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March

Abengoa Bioenergía - Ecoagrícola promotes the development of cereal crops with the European Union aid programmes

March 9, 2006

For several years Ecoagrícola has developed its activity and commitment of promoting cereal production with the capacity of adapting to the new context of a much more open market. For this reason along with its traditional function of feed production, it has to satisfy the new economic requirements and social demands. With these new production systems a common objective for a greater rural development of these zones is pursued. Therefore the promotion of new performances based on Agrarian Policies whose pillars strengthen the development of Energy Crops directed towards the production of renewable energies, is becoming increasingly more indispensable.

Before this new panorama under the context of the new CAP Reform, Ecoagrícola is developing an ambitious commercial plan based on a series of informative chats and/or conferences in which the modalities of contracts under communitarian norms are set out.

On the other hand and due to the great acceptance on behalf of the sector of our participation in this type of event, Ecoagrícola will organize more conferences on a national level with the aim of increasing the number of farmers who participate in these type of contracts. At the same time a series of conferences throughout the great producing cereals region in the United Kingdom is being prepared (Newmarket, Newbury, Lincoln/Doncaster, Luton, Maidstone, Leicester, Dudley and Leeds) to present our activities with the aim of developing this modality of crops in this country.

Parallel to the projects in Spain and the United Kingdom, there have already been first contacts made with German producers, thanks to the work carried out last year by Ecoagrícola which was completed successfully with the shipment of grain directly purchased from German farmers and sent by boat from Germany to the plant of Ecocarburantes Españoles. These type of complex operations make Ecoagrícola a company with noticeable international projection. The first initiatives for the development of the European programmes for Set Aside Lands and Energy Crops are already on the move, emphasizing Germany and the United Kingdom at present, but with a clear intention of expanding to other European countries like Poland, Hungary and Italy.

Last 14th of February the first of the abovementioned conferences was held in the Meliá Horus Hotel (Salamanca), and received a great acceptance by the 208 farmers who attended. This was the first contact between two parties that must work very closely together, on one hand Ecoagrícola, and on the other hand the farmers who showed a great interest in this possibility of cereal contracts. The conference finished with a lunch debate with all the farmers to listen to their different preoccupations. Strong points to be highlighted were the application of the CAP model according to the new reform and future perspectives of the sector under the context of Biofuels from cereals.

With the growth of the Business Group expected in the following years, Ecoagrícola´s presence in the European cereal market is more and more indispensable to guarantee a regular supply to our Plants. The needs to purchase this year will be duplicated due to the starting up of Biocarburantes Castilla and León, and therefore the knowledge of the raw material market from its origin till it reaches our Plants, must reinforce the position of Ecoagrícola and consolidate the Spanish field in the development of Energy Crops for use in Biofuels.

Due to all of this, the great challenge that Ecoagrícola has embarked on for this first campaign in Europe under these programmes, is to contract the amount of 50,000 metric tons in the United Kingdom which will be extended in the year 2007 with the introduction of these European programmes in Germany. These systems of contracting are based on the model that Ecoagrícola has been developing in Spain for several years (1998). Under the new perspective of the EU to develop policies that boost the use of biofuels from biomass, a great opportunity is presented for the Business Group, through Ecoagrícola to develop the programmes of Energy Crops directed towards the production of renewable energies. This will have to be completed in the following years and in which Ecoagrícola aims to contract a great part of the raw materials consumed by our Bioethanol plants and in the near future Biodiesel plants, reaching a quota in the market to cover 80% of our needs under these programmes.



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