Eastman to Benefit from $130 Million Investment Tax Credit.

Proposed industrial gasification polygeneration project would supply its Longview, Texas, site

KINGSPORT, Tenn. -- Eastman Chemical Company (NYSE:EMN), a world leader in gasification expertise, announced today that it has received confirmation that TX Energy, LLC, (TXE) has been awarded a federal Investment Tax Credit of $130 million for a proposed industrial gasification project that will produce multiple products ("polygeneration"), among which will be raw materials for Eastman's Longview, Texas, site and products for sale into the market.

The facility, being developed by TXE in cooperation with Eastman, is one of the projects Eastman recently announced it is actively pursuing in North America. Eastman will provide project development support, including engineering support, and the facility will be started-up and operated by Eastman or an affiliated company.

Mark Costa, Eastman's senior vice president, corporate strategy and marketing, said the award to TXE is a key step in moving this project forward and validates Eastman's strong expertise in this area.

"I'm pleased that the Department of Energy, the Treasury Department, and members of Congress recognize the value of providing these types of incentives for large-scale commercial polygeneration facilities like the one we currently have under development," Costa said. "Awards such as these help minimize the risks of developing these types of projects while helping promote energy diversity and security for the United States."

The Investment Tax Credit was authorized by the Energy Policy Act of 2005 which sought to support the deployment of the most advanced technologies currently available to utilize coal and other domestic feedstocks in the cleanest, most efficient manner.

Eastman intends to off-take methanol from the project, which Eastman would then convert into downstream products, such as olefins for its Longview site. The project would also produce other high-value products for the market. With this and other projects, the company expects over time to increase Eastman's product volume derived from gasification-based raw materials to 50 percent, enabling the company to achieve low, stable cost positions and capitalize on the differential in cost between oil and coal.

Eastman was a pioneer in commercializing the first U.S. chemicals-from-coal facility in 1983 and is the only company to produce commercial quantities of acetyl chemicals from coal. Eastman has extensive technical and operational expertise in gasification technology.

About TX Energy, LLC

TX Energy, LLC is a Delaware limited liability company organized to develop, build and own gasification facilities.

About Eastman Chemical Company

Eastman manufactures and markets chemicals, fibers and plastics worldwide. It provides key differentiated coatings, adhesives and specialty plastics products; is the world's largest producer of PET polymers for packaging; and is a major supplier of cellulose acetate fibers. Founded in 1920 and headquartered in Kingsport, Tenn., Eastman is a FORTUNE 500 company with 2005 sales of $7 billion and approximately 12,000 employees. For more information about Eastman and its products, visit www.eastman.com.