CSR Limited (CSR) today announced a $17.8 million project to significantly increase its fuel ethanol production capacity to 60 million litres per annum.

With demand for fuel ethanol continuing to increase in Australia, the project enables CSR to increase its production of the renewable fuel to meet this growth.

Currently, CSR produces up to 38 million litres of fuel ethanol and up to 22 million litres of industrial/beverage grade ethanol at its Sarina distillery each year.

CSR will now upgrade the distillery by installing a molecular sieve dehydration unit to convert all its production to 60 million litres of fuel grade ethanol. The additional production is already in strong demand by Australian oil companies for blending into fuel.

CSR will continue to service industrial and beverage customers through its additional sources of ethanol, including imports.

“This is a logical extension and important part of our strategy to further increase recurring earnings in our Sugar business and improve our renewable energy capability,” said Jerry Maycock, Managing Director of CSR.

“CSR has long experience in producing renewable fuel ethanol from molasses, a by-product of raw sugar production, and this project further enhances our ability to meet the exponential growth in the fuel ethanol market.”

The project builds on CSR’s previous successful step into the fuel market following its first major installation of fuel capability completed in 2006.

CSR is Australia’s second largest producer of ethanol and is strongly positioned to develop its market position further.

“Demand for fuel ethanol continues to grow strongly, particularly as awareness of its greenhouse gas abatement qualities increases,” said Ian Glasson CEO of CSR Sugar.

“The nature of CSR’s ethanol process means that every litre of CSR ethanol producesless than half the CO2 emissions of petrol, with no impact on food prices,” he said.

Project construction is expected to commence in November 2008 with completion scheduled by June 2009.

Note to editors:

CSR Ethanol has been producing ethanol since the early 1900s and CSR ethanol has been used for a number of years in Ethanol blended fuels.

Demand for ethanol blended fuel has increased by 500 per cent in the last 3 years with CSR now supplying over 250 petrol stations in Australia.

Over 800 petrol stations throughout Australia now supply ethanol blended fuel.

E10 is a fuel utilising a mix of 10% ethanol 90% petrol while E85 utilises 85% ethanol and 15% petrol.

According to the Federal Chamber of Automotive Industries (FCAI), most new Australian made cars are suitable for E10 fuel and the vast majority of new imported car models sold in Australia today are also compatible with E5 or E10 ethanol blended fuels.

There is significant further potential for fuel ethanol with car companies increasingly looking to develop more energy efficient models including vehicles which run on E85.