partisan vote of 84-12. The Senate bill contained key tax provisions for biodiesel, including an excise tax credit for biodiesel made from both virgin and recycled vegetable oil. These tax incentives are essential to the biodiesel industry to compete with petroleum, which already receives numerous tax incentives and tax deductions. The U.S. Senate, led by Senator Grassley (R-IA), worked long and hard with the biodiesel industry, the American soybean farmers and the National Biodiesel Board (www.biodiesel.org) to draft the biofuel tax provisions.

It is interesting to note that the main opposition to the biodiesel tax provisions (HR 3119) comes from a Congressman in California near the plant. Meanwhile, the European Union (E.U.) has taken significant measures to promote renewable fuels and energy independence in Europe. They have directed their Member States to pass almost identical tax incentives to those passed by the Senate. The E.U. has the same energy problem the U.S. has and imports approximately 8,000,000 barrels of oil per day from an oil industry that is increasingly becoming dependent on Middle East reserves for the majority of their oil as the political situation becomes increasingly unstable. The E.U. already produces almost 20 times more biodiesel than the U.S., with production expected to be above 1.3 million tons (350 million gallons) in 2003.

The E.U. has passed a Directive that will ensure that an even greater percentage of liquid fuels come from biofuels (ethanol or biodiesel) which will require that 2% of petroleum contain biofuels in 2005, rising by 3/4% per year to 20% by 2020. This is projected to increase demand to 5 million metric tons by 2006 and 15 million metric tons by 2010 (about 4 billion gallons). This Directive is a key part of the E.U. strategy to achieve energy independence, reduced dependence on imported oil, reduce air pollution and reduce greenhouse gas emissions. A key part of that strategy involves different tax treatment for biofuels.

In response to the E.U. Tax Directives, the European Biodiesel Board (www.ebb-eu.org) announced on Oct. 29, 2003, "EBB welcomes unanimous adoption of new EU rules for biodiesel and biofuels detaxation." The EBB press release further states, "Detaxation represents a crucial new opportunity that EU institutions have provided Member States for boosting the development of biofuels ... In conclusion, the European Biodiesel Board expresses its complete satisfaction with the approval of these new important EU rules. They definitively prove that the EU has acknowledged the significant environmental benefits of biofuels in terms of lesser green house gas emissions, reduced dependence of fossil fuel imports and the positive impact on agriculture."

The U.S. is lagging far behind the E.U. in efforts to promote biofuels and attain energy independence and may pay dearly for this mistake if oil shocks of the 1970s are repeated in the coming decade. It is essential to the health of this country that action be taken now to include biodiesel tax incentives in the Energy Bill. The National Biodiesel Board has issued the following alert to its members:

    "Legislation only becomes law through perseverance. Congress is
    currently working on the Energy Bill, but there is a real chance
    that the biodiesel provisions could be left out. It is now up to
    us, the people they represent to persevere.

    "We must call and ask that they sign on as co-sponsors to HR 3119,
    a companion biodiesel bill. Their sponsorship will help keep the
    biodiesel provisions in the Energy Bill.

    "To see if your Congressman is a co-sponsor, go to
    http://www.biodiesel.org/misc/110403/. If not, call the House
    Switchboard at 202-224-3121 and ask that they co-sponsor HR 3119.

    "Summary and language of HR 3119 are available at
    http://biodiesel.grassroots.com/biodiesel_tax_incentive/"

    Charles Hatcher
    Regulatory Director
    National Biodiesel Board
    573-635-3893
    800-841-5849
    www.biodiesel.org

GSPI and American BioFuels, LLC urge all the readers of this press release to help our environment by contacting your Representative and urging him to sponsor HR 3119 and to push the Conference Committee to adopt Biodiesel Tax Incentives. This can be done easily by going to the Congressional web site www.house.com and going to the link "Contact your Representative."

Green Star Products Inc. is organized as a holding company with major ownership positions in a set of subsidiary and affiliated companies now commercializing advanced automotive and energy technology products. For more information, see GSPI's Web site at http://www.baat.com or call Investor Relations at 619-409-8977, fax [phone], or email [e-mail]. Information about trading prices and volume can be obtained at several Internet sites including http://www.bloomberg.com and http://www.bigcharts.com under the ticker symbol "GSPI."

Forward-looking statements in the release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, and other risks detailed from time to time in the Company's periodic filings with the Securities and Exchange Commission.