11 Januar 2006

Volkswagen, Shell and Iogen to Study Feasibility of Producing Cellulose Ethanol in Germany

Letter of Intent Signed at Detroit Auto Show

Volkswagen, Shell and Iogen Corporation announced today that they will conduct a joint study to assess the economic feasibility of producing cellulose ethanol in Germany. This advanced biofuel produced by Iogen can be used in today’s cars and can cut CO2 emissions by 90% compared with conventional fuels.

Iogen’s cellulose ethanol is a fully renewable advanced biofuel made from the non-food portion of agriculture residue such as cereal straws and corn stover, and is one of the most cost-effective ways to reduce greenhouse gas emissions in road transport. Iogen’s cellulose ethanol technology is the result of more than 25 years of research and development. The company operates the world’s only cellulose ethanol demonstration-scale facility and made the first commercial shipments of this fuel in April 2004.

“We are strongly committed to reducing dependence on fossil fuels and are looking for the most effective approach to substitute these fuels by innovative biofuels.That is the only way we can cost effectively satisfy people’s individual mobility needs in the long term,” said the Chairman of the Board of Management of Volkswagen AG, Dr. Bernd Pischetsrieder, when the parties signed the letter of intent at the North American International Auto Show (NAIAS) 2006 in Detroit.

“We are proud to be joined by VW in our long-standing partnership with Iogen in exploring the feasibility of building a cellulose ethanol plant in Germany,” said Rob Routs, Executive Director Downstream (Oil Products and Chemicals) Royal Dutch Shell. “As a company, we are now turning our focus to those renewable fuels and technologies that complement our fuel business by leveraging our existing assets, infrastructure and expertise in developing the world’s most innovative and advanced fuels. This partnership builds on our significant investment in Iogen and is another step in our journey to become the leading provider of the next generation of fuel solutions.”

“Iogen has demonstrated that clean, renewable fuels for transport are no longer a dream, they are a reality,” said Brian Foody, Iogen President. “Today’s announcement marks the first signal of what could be a major change coming in the European fuel market. It will show that by integrating vehicle and fuel technologies, we can meet the ambitious, but necessary challenge of reducing reliance upon fossil fuels”.

“The availability of high quality, synthetic biofuels manufactured to stringent specifications is a prerequisite for the deployment of advanced generation engines. The combination of second-generation biofuels and advanced fuel/powertrain represents a quantum leap in environmental compatibility. An integrated approach encompassing engine technology and fuel properties as well as consumer behavior is the only way to comply with future, more stringent requirements such as those set by the European Union,” commented Pischetsrieder.

All automotive manufacturers warrant the use of cellulose ethanol blends: 10% (E10) in North America and 5% (E5) in Europe. In 2003, the European Union issued a biofuel directive in response to anticipated shortages and rising costs of fossil fuels. The directive targets 5.75% biofuels by 2010. The US Energy Policy Act of 2005 introduced a nationwide renewable fuels standard (RFS) that will double the use of ethanol and biodiesel by 2012.

Source: PRnewswire Jan. 11, 2006.

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