Lignol Energy Corp. announced the signing of a formal Memorandum of Understanding between M Energy Co. Ltd. and LEC establishing the framework by which the two companies will work together to restart LEC's 140 MMly (37 MMgy) biodiesel plant and incorporate M Energy's proprietary pretreatment technology. The parties have been in discussions regarding an investment structure which, if successful, would provide sufficient capital for the Darwin project and an opportunity for M Energy to become an equity partner in the project.

The two companies have collaborated over the past several months to develop a technology and commercial feasibility study on the integration of M Energy's patented pretreatment solution with the company's Lurgi-designed biodiesel plant located in Darwin, Australia. This has involved physical inspections of both the Darwin plant and of M Energy's operating pretreatment plant in Korea. Samples of feedstocks for the Darwin plant have also been tested and verified to work with the M Energy pretreatment technology. The scope of the collaboration also covers marketing rights to M Energy's technology in Australia as well as commercial synergies in feedstock procurement, offtakes and sales of biodiesel to export markets.

The Darwin project involves the completion of certain Lurgi upgrades to ensure operability as well as routine replacement and refurbishment of certain existing components, followed by implementation of M Energy's proprietary pretreatment package, which will allow the plant to process a range of low-cost, sustainably certified high free fatty acid waste feedstocks. Biodiesel produced from certified waste feedstocks that meet quality specifications can be sold into certain markets around the world at a premium price; especially those markets which have established mandates for environmentally sustainable fuels.

M Energy is a profitable biodiesel producer with three operating plants in Korea. M Energy's production capacity is the second largest in Korea, capable of producing 135 million liters per annum, soon to become 185 million liters capacity once the Iksan plant is recommissioned this year. M Energy has developed a patented, proprietary pretreatment process for the processing of low-cost, high free fatty acid feedstocks from a range of waste materials. The technology has been installed at one of M Energy's operating biodiesel plants where it has been proven to work at commercial scale. High-quality biodiesel is produced by M Energy and it currently sells a significant portion of its production to Europe under long term agreements at the premium prices established for biodiesel produced from sustainably certified waste feedstocks.