Lignol Awarded up to US$30 Million in Funding from U.S. Department of Energy to Build Cellulosic Ethanol Plant



    VANCOUVER, Jan. 29 /CNW/ - Lignol Energy Corporation (TSX-V: LEC) today
announced that its U.S. subsidiary, Lignol Innovations Inc., has been awarded
up to US$30 million in funding from the U.S. Department of Energy ("DOE") to
build a commercial demonstration cellulosic ethanol plant. The DOE has
approved a funding application submitted by Lignol Innovations for a proposed
plant which is planned to be operated by Suncor Energy (U.S.A.) Inc.
("Suncor") which owns and operates a major refinery in Commerce City,
Colorado.
    "We believe our successful application for DOE funding further validates
the commercial potential of our unique biorefining process," said Ross
MacLachlan, President and CEO of Lignol Energy Corporation. "Through its
cellulosic ethanol and biofuels funding program, the DOE is seeking projects
that demonstrate potential to rapidly move to commercial-scale using
breakthrough technologies, a sound business strategy, and collaboration
between industry, universities, and the DOE's national laboratories. We look
forward to advancing this project with support from the DOE and our industry
partners."
    Lignol and Suncor will work together to finalize the site specific plans
and engineering and to determine the optimum plant location in order to
leverage Suncor's Colorado-based marketing and operating capabilities. Suncor
has a number of suitable properties in Colorado for this development,
including Commerce City. Lignol and Suncor have yet to consider all of the
details with respect to the final funding agreement and the determination of
final dates for construction, however the DOE funding requires that the plant
must be completed by 2012. Once completed, the plant is expected to produce in
excess of two million gallons per year of cellulosic ethanol, plus biochemical
co-products, including High Purity-Lignin ("HP-L(TM)"). Suncor will be the
operator of the plant and the exclusive buyer of all of the ethanol produced.
Plant capacity is expected to be 100 tonnes per day (dry basis) of hard and
soft wood feedstock. Lignol Innovations' proprietary solvent pretreatment
process, integrated with saccharification, fermentation and product recovery
processes also has the capability to process agricultural residues and other
feedstocks.
    In May 2007, the DOE announced that it will provide up to US$200 million,
over five years (FY'07-'11) to support the development of small-scale
cellulosic biorefineries in the United States, under its cellulosic ethanol
and biofuels funding program. Lignol Innovations announced that it had
submitted a formal application to the DOE in August 2007 for a grant of up to
US$30 million. The DOE's announcement today represents the first round of
funding (US$114 million in total) awarded as part of the DOE's small-scale
biorefinery funding program. Through this funding initiative, the DOE intends
to support projects to develop biorefineries at ten percent of commercial
scale that produce liquid transportation fuels such as ethanol, as well as
bio-based chemicals and bioproducts used in industrial applications. Building
on President Bush's goal of making cellulosic ethanol cost-competitive by
2012, these ten-percent of commercial-scale biorefineries will use a wide
variety of feedstocks and test novel conversion technologies to provide data
necessary to bring online full-size, commercial-scale biorefineries.
Successful applicants are expected to have their projects operational within
three to four years of DOE funding approval.
    For further information on the DOE's small-scale biorefinery funding
program, please refer to the DOE web site at: http://www.energy.gov/

    About Lignol Energy Corporation

    Lignol Energy Corporation (TSX-V: LEC) ("Lignol") is undertaking the
development of biorefining technologies for the production of fuel-grade
ethanol and other biochemical co-products from cellulosic biomass feedstocks.
Lignol's modified solvent based pre-treatment technology, originally developed
by a former affiliate of General Electric, and then further developed and
commercialized for wood-pulp applications by a subsidiary of Repap Enterprises
Inc., facilitates the rapid, high-yield conversion of cellulose to ethanol and
the production of value-added biochemical co-products, including High Purity
Lignin ("HP-L(TM)"). Lignol is executing on its development plan through
strategic partnerships to further develop and integrate the core technologies
on a commercial scale. Lignol also intends to invest in, or otherwise obtain,
equity interests in energy related projects which have synergies with its
biorefining technology. For more information about Lignol, please visit our
website at www.lignol.ca

    Caution concerning forward-looking statements

    Certain statements contained in this document may constitute
"forward-looking statements". When used in this document, the words "may",
"would", "could", "will", "intend", "plan", "anticipate", "believe",
"estimate", "expect", "investigate", "looking at" as they relate to Lignol or
its management, are intended to identify forward-looking statements or
information. Such statements or information reflect Lignol's current views
with respect to future events and are subject to certain risks, uncertainties
and assumptions. Forward-looking statements and information are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant business,
economic and competitive uncertainties and contingencies. Many factors could
cause Lignol's actual results, performance or achievements to be materially
different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements or information,
including among other things, those risk factors which are discussed elsewhere
in documents that Lignol files from time to time with securities regulatory
authorities. Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking statements or information
prove incorrect, actual results may vary materially from those described
herein as intended, planned, anticipated, believed, estimated or expected. The
Company expressly disclaims any intention or obligation to update or revise
any forward looking statements and information whether as a result of new
information, future events or otherwise. All written and oral forward-looking
statements and information attributable to us or persons acting on our behalf
are expressly qualified in their entirety by the foregoing cautionary
statements.

    The TSX Venture Exchange Inc. has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

    %SEDAR: 00004360E




For further information:

For further information: Lignol Energy Corporation, Ross MacLachlan,
President & CEO, Tel: (604) 222-9800 ext. 107, Email: info@lignol.ca; The
Equicom Group, Bruce Wigle, Tel: (416) 815-0700, 1-800-385-5451 ext. 228,
Email:bwigle@equicomgroup.com

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Lignol Energy Corporation

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