JUNE 2008

GM and Marathon enter into biofuels relationship with Mascoma

General Motors Corp. (GM) and Mascoma Corp. have entered into a relationship to develop cellulosic ethanol focused on Mascoma’s single-step biochemical conversion of non-grain biomass into low-carbon alternative fuels to help address increasing energy demand.

The relationship, which includes an undisclosed equity investment by GM, complements an earlier investment in a cellulosic ethanol startup that uses a thermo-chemical process to make ethanol from non-grain sources.

“Taken together, these technologies represent what we see as the best in the cellulosic ethanol future and cover the spectrum in science and commercialization,” GM president Fritz Henderson said. “Demonstrating the viability of sustainable non-grain-based ethanol is critical to developing the infrastructure to support the flex-fuel vehicle market.”

Mascoma and Marathon Oil Corporation announced a $10 million equity investment by Marathon in Mascoma. The investment, which is part of $61 million raised in Mascoma’s third round of funding, reflects Marathon’s commitment to collaboration on the development, adoption and deployment of environmentally-friendly and cost-effective next generation ethanol production.

Marathon’s investment will go towards the funding of research and development activities at Mascoma, as well as the construction of operating facilities. As part of this new investment, Cliff Cook, senior vice president of supply, distribution and planning at Marathon, has joined the Mascoma board of directors.

With the completion of this round of financing, Mascoma has raised approximately $100 million in equity investment. Mascoma has also received commitments for over $100 million in state and federal grants, including the recent awarding of a $26 million grant from the U.S. Department of Energy.

Mascoma has raised significant equity from venture capital investments and secured more than $60 million in state and federal grants, including the recent awarding of a $26 million grant from the United States Department of Energy.

Mascoma’s single-step cellulose-to-ethanol method, called Consolidated Bioprocessing, or CBP, lowers costs by limiting additives and enzymes used in other biochemical processes.

Based in Boston, privately held Mascoma is using proprietary microorganisms developed at the company’s laboratories in Lebanon, New Hampshire, and is collaborating with research partners globally to identify and patent additional biomass-to-ethanol technologies.

Mascoma is testing its CBP technology and expects to begin producing ethanol later this year at its demonstration plant under construction in Rome, New York. Mascoma also has partnered with The University of Tennessee to develop a switchgrass-to-ethanol pilot facility near Knoxville, Tennessee, and is pursuing opportunities in the state of Michigan.