August 27

Lignol Confirms Site for its Proposed Cellulosic Ethanol Plant in Colorado

Lignol Energy Corporation (TSX-V: LEC) (\"Lignol\" or \"the Company\"), a leading technology company in the cellulosic ethanol and biorefining sector, announced today that its U.S. subsidiary, Lignol Innovations Inc., is moving forward with its previously announced plan to construct a commercial demonstration cellulosic ethanol plant in Colorado. Lignol has recently received approval from the U.S. Department of Energy (\"DOE\") to locate the facility in Grand Junction, on the western slope of Colorado. The approved location is a change from the originally proposed site adjacent to Suncor Energy (U.S.A.) Inc.\'s (\"Suncor\") refinery in Commerce City, Colorado.

Lignol is expecting that Suncor will operate the facility, to be built next to Suncor\'s products distribution terminal in Grand Junction. The Grand Junction location offers logistical advantages including access to feedstock and ethanol distribution efficiencies. Site specification decisions are subject to regulatory approval. In January 2008, the DOE approved Lignol\'s funding application for a proposed cellulosic ethanol plant, including up to US$30 million in funding to construct the facility. Lignol continues to negotiate the final details of the DOE funding agreement and related party agreements.

The proposed facility will be designed to process hard and soft woods and agricultural residues such as straw and corn stover. Lignol expects the facility, once operational, will process about 100 tonnes of feedstock per day and produce approximately 10 million litres of ethanol per year.

About Lignol

Lignol (TSX-V: LEC) is a Canadian company undertaking the development of biorefining technologies for the production of fuel-grade ethanol and other biochemical co-products from non-food cellulosic biomass feedstocks. Lignol\'s modified solvent based pre-treatment technology, originally developed by a former affiliate of General Electric, and then further developed and commercialized for wood-pulp applications by a subsidiary of Repap Enterprises Inc., facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including HP-L(TM). Lignol is executing on its development plan through strategic partnerships to further develop and integrate the core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology. For more information about Lignol, please visit our website at www.lignol.ca.

Caution concerning forward-looking statements:

Certain statements contained in this document may constitute \"forward-looking statements\". When used in this document, the words \"may\", \"would\", \"could\", \"will\", \"intend\", \"plan\", \"anticipate\", \"believe\", \"estimate\", \"expect\", \"investigate\", \"looking at\" as they relate to Lignol or its management, are intended to identify forward-looking statements or information. Such statements or information reflect Lignol\'s current views with respect to future events and are subject to certain risks, uncertainties and assumptions. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Many factors could cause Lignol\'s actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or information, including among other things, those risk factors which are discussed elsewhere in documents that Lignol files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. The Company expressly disclaims any intention or obligation to update or revise any forward looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

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SOURCE: Lignol Energy Corporation

Lignol Energy Corporation: Ross MacLachlan, President & CEO, Tel: (604) 222-9800 ext. 107, Email: This email address is being protected from spambots. You need JavaScript enabled to view it.; Bruce Wigle, Investor Relations, The Equicom Group, Tel: (416) 815-0700 ext. 228, Email: This email address is being protected from spambots. You need JavaScript enabled to view it.