Lignol Signs US$30 million Cooperative Agreement with the U.S. Department of Energy



    VANCOUVER, Oct. 28 /CNW/ - Lignol Energy Corporation (TSX-V: LEC)
("Lignol" or "the Company"), a leading technology company in the cellulosic
ethanol and biorefining sector, today announced that its U.S. subsidiary,
Lignol Innovations Inc., has signed a US$30 million Cooperative Agreement (the
"Agreement") with the U.S. Department of Energy ("DOE"). The Agreement
formalizes the DOE's previously announced financial assistance award to Lignol
of up to US$30 million relating to the construction of a commercial
demonstration cellulosic ethanol plant in Colorado. The Agreement sets out two
stages of funding allocation based on the achievement of various milestones.
    The first phase of the Agreement covers the development of the commercial
demonstration plant leading up to its construction and will include such
activities as preliminary plant engineering and design as well as
environmental documentation and permitting. The costs associated with this
first phase are expected to be approximately US$3.12 million, of which the DOE
will contribute 50% (US$1.56 million).
    Upon the successful completion of the milestones outlined within the
first phase, the second phase of funding support will commence with the DOE
contributing up to 50% of the total cost of plant construction up to a maximum
of US$28.44 million. As with many similar federally funded programs, such
contributions are subject to the availability of appropriated funding for each
fiscal year.
    Once completed, the plant will process non-food cellulosic materials,
such as hardwood, softwood and agricultural residues and is expected to
produce in excess of two million gallons per year of cellulosic ethanol, plus
biochemical co-products, including HP-L(TM) High Purity Lignin ("HP-L(TM)
Lignin").

    About the DOE biofuels funding program

    In May 2007, the DOE announced that it will provide up to US$200 million,
over five years to support the development of small-scale cellulosic
biorefineries in the United States, under its cellulosic ethanol and biofuels
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. 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

    Lignol (TSX-V: LEC) is a Canadian company undertaking the development of
biorefining technologies for the production of fuel-grade ethanol and other
biochemical co-products from non-food cellulosic biomass feedstocks. Lignol's
modified solvent-based pre-treatment technology facilitates the rapid,
high-yield conversion of cellulose to ethanol and the production of
value-added biochemical co-products, including HP-L(TM) Lignin. 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.

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

    Caution concerning forward-looking statements:
    

    Certain statements contained in this document may constitute
forward-looking information within the meaning of applicable securities laws.
Such forward-looking statements or information include, without limitation,
statements or information about the planning and development of our cellulosic
ethanol commercial demonstration plant in Colorado, our ability to exploit
commercial opportunities and broaden our market opportunities for a range of
cellulosic derivatives and environmentally sustainable biochemicals and our
ability to pursue these opportunities with strategic partners.  Often, but not
always, forward-looking statements or information can be identified by the use
of words such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes" or variations of such words and phrases
or words and phrases that state or indicate that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Such statements or information reflect Lignol's current views with
respect to future events and are subject to certain risks, uncertainties and
assumptions, including, without limitation, our ability to finance the
development of the commercial demonstration plant, our ability to develop our
products, our ability to obtain requisite regulatory approvals and our ability
to enter into agreements with strategic partners on terms acceptable to us. 
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, the complexity of the development of the commercial demonstration
plant, market conditions which will effect our ability to finance our
operations, risks relating to the protection of Lignol's core technology from
infringement and 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. Except as
required by law, 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.

    %SEDAR: 00004360E




For further information:

For further information: Paul Hughes, Vice President Corporate
Development & Communications, Tel: (604) 222-9800 ext. 110, Email:
phughes@lignol.ca, Email: info@lignol.ca; Bruce Wigle, Investor Relations, The
Equicom Group, Tel: (416) 815-0700, 1-800-385-5451 ext. 228,
Email:bwigle@equicomgroup.com

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