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Oberon Fuels Project with Volvo Trucks and Safeway Receives Grant from San Joaquin Valley Air Pollution Control District for Production of First North American Fuel-grade DME

Companies partnering to test heavy-duty commercial vehicles powered by clean-burning dimethyl ether produced from biomass –SAN DIEGO – June 6, 2013 – Oberon Fuels, the first company to bring dimethyl ether (DME), a clean burning diesel alternative to market, has received a $500,000 grant from the San Joaquin Valley Air Pollution Control District (SJVAPCD) to produce fuel-grade DME at its facilities in California. Working with its partners, Volvo Trucks in North America and Safeway, Inc., one of the largest food and drug retailers in North America, Oberon Fuels will provide DME produced from biogas for Safeway’s trucking operations.

The approved project focuses on using DME as a near-zero emission solution for heavy-duty trucking. Oberon Fuels has developed a patented, skid-mounted, modular design for DME production. This small-scale process enables the development of regional fuel markets that can service local customers engaged in regional haul, initially bypassing the need for a national infrastructure. For the grant collaboration, Oberon plans to produce DME from renewable feedstocks such as animal, food, and agricultural waste, preventing methane from being released into the atmosphere and converting the waste to a usable, clean-burning fuel.

This is an important project for the San Joaquin Valley region because air quality has been a continuing challenge in the area, according to Seyed Sahedrin, executive director of the SVJAPCD. “We are interested in supporting new technologies that improve air quality and are economically advantageous at the same time,” says Sahedrin. “The DME project being conducted by Oberon Fuels with Volvo and Safeway could have lasting results for the region, both environmentally and in producing new jobs, so providing some of the funds for it is a good idea.”

DME will be used in two heavy-duty Volvo trucks driven by Safeway. The trucks will be piloted from their Tracy, Calif. distribution center located in the San Joaquin Valley. With 1641 stores across North America and a substantial trucking fleet, Safeway, a Pleasanton, Calif.-based corporation, is committed to environmental sustainability. Safeway currently operates Volvo trucks in its fleet but has not previously tested DME.

Jonathan Mayes, senior vice president of government relations, public affairs, sustainability and philanthropy for Safeway, says, “Our company continues to look for innovative ways to reduce our carbon footprint. Converting to

a cleaner-burning, renewable fuel such as DME presents a good opportunity. We are pleased to be working with Oberon Fuels and Volvo Trucks on this first-of-its-kind trial in North America.”

Two DME-powered Volvo VNL models equipped with Volvo D13 engines will run in the demonstration using Oberon-produced DME. Volvo is the first North American OEM to announce plans to introduce DME-powered vehicles in this region, beginning in 2015. Volvo leads DME engine development in Europe and has conducted extensive analyses to evaluate the spectrum of energy options including various liquid, gaseous, and biomass- sourced fuels. Through this thorough evaluation, DME emerged as the lead candidate based on cetane level, chemical structure (absence of carbon-carbon bond leads to zero particulate matter), and potential to meet more stringent emissions guidelines in the near future.

Göran Nyberg, president of Volvo Trucks North American Sales and Marketing, says, “We believe DME has great potential in the North American market – and when produced from biomass, it can provide a 95 percent reduction in CO2 compared to diesel. Our work with Oberon Fuels and Safeway will help us further validate the fuel’s promise.”

CEO of Oberon Fuels Neil Senturia agrees. “DME produces no soot and low NOx emissions, readily meeting strict EPA and California emissions standards. It will reduce the environmental hazards of organic waste and causes no contamination if spilled. Oberon’s production methods allow for regional production with economic advantages; capital expenditure runs in sync with need and market growth. With huge reserves of domestic shale gas, efficient conversion of these resources to DME will enable greater energy independence and security for the U.S. We are very happy to be the first company bringing this fuel to North America.”

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