THORNEY TECHNOLOGIES LTD — Capital/Financing Update 2005

Oct 25, 2005

AUSTRALIAN RENEWABLI FUELS LUMTED

AUSTRALIAN RENEWABLE FUELS LIMITED

ARN 66 DG6 7R2 188

SUITE 1B.LEVEL 5 SOUTH SHORE PIAZZA 85 SOUTH PERTH ESPLANADE SOUTH PERTH WAS 5151

P.O. BOX 837 SOUTH PERTH WA 6951

$756$ +61893633500 $FAX$ 161893633511 E-MAIL Info@arfuels.com.au WER www.arbeis.com.au

Wednesday, 26 October 2005

Company Announcements Office Australian Stock Exchange Limited 10^th Floor, 20 Bond Street SYDNEY NSW 2000

Dear Sir/Madam,

RE: ARF Progress Update

The directors of Australian Renewable Fuels Limited are pleased to announce that all process plant modules for the Company's Adelaide biodiesel plant have now been received and installed at the site, with plant commissioning scheduled for commencement in November. In addition, all of the plant modules for the Picton biodiesel plant are in transit to the site, with the first arriving in Fremantle vesterday. Commissioning of this plant is scheduled to commence in January 2006.

Further, the Company is pleased to advise that it has reached agreement with Energea Umwelttechnologie Gmbh ("Energea") on an Exclusive Manufacturing Licence Agreement. Energea is the biodiesel technology and facility provider that ARF has used for its Adelaide and Picton projects. It is also the technology ARF will look to use in any future plants it may construct. Under this agreement, ARF will have the exclusive right to manufacture Energea designed biodiesel plants in the Australian region. ARF previously established an Exclusive Technology Supply Agreement between the Company and Energea for the Australian region and this new agreement compliments that original one.

This places ARF in a dominant position with an exclusive right to exploit the Energea biodiesel technology, recognised by many as the best available globally.

Yours faithfully,

Darryl J Butcher CEO/Managing Director

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