Xethanol Announces Marketing Alliance with Aventine Renewable Energy; Starts Production and Sales of Ethanol from BioFuels Facility

NEW YORK--(BUSINESS WIRE)--Aug. 9, 2005--Xethanol Corporation (OTCBB:XTHN), a bio-technology integration and ethanol production company, today announced that the company has signed a marketing agreement with Aventine Renewable Energy, Inc. for the sale of ethanol produced at the company's Xethanol BioFuels facility in Blairstown, Iowa. In connection with this agreement, BioFuels recently shipped its first 400,000 gallons of ethanol to Aventine.

Christopher d'Arnaud-Taylor, Xethanol's Chairman and Chief Executive Officer, made the announcement noting: "Aventine supplies more than 500 million gallons of the nation's growing ethanol needs as the second-largest producer and marketer of ethanol in the United States. We're pleased to sign an exclusive three year marketing agreement with Aventine for the sale at market prices of all of the ethanol produced at Blairstown."

Aventine Renewable Energy, Inc. (www.aventinerei.com) supplies ethanol from its wholly-owned plant in Pekin, Illinois, and partially-owned Nebraska Energy Plant in Aurora, Nebraska. The company has a number of business relationships and marketing alliances in the ethanol field.

About Xethanol Corporation

Xethanol Corporation (www.xethanol.com) seeks to become a leader in the emerging biomass-to-ethanol industry. Its mission is to convert biomass that is currently being abandoned or land-filled into ethanol and other valuable co-products. Xethanol's strategy is to deploy proprietary bio-technologies that will extract and ferment the sugars trapped in these biomass concentrations. Xethanol's value proposition is to produce ethanol and valuable co-products more cost-effectively than corn-based producers with plants located closer to the coastal ethanol markets. Xethanol owns an ethanol production facility at its Biomass Technology Center in Hopkinton, Iowa for processing fermentable sugars derived from food biomass as its primary feedstock. Xethanol recently acquired and re-opened a six-million-gallon-per-year plant in Blairstown near Cedar Rapids, Iowa.

The information contained in this news release, other than historical information, consists of forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Such statements regarding the timing of acquiring and developing news properties, of bringing them on line and of deriving revenues and profits from them, as well as the effects of those revenues and profits on the company's margins, debt service and financial position, are uncertain because many of the factors affecting the timing of those items are beyond the company's control. These and other factors are discussed in the company's filings with the U.S. Securities & Exchange Commission, including its recent filings on Form 8-K.