THORNEY TECHNOLOGIES LTD — Capital/Financing Update 2006

Apr 10, 2006

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AUSTRALIAN RENEWABLE FUELS LIMITED

AUSTRALIAN RENEWABLE FUELS LIMITED

ABN 66 096 782 188

SUITE 1B, LEVEL 5 SOUTH SHORE PIAZZA BS SOUTH PERTH ESPLANADE SOUTH PERTH WA 6151

P.O. BOX 837 SOUTH PERTH WA 6951

+61893633500 781 $\mathcal{F} A X$ 161893633511 E-MAIL Info@arfuels.com.au WEB www.arfuels.com.au

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

Dear Sir/Madam,

11 April 2006

Please find attached an announcement consisting of three pages for release today.

Yours faithfully,

Arm L C

Max L Ger Finance Director/Company Secretary

AUSTRALIAN RENEWAB FUELS LUMTER

AUSTRALIAN RENEWABLE FUELS LIMITED

ARN 66 096 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

$T\mathbb{Z}I$ +61893633500 CAX 161893633511 E-MAIL Info@arfuels.com.au WEE www.arbeis.com.au

AUSTRALIAN RENEWABLE FUELS LIMITED (ASX Code: ARW) ACCELERATES DOMESTIC STRATEGY. EMBARKS ON US AND EUROPEAN EXPANSION

Biodiesel producer Australian Renewable Fuels Limited ("ARF") today announced the acceleration of its Australian expansion strategy as well as new opportunities in North America and Europe. This follows the recent completion of a placement which raised \$27 million.

Acceleration of Australian Expansion

ARF announced an accelerated roll-out strategy following the successful commissioning of the Company's 45 Mega litre Adelaide Biodiesel Plant and the imminent commencement of commissioning of a second 45 Mega litre plant in Picton, Western Australia.

ARF has previously announced the planned roll-out of a further three plants by the end of 2007 making a total of five plants. The Company is currently examining seven potential plant locations in the Australian region and expects to be able to announce the commencement of development on the three most suitable of these locations early in the second half of the 2006 calendar year enabling the target of five plants to be reached approximately 12 months ahead of schedule.

Commenting on the announcement, the Managing Director of ARF, Mr Darryl Butcher, said: "Having successfully commenced production at our Adelaide plant we are delighted to now be able to accelerate the roll-out of our strategy to establish a leading position in the Australian biodiesel market."

When all five plants are completed ARF's annual production in the Australian region will be 220 Mega litres, representing almost 70% of the Federal Government's 350 Mega litre biofuels target for 2010. In some cases, these plants may be undertaken in joint venture with partners in complementary industries. The capital cost for each is expected to range from \$15 million to \$25 million, depending on site-specific factors.

11 April 2006

ASX/Media Release

In order to facilitate this growth, and as evidence of the growing strength of the alliance between the company's biodiesel technology supplier (Energea) and ARF, the company has acquired the patent rights to Energea's biodiesel technology in Australia & NZ, complementing the Company's existing exclusivity and manufacturing rights.

As a further facilitation step, ARF has also established a \$9.8 million working capital facility with its bankers, HSBC.

North American Expansion

ARF also announces an expansion into the US following an agreement to purchase Energea's biodiesel technology patents for the NAFTA Zone, encompassing the United States of America, Canada and Mexico.

ARF will establish a North American subsidiary ("the Subsidiary") which will become both a producer of biodiesel and a supplier of biodiesel technology throughout the NAFTA Zone.

The initial focus of the Subsidiary will be to establish a suitably resourced US operating base. This will be followed by feasibility studies for two large scale (circa 275 Mega litres per annum) biodiesel plants in the USA and the sale of biodiesel plants or technology to prospective customers of Energea in the NAFTA Zone. Upon completion of the feasibility studies, the Subsidiary will finalise and implement a funding strategy for development.

Commenting, Mr Butcher said: "The United States market offers tremendous opportunity and we will be in a position to hit the ground running. We have acquired the rights to capitalise on what we believe is the world's best biodiesel technology which is already successfully operating in a number of locations. We are seeking to replicate the business model established with success in the Australian market."

European Expansion

ARF has also agreed to acquire a 25% equity interest in Carbon Cycle Management AG ("CCM") to establish a 105 Mega litre biodiesel plant at a Danube port in Austria, to be operational in 2007. The acquisition is subject to completion of due diligence and final Board approval.

CCM has completed a feasibility study and Project Information Memorandum for the prospective plant and a project debt package for 87% of the expected Euro 21.6 m capital cost has already been secured. The management of CCM has extensive European biodiesel production and marketing experience and the project will utilise Energea Technology.

The cash outlay required for the 25% equity investment by ARF in CCM will be funded from the placement proceeds, is modest given the scale of the operation and the projected returns are very strong.

Commenting, Mr Butcher said: "Austria has been a leader in the world biodiesel industry and our participation in this venture will give us a clear insight into the European biofuels industry. It will also provide direct access to a region with clear expansion potential and a functioning carbon trading market.

About ARF

ARF's plants utilise the proven Energea technology. Energea is a leading technology provider in Europe and has constructed the world's largest biodiesel plant in the United Kingdom. ARF's strategic alliance with Energea gives the company access to a proven technology with the potential to be a low cost producer to supply domestic and offshore markets.

Fat is the principal feedstock in biodiesel production and ARF has exclusive five vear feedstock supply agreements in South Australia and Western Australia with Gardner Smith, the market leader in the delivery and storage of fats in Australia.

As previously announced ARF has also concluded biodiesel sales agreements, domestically and internationally, for its entire production.

Commenting, Mr Butcher said: "The Company is currently seeking to expand its management depth and resources to ensure the successful facilitation of this expanded growth strategy.

For further information, please contact:

Australian Renewable Fuels Darryl Butcher Managing Director T: 08 9363 3500 E: info@arfuels.com.au

Fowlstone Communications Geoff Fowlstone T: 02 9955 9899 M: 0413 746949 geoff@fowlstone.com.au

Lindsay Muir T: 02 99559899 M:0400 320 540 E: E: lindsay@fowlstone.com.au

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