GREENHUNTER ENERGY SUBSIDIARY EXECUTES
FIRST BIODIESEL TOLLING AGREEMENT

GRAPEVINE, TEXAS, MAY 28, 2008 - GreenHunter BioFuels, Inc., a wholly-owned subsidiary of GreenHunter Energy, Inc. (AMEX:  GRH), announced today the closing of a two-year biodiesel toll processing agreement with a third party specifically related to the Company’s new biodiesel refinery located at the GreenHunter Renewable Fuels Campus in Houston, Texas.

GreenHunter BioFuels has entered into a two-year biodiesel toll processing agreement with this entity for up to 25% of GreenHunter’s 105 million gallon-per-year biodiesel production capacity.  Under the agreement, GreenHunter BioFuels, Inc. will receive feedstocks and will produce for delivery B99, or 99% biodiesel, under the cost-plus arrangement.  Additionally, as a condition of the agreement, GreenHunter BioFuels will receive and retain all byproducts of biodiesel production at no cost.  Arrival of the first shipments of animal fats via railroad to the refinery and storage facilities located in Houston occurred this week and will be processed under this new tolling arrangement beginning in June.

Construction at GreenHunter BioFuels Renewable Fuels Campus is substantially complete and the facility is now in commissioning.  The four assets on the Company’s state-of-the-art Renewable Fuels Campus include a 105 million gallon per year biodiesel refinery, a 700,000 barrel bulk liquid terminal operation, and a 200 million pound per year glycerin refinery with commercial operations scheduled to begin in June, 2008.

Commenting on the Company’s first biodiesel tolling agreement, Mr. Michael K. Studer, President and Chief Operating Officer, stated, “This initial agreement validates our business strategy of building maximum flexibility into our asset base.  Our predominant focus is ultimate shareholder return, and as such, we have demonstrated through this biodiesel toll processing agreement that we can operate our assets profitably even in times of extreme commodity pricing variability. A significant majority of other biodiesel producers are presently reducing operations or ceasing to operate entirely due to unprecedented feedstock costs from vegetable oils.  We are currently evaluating additional tolling opportunities similar to this recently closed agreement and will continue to move forward with our business strategy in this most challenging environment.”

GreenHunter Energy is focused on the renewable energy sectors of wind, hydro, geothermal, solar, biofuels, and biomass power plants. Our assets consist of leases of real property for future development of wind energy projects located in Montana, New Mexico and California, a former waste oil and chemical refinery currently being converted to the nation’s largest biodiesel refinery located in Houston, Texas, and a biomass power plant located in El Centro, California. Headquartered in Grapevine, Texas, GreenHunter Energy was formed to be the first publicly traded renewable energy company based in the U.S. that provides to investors a portfolio of diversified assets in the alternative energy sector. Additional information about GreenHunter Energy may be found at www.greenhunterenergy.com.

Forward-Looking Statements
Any statements in this press release about future expectations and prospects for GreenHunter Energy and its business and other statements containing the words “believes”, “anticipates”, “plans”, “expects”, “will” and similar expressions constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including the substantial capital expenditures required to fund its operations, the ability of the Company to implement its business plan, government regulation and competition. GreenHunter Energy undertakes no obligation to update these forward-looking statements in the future.

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For Further Information Contact:
GreenHunter Energy, Inc.
Jack W. Zedlitz
1048 Texan Trail
Grapevine, TX 76051
Tel: (972) 410-1044