CUPERTINO, Calif. – April 22, 2009 – AE Biofuels, Inc., (OTCBB: AEBF), a global vertically integrated biofuels company, today announced that it has signed a strategic agreement with Pearson Fuels to supply cellulosic ethanol to the renewable fuels filling stations developed by Pearson Fuels across the state of California. Pearson Fuels built the first E85 fuel station in California six years ago and has expanded statewide.

Under the terms of the agreement, AE Biofuels will supply Pearson Fuels with cellulosic ethanol and other biofuels for distribution through renewable fuels filling stations in California. AE Biofuels and Pearson Fuels will also utilize available government programs to develop additional renewable fuels filling stations in the state. Under the Renewable Fuels Standard (RFS) of the Energy Independence and Security Act of 2007, 100 million gallons of cellulosic ethanol use is mandated in 2010, increasing to 1 billion gallons per year by 2013.

The combination of AE Biofuels’ industry-leading cellulosic technology and Pearson Fuels’ leading position as a builder of renewable fuels filling stations in California will bring to the market a solution that is commercially viable and cost-effective in supplying cellulosic ethanol to E85 stations throughout the state.

“Ethanol from non-food sources will expand rapidly as new mandates take effect in the next year. We are pleased to be working with Pearson Fuels to supply E85 stations throughout California with next generation, clean, renewable fuel,” said Eric McAfee, chairman and CEO of AE Biofuels.

“AE Biofuels will bring advanced biofuels to both our existing stations and the many we have under development,” said Mike Lewis, owner and general manager of Pearson Fuels. “We have been saying for years that cellulosic ethanol will be the next big step for the biofuels industry, and this agreement will go a long way to make that goal a reality.”

About AE Biofuels
AE Biofuels, Inc. is a global vertically integrated biofuels company based in Cupertino, California, developing sustainable solutions to address the world’s renewable energy needs. The company is commercializing its patent-pending next-generation cellulosic ethanol technology that enables the production of biofuels from both non-food and traditional feedstocks. Its Universal Biofuels subsidiary built and operates a name plate 50 million gallon per year biodiesel production facility on the east coast of India. For additional information about AE Biofuels, please visit www.aebiofuels.com.

About Pearson Fuels
Pearson Fuels specializes in bringing alternative fuels to the public. With their first project in San Diego, Pearson built a fuel station offering 10 vehicle fuels. It included the first Ethanol station for the state of California and the first Biodiesel, dual pressure natural gas, and propane station in San Diego County. In 2007, Pearson’s cutting edge approach to alternative fuels enabled them to make an unprecedented agreement with the California Air Resources Board to develop Ethanol (E-85) fueling infrastructure throughout the state. Pearson currently has locations in San Diego, Sacramento, Hayward, Concord and Salton City with more under construction or scheduled for completion by this summer in San Jose, Pomona, and Beaumont. For additional information about Pearson Fuels, please visit www.pearsonfuels.com.