Nova Biosource Fuels Provides Operational Update

Nova Biosource Fuels, Inc. (Amex: NBF), a refiner and marketer of ASTM quality biodiesel, reported that its flagship refinery in Seneca, Illinois, surpassed 17 million gallons of ASTM D6751 quality biodiesel production to date. The refinery is currently operating between 50 percent to 70 percent nameplate capacity.

The economic environment remains volatile, with unprecedented swings in commodity and crude oil pricing and demand contributing to the instability. The process of carefully managing feedstock procurement with corresponding forward biodiesel sales agreements is essential. Nova continues to operate with a methodical approach to margin protection while focusing on servicing its debt responsibilities and producing high quality biodiesel.

"Our objective at Seneca is to operate at consistent and steady production rates while paying close attention to quality and inventory management to optimize margin protection," said Kenneth Hern, Chairman and CEO of Nova. "As we navigate through this volatile economic environment, our level of commitment to improving shareholder value has not wavered. Efficient operations and conservation of working capital are key, and our industrious personnel are conducting conscientious operations to meet overall company goals."

On December 30, 2008, Nova and its Seneca project lender, WestLB AG, agreed to amend the credit agreement to extend the deadline for converting the construction loan facility to a term loan facility from December 31, 2008 to January 30, 2009. Before the construction loan facility can be converted into a term loan, the Seneca refinery must complete a final performance test in accordance with agreed specifications and meet other conditions precedent, including the funding of certain project accounts. The execution of the performance test will require sufficient working capital to procure feedstock to conduct the tests. The interest payment and principal amortization schedules will continue unchanged notwithstanding the extension of the construction loan facility.

Additionally, Nova announced that it has completed repairs to its biodiesel refinery in Clinton County, Iowa. Nova's goal is to solidify a production plan to restart the refinery in mid-to-late January 2009. As part of the ongoing work, a review of the fire protection systems and procedures has been conducted to ensure proper functioning.

"The repairs to the damaged equipment are now completed at a cost of less than $100,000," said Kenneth Hern, Chairman and CEO of Nova. "We are optimistic that the refinery will be functioning and ready to re-establish operations during early 2009. We want to extend our appreciation to our engineering and construction staff, who efficiently and effectively repaired the damaged equipment, returning the refinery to a production-ready status."

About Nova Biosource Fuels, Inc.

Nova Biosource Fuels, Inc. is an energy company that refines and markets ASTM standard biodiesel and related co-products through the deployment of its proprietary, patented process technology, which enables the use of a broader range of lower cost feedstocks. Nova is focused on building and operating a number of Nova-owned biodiesel refineries, with a goal of attaining production capacity of between 200 to 220 million gallons of biodiesel fuel on an annual basis. Nova's business strategy for the next three years includes building up to seven biodiesel refineries with production capacities ranging from 20 to 100 million gallons each per year. More information on Nova Biosource Fuels can be found at www.novabiosource.com.