China Clean Energy, a producer of biodiesel fuel and green specialty chemical products in The People's Republic of China, today announced that it signed a contract to purchase land usage rights for 50 years for the construction of a new biodiesel factory located in the new Fuqing Jiangyin Industrial Park in the Fujian Province of the PRC.

The new factory site is approximately 50 miles from Fuzhou, the capital city of Fujian Province, and 15 miles from China Clean Energy's existing facility at the Longtian Industrial Park of Fuqing. The new industrial park is equipped with a deep-sea harbour capable of accepting 300,000 ton cargo ships, a container port, and railroad to be connected to the PRC's national railroad network by 2008. 

China Clean Energy expects to break ground on the new biodiesel facility within the next six to nine months, pending completion of the new industrial park's infrastructure construction. Work on the China Clean Energy's facility will be divided into two phases of construction. The first phase will require approximately a $9 million investment (including $2.5 million for land usage rights) and will increase the company's biodiesel production capacity by approximately 50,000 tons per year. The second phase will require an additional $6 million investment and will increase biodiesel production capacity approximately by an additional 50,000 tons per year. The company expects the first and second phases of construction to be completed by the first half of 2008 and end of 2008, respectively. China Clean Energy has signed long-term agreements with major processors from Indonesia and Malaysia to supply palm oil leavings (waste) as raw materials for the new facility.

''We are very pleased to announce our plans to construct a new biodiesel facility in the new Fuqing Jiangyin Industrial Park. This area is strategically located close to our existing location and established markets, and will have a multi-modal transportation infrastructure,'' commented Mr. Tai-ming Ou, China Clean Energy's Chairman and Chief Executive Officer. "Our new facility will allow us to meet the rapidly increasing demand for environmentally-friendly energy sources in China.''

The fast pace of economic growth in recent years has turned China into the second largest oil consumer in the world, based on statistics compiled by the International Energy Agency. In order to support the growth of the economy, reduce reliance on imported oil and increase the use of environment friendly energy, the Chinese government, in its 11th Five Year Plan, increased its commitment to promote renewable energy sources, such as biodiesel. Biodiesel can be used in virtually any existing diesel engine without modification and, in the opinion of company management, it provides a number of advantages over fossil diesel, including the reduction in carbon emissions with a similar energy value, and the increase in handling safety due to higher flash point (the point fuel ignites) and biodegradability (spills cause little or no harm to the environment). In addition, China generates a significant amount of low cost waste vegetable oil and recycled cooking oil that can be used in the production of biodiesel. The company believes it can leverage the high availability of low cost feedstock in China for the production of biodiesel to establish a cost advantage that may, in the future, create export opportunities.