ITOCHU Announces Investment in a U.S. Venture Having a Biodiesel Fuel Manufacturing Technology

Demonstration Experiments for Fuel Manufacturing Using a New Catalyst Start in Japan

March 1, 2011

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has purchased shares in Benefuel, Inc. (headquartered in Illinois, USA; Robert Tripp, CEO; hereinafter “Benefuel”). ITOCHU now has a stake of more than 4% in Benefuel. ITOCHU is looking to develop operations using a technology for manufacturing biodiesel fuel efficiently and at low cost, using a new Benefuel catalyst, in Asia.

In the conventional technology for manufacturing biodiesel fuel, fat and oil cannot be used as a material unless fatty acids (*1) are removed. Low-quality fat and oil with high fatty acid content, such as residues from food factories or oil plants, are therefore difficult to use. Biodiesel fuel needs to be manufactured only after fat and oil, the materials, are purified as close to edible fat.

The new catalyst of Benefuel, which is called bifunctional solid catalyst, is a breakthrough catalyst that can convert fat and oil and fatty acids to biodiesel fuel at the same time. Since low-quality fat and oil having high fatty acids content can be used as is, waste oil and non-edible oil are used more readily. When a solid catalyst is used, no liquid catalysts remain in products or by-products, and the process of removing liquid catalysts from products is not necessary. As a result, there is no effluent, and high purity glycerin, a by-product, becomes usable for industrial applications. The production process is simplified, and biodiesel fuel can be manufactured at low costs.

ITOCHU started demonstration experiments in a pilot plant for using the bifunctional solid catalyst jointly with Daiki Axis Co., Ltd. (headquartered in Matsuyama, Ehime; Hiroshi Ogame, President & CEO; hereinafter “Daiki Axis”), a leading manufacturer of biodiesel fuel in Japan. The demonstration experiments are part of the NEDO Innovation Promotion Program (*2) and are being conducted as the “development of a next-generation BDF (biodiesel fuel) manufacturing process using a bifunctional solid catalyst” by Daiki Axis.

ITOCHU is aiming to develop operations using the bifunctional solid catalyst especially in markets in Asia by 2012. ITOCHU will continue to develop promising, environmentally friendly, cutting-edge technologies and to promote the creation of new businesses through investment in businesses and business development.

*1 Fatty acids
Fatty acids are degradation products of fat and oil. Fat and oil break down into glycerin and fatty acids.

*2 NEDO Innovation Promotion Program
This program is intended to enhance the international competitiveness of private enterprises and to create new industries by promoting the development of practical applications of technology seeds of private enterprises.

About Benefuel

Benefuel Inc.
Representative Robert Tripp
Headquarters Chicago, Illinois, USA
Established January 2008
URL http://www.benefuel.net/

About Daiki Axis

Daiki Axis Co., Ltd.
Representative Hiroshi Ogame
Headquarters 1-9-1 Misawa, Matsuyama, Ehime
Established July 2005
URL http://www.daiki-axis.com/