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July

Biocarburantes de Castilla y León informs

July 15, 2008

July, 15 of 2008.- Biocarburantes de Castilla y León, S.A. (BCyL), the company that is 50% owned by Ebro Puleva, S.A. and 50% by Abengoa Bioenergía, S.A., will resume bioethanol production in the next few weeks at its plant in Babilafuente (Salamanca), which has been out of service since September last year.

The plant, whose construction began in 2003 and which began operating in April 2006, was designed to produce bioethanol to be directly mixed with petrol in the Spanish market in order to meet the targets of the European directive of 2003 that promotes the use of biofuels, and the Renewable Energy Plan approved by the Council of Ministers in July 2005. However, to date the lack of a legal obligation to use bioethanol as a fuel in Spain has forced Biocarburantes de Castilla y León, S.A. to sell its production in other remote European markets, incurring high logistics costs. This is an expensive solution that is only feasible when the result is less costly than taking the factory out of service but without altering its commitment to its employees.

In July 2007 the Spanish government pushed through a new law, approved by parliament, which establishes a legal obligation to use biofuels in petrol and diesel. The law comes into effect on 1 January 2009 and BCyL believes that it will stimulate national demand. The current increase in bioethanol demand in Europe – the result of a growing number of countries establishing legal obligations for biofuels use – means that operations at BCyL can start up again while waiting for the law to become effective, which will occur when the government approves the Ministerial Order to enact it and to endorse a market for direct petrol and bioethanol mixtures in Spain.

The urgent implementation of measures that develop the mixed fuel obligation in Spain will lead to the creation of a national bioethanol market and should allow the plant in Salamanca to become fully operational again. Furthermore, only these measures and the resulting stability of the sector would provide BCyL with the financial resources to develop the second generation biofuels technological research and development program (cellulose biomass), whose first prototype plant in the world using cereal straw, is being constructed by Abengoa at the factory in Babilafuente (Salamanca).

Biocarburantes de Castilla y León, which currently employs 103 people and indirectly generates some 540 jobs in different services, maintenance and transport companies, continues with its objective to supply agriculture and the regional and national economies with the biofuels alternative – an alternative whose development possibilities continue to be untapped since its use of raw materials barely accounts for 2% of Spanish cereal production and forms part of energy diversification policy and the fight against climate change in the EU.



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