Lignol Innovations Inc., has filed a formal application with the U.S. Department of Energy ("DOE") regarding a grant for US$30 million under the DOE's cellulosic ethanol and biofuels funding program, to fund the development of a cellulosic ethanol commercial demonstration plant in Colorado. The company is a wholly owned subsidiary of the Canadian Lignol Energy Corporation (TSX-V: LEC)

Lignol has also signed a Project Development Agreement with Suncor Energy Products Inc. and its affiliate Suncor Energy (U.S.A.) to jointly fund the project development costs related to the DOE application.

"This DOE funding program is seeking to identify companies that can successfully develop biorefineries for ethanol and bio-based chemicals for industrial applications in the United States. Working closely with our stakeholders and industrial partners, we have developed a comprehensive application for DOE consideration," said Ross MacLachlan, President and CEO of Lignol.

Under the cellulosic ethanol and biofuels funding program, the DOE intends to make up to US$200 million in funding available over the next five years to support the development of small-scale cellulosic biorefineries in the United States. Successful applicants are expected to have their projects operational within three to four years of DOE funding approval. The DOE expects to announce the successful funding applicants by February 2008.