AUGUST 2008

Cellulosic ethanol facility to be built in Michigan
Mascoma Corporation to build and operate the new Upper Peninsula facility

Mary Beth Stanek of General Motors and Bruce Jamerson, CEO of Mascoma, look on as Michigan Governor Jennifer Granholm speaks about Mascoma’s plans for a cellulosic ethanol facility in Michigan’s Upper Peninsula.

Governor Jennifer M. Granholm and Mascoma Corporation CEO Bruce A. Jamerson announced that the Massachusetts-based company has entered into a series of key strategic relationships to further Mascoma’s efforts to build its first commercial-scale cellulosic ethanol plant in Michigan’s Upper Peninsula.

Agreements with the Michigan Economic Development Corporation (MEDC), JM Longyear, and alliances formed with Michigan State University and Michigan Technological University will help bring the plant to Chippewa County, south of Sault Ste. Marie, where clean-burning, fuel-grade ethanol will be produced from wood fiber. The agreements build on Mascoma’s decision announced last July to locate in Michigan.

Mascoma’s single-step cellulose-to-ethanol method, called consolidated bioprocessing, or CBP, uses advanced technologies to make ethanol from non-food based renewable sources such as wood chips and other biomass. The clean-energy technology is critical to producing ethanol more quickly, efficiently and economically.

Mascoma chose Michigan for its first commercial-scale facility based on the vast sustainable forests and agricultural materials available and the expertise provided by JM Longyear. In addition, Mascoma will collaborate with MSU and MTU to develop and hone scientific processes that utilize Michigan feedstocks for cellulosic ethanol production.

“Working with the state of Michigan, two of its leading universities, and JM Longyear on this significant project brings us closer to commercial scale production of biofuels that can promote energy independence, reduce greenhouse gas emissions, and stimulate regional economic development,” Jamerson said.

Since becoming governor, Granholm has been an advocate of growing an alternative energy and alternative fuel industry in Michigan. Under her leadership, the Michigan Economic Development Corporation, led by President and CEO James C. Epolito, has worked with Mascoma to secure one of two locations in Chippewa County. Engineering is underway to finalize the site that will be secured through a land swap under negotiation with the Michigan Department of Natural Resources. The Center of Energy Excellence legislation was recently passed through the Michigan Legislature and with the governor’s signature, Mascoma will be eligible for a $15 million grant to become Michigan’s first Center of Energy Excellence.

“There are great synergies in Michigan for Mascoma, not only in the ready supply of wood fiber across northern Michigan, but also great research institutions with a long-time focus on this science and our 21st Century Jobs Fund that is tuned to bringing job-creating alternative energy ventures to Michigan,” Epolito said.

Mascoma and Marquette-based JM Longyear, a leading natural resource company, entered into a strategic relationship to combine Mascoma’s technology with JM Longyear’s significant project development experience, including its recent $1.6 billion Minnesota Steel project and its deep natural resource experience.

Mascoma is collaborating with research partners globally to identify and patent additional biomass-to-ethanol technologies. MSU will provide expertise in areas primarily relating to pretreatment technology for cellulosic ethanol production and assistance with renewable energy crops that can be utilized by the biorefinery. MTU will contribute its knowledge of sustainable forestry management practices and access to its automotive engineering laboratories for analysis of the biofuels produced at the project site – part of its “wood to wheels” initiative.

Prior to the announcement of its first commercial-scale production facility in northern Michigan, Mascoma announced a pilot project in Rome, New York, which is now under construction and will be completed by the end of the year, and a pre-commercial scale facility to be run on switchgrass in Tennessee. Last month, Mascoma announced equity investments by General Motors and Marathon Oil Corporation as part of a $61 million third round of funding.

“Collaborative, private-public partnerships such as this initiative on the part of the state of Michigan and Mascoma are integral to our ability to bring next-generation, environmentally friendly renewable fuels derived from non-food feedstocks out of the laboratory and into full-scale commercial production,” said Cliff C. Cook, Marathon senior vice president.