THORNEY TECHNOLOGIES LTD — Capital/Financing Update 2007

Jan 21, 2007

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AUSTRALIAN RENEWABLE FUELS LUMTED

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 MEER www.arbiels.com.au

Monday 22 January 2007

ASX Release

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

Dear Sir/Madam,

Australian Renewable Fuels Limited ("ARF") achieves biodiesel production & sales in line with November forecast

Australian Renewable Fuels Limited (ASX code: ARW) is pleased to announce that it has substantially achieved production and sales targets for the December quarter.

The result was underpinned by continued ramp up of production volumes at the Company's production plants at Largs Bay in South Australia and at Picton in Western Australia.

Total production for the quarter was 2.67 million litres, with sales of 2.7 million litres. The ramp up of volumes towards the end of the quarter saw sales of biodiesel from Largs Bay in December of 1.6 million litres.

Production and sales in the March quarter are projected to show further improvement.

ARF Australia CEO, John Lillywhite, said the December quarter result confirmed the Company's ability to reliably produce and deliver commercial volumes of biodiesel.

"This also positions the Company well to secure the balance of \$5.4 million of a \$7.2 million Federal Government Biofuels Capital Grant," said Mr Lillywhite.

"Production and sales to 31 December are also in line with the forecasts referred to in the Company's announcement of 27 November 2006.

Largs Bay Highlights

• To the end of November 2006, total sales of biodiesel from Largs Bay was 2.4 million $\bullet$ litres.
• December 2006 sales from Largs Bay of 1.6 million litres. $\bullet$
• Sales during January 2007 from Largs Bay are expected to exceed 1 million litres. $\bullet$ Volumes continue to ramp up to the levels contained in sales contracts.

Total production of biodiesel from the Largs Bay plant to the end of December amounted to 5.7 million litres.

Picton Highlights

• Commenced production using a 50/50 tallow canola blend at Picton in December 2006.
• Production of biodiesel at Picton to 31 December 2006 totalled 1.6 million litres.
• Sales of biodiesel from Picton to 31 December 2006 total 0.2 million litres. $\bullet$
• January 2007 sales of biodiesel from Picton are expected to be 1.48 million litres. $\bullet$ including two 'once off' sales from inventory.
• Volumes continue to ramp up to meet increasing purchase orders.
• Negotiations for long term sales contracts are well advanced. $\bullet$

Other Developments

Australian Renewable Fuels expects to reach production levels during January/February 2007 that enable the Federal Government to pay the Company the remaining \$5.4m of the total \$7.2m of a committed Biofuels Capital Grant.

A key factor in achieving these production levels over 30 consecutive days is achieving sales and liftings that are consistent with production so that inventory levels can be managed within the Company's existing storage facilities.

Having demonstrated the ability of its plant and operating processes to reliably deliver commercial volumes of biodiesel, ARF is putting a fresh focus on increasing its sales and marketing activities.

Monthly sales volumes are expected to be:

	Feb	Mar
	(millions of litres)
From Largs Bay	1.7	2.3
From Picton	0.25	0.85

The sales margins to be achieved on sales agreements are closely tied to the terminal gate price for diesel. A significant component of the terminal gate price is the price of crude oil.

Mr Lillywhite said that since his commencement as Australian CEO of ARF earlier this month. he had placed an immediate operational focus on achieving commercial production and sales volumes from both the Largs Bay and Picton plants.

"With the substantial volume ramp up in November and December, our unswerving focus is on ensuring the Company's future success.

Mr Lillywhite said he was undertaking a detailed review of the Company's business strategy with a view to ensuring the Company had the necessary platform to support profitable growth into the future.

Areas of review include capital expenditure programs, risk management, management structure, customer requirements and product specifications.

Mr Lillywhite said the review would be completed in March quarter.

North America

During the last quarter of calendar 2006, the Company completed its financial obligations in securing the Patent Rights to the Energea Technology for the United States. The final instalment of US\$3m was funded by way of Shareholder Loans to the Company.

For further information, please contact:

Australian Renewable Fuels Limited John E Lillywhite CEO - Australia T: 08 9363 3500 E: info@arfuels.com.au