10/21/2004 ALAMOSA, Colo. USA -- Blue Sun Biodiesel(R) announces thenation's first high-volume commercial biodiesel blending terminal andintegrated biodiesel processing plant. High-performance biodiesel blendswill be available from the terminal beginning this November.

USDA officials will announce the agency's $500,000 grant award to Blue Sunfor the construction of the production plant at a grand opening event inAlamosa October 21. The production plant is scheduled for completion inMay 2005.

The new Blue Sun Biodiesel processor and terminal increases availabilityand reduces the cost of high-performance biodiesel fuel made from virginvegetable oil. To date, quality concerns have slowed acceptance ofbiodiesel blends such as B20, an EPA-approved alternative fuel consistingof 20% biodiesel and 80% diesel. These concerns have been a result ofinconsistent product quality and blending procedures in the industry thathave previously led to hesitancy on the part of diesel enginemanufactures, automakers, and fleet managers. The new Blue Sun terminaland production facility will provide ample supplies of the Blue SunBiodiesel fuel to the rapidly growing U.S. market.

Gigi Dennis, Colorado state director for USDA Rural Development, said,"Blue Sun's processing facility and distribution terminal arecritical-path developments in the ongoing national effort to increaseagricultural income and reduce America's dependence on foreign oil." BlueSun is the first Colorado company to receive the USDA's prestigiousRenewable Energy Systems grant. The production facility and blendingterminal both will be computer-automated and will use the most advancedblending technology available to create Blue Sun B20. Strategicallylocated in Alamosa on the Great Western Railway, the blending terminalwill improve accessibility to Blue Sun B20 for fuel distributors and theircustomers throughout the U.S. Blue Sun B20 increases horsepower and fuelmileage, while reducing emissions, engine wear and maintenance costs.

Blue Sun President and CEO Jeff Probst said, "By co-locating thesecritical biodiesel components with crop production in the San Luis Valley,Blue Sun Biodiesel can provide high-quality and cost-competitive fuel toour customers throughout the country." The San Luis Valley of Colorado isideal for canola crop production and area farmers will supply theprocessing facility. According to Dan Mortensen, President of Alta Fuelsin Alamosa, "Blue Sun's operation helps distributors overcome theobstacles that currently limit the growth of the biodiesel industry."