SEKAB Biofuels & Chemicals ends operational commitment in cellulose ethanol pilot due to inability to secure occupancy, financing; if no solution found, operations to halt Q1 2012

ORNSKOLDSVIK, Sweden , December 12, 2011 (press release) – SEKAB announced today that the company will end the operation and collaboration agreement for maintenance and operation of the Ethanol Pilot, owned by EPAB (Ethanol Pilot of Sweden AB). SEKAB has been working with EPAB to secure the occupancy and financing required for the continued operation of the Ethanol Pilot, but so far without results. SEKAB has informed the staff and called for Works Council Consultation negotiations (MBL-förhandling) regarding layoffs of up to 25 employees.

– We are saddened and disappointed that we are forced to negotiate regarding the lay off of much appreciated employees. SEKAB feels with the employees affected by this situation and we will do what we can to alleviate, said Anders Fredriksson, CEO of SEKAB.

The technology has come far in its development and E-Technology will in the future only be able to account for a smaller portion of the occupancy in the Ethanol Pilot. The majority of the occupancy and financing therefore need to come from a third party. Discussions have been held with companies, universities and government agencies in an attempt to resolve the issue, but so far without results. In total, the shortage of occupancy and financing is equivalent to 20 million SEK for 2012, which without the ending of the operational commitment would burden SEKAB.

– The efforts to find a solution for the future of the Ethanol Pilot will continue until all possibilities are played out, but since it concerns such a substantial amount, we cannot wait any longer to end the operational commitment, said Anders Fredriksson.

The efforts to find external financing and occupancy will continue parallel to the ending of the operational commitment. The estimation is that if no solution is found, the operations of the Ethanol Pilot will come to a halt following the first quarter of 2012. The decision solely concerns the operational responsibility for the operations in EPAB’s Ethanol Pilot and will have no impact on SEKABs other operations.

Cellulose ethanol has great potential as it helps to break the dependence on fossil energy and reduce the emissions of fossil carbon dioxide. The technology developed by E-Technology takes waste products from agriculture and forestry and converts them into ethanol, biogas and solid biofuel.

The next step for E-Technology is to commercialize gained knowledge and patented technology and to scale up the technology that has been developed in the Ethanol Pilot to a facility with full scale production of second generation bioethanol. About one hundred different research and development projects concerning cellulose ethanol are running globally and E-Technology is considered to be in the top in the world within the technology area. SEKAB has experience from over 30 000 hours of operations in the Ethanol Pilot, which has resulted in unique knowledge and know-how.

– SEKAB will continue to seek opportunities to commercialize its technology, said Anders Fredriksson.

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