Mission:

To Profitably Recycle Carbon Emissions to Biofuels, using Industrial Sequestration.

Vision:

To provide carbon management, combined with the production of clean fuels culminating in an efficient, profitable business venture. This venture approach supports team building that combines the complementary resources and capabilities of multiple companies dedicated to environmental stewardship and energy independence.

Carbon Emissions to BiofuelsClean Energy through Biotechnology

April, 2007

History of Large-Scale Algae Projects

1950’s MIT Feasibility tests for CO2 Conversion

1970’s - 80’s UC Berkeley wastewater treatment systems

First commercial open pond algal farms in US

US DOE initiates $50 million flue gas/algae program

1990’s Japan MITI $200 million bioreactor program (discontinued)

German and other EU government programs

Commercialization in Australia, Israel, and China; nutraceuticals production exceeds 4,000 tons/year

Greenfuel Technology Founded 2001

2001 - 2004 design and experimentation

2004 – Gen1 deployed at MIT Cogeneration Facility

2005 – Gen2 installed at 1000 MW power plant in Southwest; Instigated first International license with The Victor Smorgon Group

2006 - Developing coal (NYSERDA) and other applications (e.g. oil, waste water treatment, etc.) ; Building Gen3 Pilot Project

Algae Biotechnology Transforms Carbon Management from a Cost Into a Revenue

Power Plant / Energy Source

Flue Gases

NOx + CO2 from combustion flue gas

emissions

Patented Algal Biotechnology

CleanedGases

GreenFuel System

Algal Biotechnology Converts Flue Gases & Sunlight into Biofuels through Photosynthesis

“Used” Algae have Multiple Potential Uses

Sunlight

Co-Firing

Fermentation

Esterification

Drying

Green Power

Bio-Diesel

Ethanol

Protein Meal

DigestionBio-Gas

Potential Applications

Coal Fired Power Station

Water Treatment PlantAnaerobic Digestion and Power Generation

Gas Fired Power Station

Gas Processing Facility

Industrial Processing Facility

The Emissions to BiofuelsTM

technology is capable of being implemented at any facility that has CO2 emissions. The limiting factor for scale is either the land available or the volume of emission.

Operational and Technology Milestones

Prototype (2004)

Field Trial (2005-06)

Commercial ScaleProjects (2007+)

• Triangular bioreactors

• Performance proven at MIT’s 20 MW power plant

• Successful operation in real world conditions

• Performance independently validated

– 86% of NOx removed (24 hr average)

– Up to 82% of CO2removed (daytime average)

• Tubular bioreactors

• Submerged air-lift bioreactors

• US Southwest project envisions roadmap to a commercial scale facility

• Biofuel yield validation

• 4Q06 deployment

– ¼ acre scale field trial facility

• Proprietary new design

• Planned deployment

– 3 acre pilot facility—2007

– 300 acre expansion—2008-09

• Maximum deployment of 6,000 acres

• Rapid deployment in the US and international markets

Redhawk Power Station VideoCourtesy of The History Channel

0

20,000

40,000

60,000

80,000

100,000

120,000

GreenfuelsAlgae

Canola Palm OilLit

res

Bio

die

sel

Pro

du

ce

d /

He

cta

re /

Ye

a

0

20,000

40,000

60,000

80,000

100,000

120,000

GreenfuelsAlgae

Corn

Lit

res E

tha

no

l P

rod

uce

d /

He

cta

re /

Ye

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Biodiesel Ethanol

5,000 Litres / Hectare

1,000 Litres / Hectare

3,500 Litres / Hectare

Output Productivity – Oil per Hectare

Using the Greenfuels Technology, Algae can grow at a rate up to 320 tonnes per hectare. The Algae is then split into its component parts: Lipids (oil), Carbohydrates (sugars), and Protein.

There are many different species of Algae, and their percentage of each component varies depending on the Species and growth conditions. In the charts below we have assumed an equal percentage of each component.

Low Sunlight

High Sunlight

Low Sunlight

High Sunlight

-

100

200

300

400

500

600

700

Forest Sequestration

GreenFuel Sequestration

Tonnes of CO2 Sequestered per Year / Hectare

Low Sunlight

High Sunlight

The Emissions to BiofuelsTM Technology is based on a Profit rather than Cost Model

-

10

20

30

40

50

PotentialTrading / Penalty

GreenFuel

Carbon-Dioxide Mitigation ($ / ton)

COSTSBased on Report Extract:“The Prime Minister's Science, Engineering and Innovation Council - Ninth Meeting” - 5 December 2002 - Beyond Kyoto - Innovation and Adaptation

Kyoto Cost

Possible Cost in

Aust

PROFITABILITY The Emissions to BiofuelsTM

Technology will return a Profit which will vary depending on location specific Algal growth rate.

CO2 Mitigation

Geo-Sequestration

Development Process and Yields

Flue Gas* Processed Land Area

NOx** mitigated CO2 mitigated

Biofuels produced

(% of total) (hectares) (% of input) (tonnes / year) (Litres / year)

Small 1.5% 20 85% 13,600 4,159,500

Medium 15% 195 85% 136,000 41,595,000

Large 50% 650 85% 455,000 138,650,000

Maximum 100% 1,300 85% 916,000(42% of total) 277,300,000

*Based on 530MW combined cycle, natural gas system in High Sunlight**by mass of NOx ducted to Algae system

Phase 2 Phase 3Phase 1

On-Site Evaluation

• Feasibility Unit conducts 3-6 week on-site test for optimal algae production

• Field trial requires only slipstream of gas from emission stack

Pilot Program

• Installation of Mini Pilot onto ¼ acre facility

• Confirmation of all hardware, design, operability with scalability validation

• Additional results: Biofuels for internal use

Full Scale

• Build out pilot program with modular expansion

• Project optimized for maximum biofuel yield and ROI

Policy Gaps for Algae Bio-sequestration

Greenhouse gas abatement policy on both sides of politics is currently focussed at one end on “clean coal technology” including “post combustion carbon capture and storage” (geo-sequestration) and gasification.

At the other end is a rapidly developing credit system for greenhouse gas abatement through, among other things, agriculture or “traditional bio-sequestration”.

What the algae solution represents is a new clean coal alternative which falls into both these categories. In effect it is a “post combustion carbon capture and recycling” technology. Because it is a candidate in both camps, it is not currently being considered legitimate or eligible in either.

Adding further complication is that the algae alternative also crosses into the renewable fuels policy area. There is confusion around this as it is difficult for people to understand that the technology effectively recycles carbon. Many think that the carbon dioxide is ultimately released when the fuel is burned therefore it has only delayed the inevitable. We need to help people understand that this technology in fact offsets one usage of each carbon atom by effectively using each one at least twice and releasing them into the atmosphere only once.

Because this technology falls into all these areas, it risks being perceived as neither fish nor fowl. Policy to date has not fully contemplated solutions which effectively fall between the gaps by not fitting neatly into just one of the boxes: PCCC (Post Combustion Carbon Capture), GGA (Greenhouse Gas Abatement) or RECs (Renewable Energy Certificates).

Key Points of Bio-Sequestration

• The Greenfuels technology is in initial stages of commercialisation in a number of locations in the USA, after years of testing at MIT Boston.

• The Victor Smorgon Group (energetix) has an exclusive license for the Greenfuels Technology in Australia.

• The Victor Smorgon Group is a current manufacturer of Biodiesel in Victoria.

• The Greenfuels technology can sequester 42% of CO2 Emitted (82% in Daylight) by Stationary Emitters.

• Emissions to Biofuels Technology can be fitted or retrofitted to 61% of Australia’s Greenhouse Gas Emitters.

• 700 tonnes of CO2 will be Sequestered per Hectare of installed Technology.

• In excess of 200,000 litres of Biofuels (Biodiesel and Ethanol) can be produced per Hectare.

• 100 tonnes of Protein Meal is produced per Hectare.

• The Greenfuels Technology is based on a Profit not a Cost Model

• Algae grows in all areas of Australia, and prefers non-potable water.

• All water in the system is recycled.