Lignol and Pacific Ethanol to Assess Feasibility of Combining Corn Ethanol
Plants with Next Generation Cellulosic Ethanol Biorefineries.

VANCOUVER, May 25 /CNW/ - Lignol Energy Corporation (TSX-V: LEC) ("Lignol" or "the Company"), a leading technology company in the cellulosic ethanol and biorefining sector, today announced the signing of a Memorandum of Understanding ("MOU") between its wholly owned subsidiary, Lignol Innovations Inc. and Pacific Ethanol, Inc. (NASDAQ CM: PEIX) ("Pacific Ethanol"), the leading West Coast marketer and producer of ethanol, to evaluate the benefits of integrating Lignol's proprietary second generation biorefinery technology with Pacific Ethanol's existing corn ethanol facilities.

Pacific Ethanol seeks to reduce the carbon intensity of the ethanol it produces by integrating cellulose ethanol into existing operations. Pacific Ethanol's production locations are ideally located for the deployment of Lignol's biorefineries due to the abundance of woody biomass on the West Coast and regulations to improve the greenhouse gas profile of ethanol produced and marketed in California.

By deploying Lignol's proprietary technology within these established operations the companies believe there will be significant capital and operating cost advantages, from leveraging existing infrastructure, logistics, staffing and partnerships. Lignol expects the benefits of co-hosting could also significantly improve the timelines for the start-up of biorefinery operations and further assist Lignol in meeting its objective of being a low cost producer of cellulosic ethanol.

Lignol continues to evaluate unique ways to deploy its technology in order to drive the cost of cellulosic ethanol lower and exploit its technology platform. The integration of cellulosic ethanol into existing corn ethanol plants is one such opportunity. Lignol is also evaluating the feasibility of exploiting the unique attributes of its technology within the pulp and paper sector. Lignol's fractionation technology produces clean substrates that are ideal inputs for the cellulosic ethanol, pulp and paper and green chemical industries and the Company reports that it is having early stage discussions with potential partners in Canada to deploy a version of its technology to address these opportunities.

"By integrating cellulose ethanol production into existing operations, we can lower our carbon footprint, diversify our feedstock, and meet the future demand for advanced biofuels as required by the Federal Renewable Fuel Standard. Our work with Lignol will help advance their technology and take us nearer to our goal of producing and marketing ethanol from a variety of feedstocks," said Neil Koehler, Pacific Ethanol's CEO.

"Working with Pacific Ethanol on the West Coast is a natural fit for Lignol," said Lignol's President and CEO, Ross MacLachlan. "They have established themselves as a major force in the region and we are excited to be working with them to enhance their economic and long term plans to integrate cellulose ethanol into existing production. Pacific Ethanol's assets are first class and each of their locations appears to offer tremendous synergies for our technology deployment."

About Lignol

Lignol (TSX-V: LEC) is a Canadian company undertaking the development of biorefining technologies for the production of fuel-grade ethanol and other biochemical co-products from non-food cellulosic biomass feedstocks. Lignol's modified solvent-based pre-treatment technology facilitates the rapid, high-yield conversion of cellulose to ethanol and the production of value-added biochemical co-products, including high purity HP-L(TM) lignins. HP-L(TM) lignin represents a new class of high purity lignin extractives (and their subsequent derivatives) which can be engineered to meet the chemical properties and functional requirements of a range of industrial applications that until now has not been possible with traditional lignin by-products generated from other processes. Lignol is executing on its development plan through strategic partnerships to further develop and integrate its core technologies on a commercial scale. Lignol also intends to invest in, or otherwise obtain, equity interests in energy related projects which have synergies with its biorefining technology. For more information about Lignol, please visit our website at www.lignol.ca.

About Pacific Ethanol

Pacific Ethanol, Inc. (NASDAQ CM: PEIX), is the leading West Coast-based marketer and producer of ethanol. Central to Pacific Ethanol's growth strategy is its destination business model, whereby ethanol plants achieve lower process and transportation costs by servicing local markets for both fuel and feed. Pacific Ethanol is working to identify and develop other renewable fuel technologies, such as cellulose-based ethanol production.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution concerning forward-looking statements:

Certain statements contained in this document may constitute forward-looking information within the meaning of applicable securities laws. Such forward-looking statements or information include, without limitation, statements or information about our ability to fund our Baseline Operations, (using the definition of "Baseline Operations" as set out in Lignol's Management's Discussion & Analysis of Financial Condition and Results of Operations for the three and nine-month periods ended January 31, 2010), the development status of our fully integrated biorefinery pilot plant in Burnaby, British Columbia, the planning and development of our previously proposed cellulosic ethanol commercial demonstration plant, the ability to integrate our biorefineries with existing corn based ethanol facilities, our ability to exploit commercial opportunities and broaden our market opportunities for a range of cellulosic derivatives and environmentally sustainable biochemicals and our ability to pursue these opportunities with strategic partners. Often, but not always, forward-looking statements or information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements or information reflect Lignol's current views with respect to future events and are subject to certain risks, uncertainties and assumptions including, without limitation, our ability to establish the validity of our technology at the fully integrated biorefinery pilot plant scale, our ability to satisfy the conditions of existing government grants and to obtain new additional grants, our ability to finance and complete the development of the commercial demonstration plant, our ability to develop our products, our ability to obtain requisite regulatory approvals and our ability to enter into agreements with strategic partners on terms acceptable to us. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Many factors could cause Lignol's actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements or information, including among other things, the technological challenges that remain to be surpassed in obtaining the necessary operating data from our fully integrated biorefinery pilot plant that is required prior to completing the next design scale-up of the technology, the complexity of the development of the commercial demonstration plant, financial market conditions which will effect Lignol's ability to finance its operations, risks relating to the protection of Lignol's core technology from infringement and those risk factors which are discussed elsewhere in documents that Lignol files from time to time with securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Except as required by law, the Company expressly disclaims any intention or obligation to update or revise any forward looking statements and information whether as a result of new information, future events or otherwise. All written and oral forward-looking statements and information attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements.

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For further information: Lignol Energy Corporation, Paul Hughes, Vice President - Corporate Development & Communications, Tel: [phone], Email: [email protected]; The Equicom Group, James Smith, Investor Relations, Tel: [phone] ext. 229, Email: [email protected]