First Quarter 2009 Highlights:

Gross profit totaled $356,332.

Adjusted EBITDA was $194,118.

Operating loss was $159,038.

First Quarter 2009 Results:

The decline in revenue was driven by lower sales volume and lower sales prices primarily for specialty chemical products, due to the decline in demand caused by the global economic slowdown. In addition, the sharp decline in crude oil price during the second half of 2008 has negatively affected selling prices of biodiesel in China. Compared to the first quarter of 2008 and fourth quarter of 2008, the selling price of biodiesel decreased by about 29% and 19%, respectively.

Gross profit in the first quarter of 2009 was $356,332, down 65.8% from the first quarter of 2008. Gross margin was 12.7% in the first quarter of 2009, down from 23.3% during the same period in 2008 driven by lower selling prices and higher manufacturing overhead costs.

Operating expense in the first quarter of 2009 was $515,370 representing a 29.6% decrease from $731,550 in the first quarter of 2008, driven by lower stock-based compensation expenses and decrease in selling expenses related to specialty chemical product exports. In the first quarter of 2009 the company recorded an operating loss of $159,038 compared to an operating profit of $311,686 in the comparable period of 2008.

Adjusted EBITDA for the first quarter 2009 was $194,118 compared to $725,429 in the comparable period of 2008.

Financial Condition:

As of March 31, 2009, China Clean Energy had $2.5 million in total cash, approximately $3.4 million in working capital, and no debt. Stockholders’ equity at March 31, 2009 stood at $31.5 million.

Recent Events:

On April 21, 2009 the company announced that its wholly-owned subsidiary, Fujian Zhongde Technology Co., Ltd., secured a credit line for up to RMB21 million (equivalent to around $3.1 million) from Fuzhou City Commercial Bank.

On May 6, 2009 the company announced that the construction of its Jiangyin plant is now expected to be completed in September 2009, representing a three month delay from the company’s previous estimate. The delay in the plant’s construction has been due to the rainy season, as well as to delays resulting from a construction accident suffered by one of the company’s contractors. This accident has caused no other impact on the company.