AE Biofuels Re-Starts 55 Million Gallon Per Year Ethanol Production Facility In Keyes, California

AE Biofuels, Inc. (OTC:AEBF), a global advanced biofuels company, today announced its wholly owned ethanol subsidiary AE Advanced Fuels Keyes, Inc. (AE Keyes) has restarted operations at the 55 million gallon per year ethanol production facility located in Keyes, California. Approximately 50 full time employees have been hired at the AE Keyes facility.

The original $130 million construction and commissioning of the plant was completed in November 2008 by Cilion, Inc. In early 2009 the plant was closed due to technical and market issues. AE Keyes took possession of the facility under a project agreement with Cilion in March 2010, signed a facility lease for up to five years, and funded $8 million of financing to retrofit and restart the plant.

The Keyes plant is a leader in environmentally responsible ethanol production with a 2.6:1 positive energy balance and near zero water discharge. In addition, the plant’s natural gas and steam powered turbine cogeneration unit generates all of the operating electric needs of the plant (4.3 megawatts), thus eliminating dependence on the state’s electrical grid.

AE Keyes was recently awarded a $1.88 million matching grant from the California Energy Commission (CEC) to accelerate the commercial implementation of AE Biofuels’ patent-pending, enzyme based, cellulosic ethanol production technology. The integrated cellulose/starch pre-commercial facility will be located near the 55 million gallon per year commercial ethanol facility. The CEC grant will enable the company to build upon prior enzyme optimization work conducted at its cellulose/starch pilot facility in Montana which was opened in 2008, and will help the State of California achieve the goals of the Low Carbon Fuel Standard (LCFS).

“The retrofit and restart of the Keyes plant was accomplished by a talented, dedicated management and operations team that has been expanded to more than 50 members,” said Eric McAfee, chairman and CEO of AE Biofuels, Inc. “We’re very pleased that the AE Keyes plant is now fully operational and delivering product to our California biofuels and animal feed customers."

About AE Biofuels

AE Biofuels, Inc. is a global advanced biofuels company based in Cupertino, California developing sustainable solutions to address the world’s renewable energy needs. The company operates a 55 million gallon ethanol plant in California and received a $1.8 million California Energy Commission grant to commercialize its patent-pending next-generation cellulosic ethanol technology that enables the production of advanced biofuels from both non-food and traditional feedstocks. The company’s wholly owned Universal Biofuels subsidiary built and operates a nameplate 50 million gallon per year biodiesel production facility on the east coast of India. For additional information about AE Biofuels, please visit www.aebiofuels.com.

Forward Looking Statements

The information contained herein includes forward-looking statements. These statements relate to future events. Statements regarding future events are based on the parties’ current expectations and are necessarily subject to associated risks related to, among other things, the ability of AE Advanced Fuels to successfully commercialize its cellulosic ethanol technology, changes in government policy regarding ethanol production, the reduction or elimination of federal tax incentives for ethanol production, and changes in environmental regulations. Actual results may differ materially from those in the projections or other forward-looking statements. For information regarding other related risks, please see the “Risk Factors” section of AE Biofuels’ filings with the SEC, including its most recent filings on Forms 8-K and 10-Q.