ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2007

Jan 15, 2007

ENVIRONMENTAL Clean Technologies LTD

ABN 28 009 120 405

16 January 2007

Company Announcements Office Australian Stock Exchange Limited

Dear Sir /Madam

By e-Lodgement 2 pages

Market Update

The executive of Environmental Clean Technologies Limited has recently undertaken a strategic review to determine the optimum pathways to commercialisation of the Coldry and Matmor technologies. As a result, management believes it is important to update the market of these commercial developments in the lead up to demonstration of commercial production at the pilot plant.

• 1. Discussions are progressing on a licensing and JV arrangements for the Australian region. Similarly discussions are in progress with strategic partners for the identified Asian markets.
• 1. Work on the upgraded Coldry clean coal pilot plant is progressing and most of the equipment has been delivered by suppliers. The induction furnace for the Matmor steel test plant has arrived in Melbourne and is being prepared for installation. Once the plants are operational again in April a number of interested parties that have been introduced through Aust Industry and other sources, will be invited to inspect the facility.

The operational pilot plant will also enable a range of products to be tested, supporting commercialisation.

• 1. MECRUS Pty Ltd are being engaged by ECT to manage the Coldry clean coal pilot plant upgrade project, operation and asset management functions under a performance based arrangement. This engagement will deliver a clearer transition path to operation of the facility. MECRUS have extensive experience in operations and maintenance in brown coal power generation, water and waste industries. Through their experience accessed via this relationship MECRUS will bring synergies to the ECT business.
• 1. The Coldry pellets produced at the pilot plant are anticipated to be supplied to Hazelwood Power Station. subject to concluding commercial arrangements for a formal off-take agreement.
• 1. Preparation of a revised business plan and review of funding options is being undertaken in anticipation of finalising arrangements with counterparties on commercialisation of the technologies.

To satisfy the credit requirements of any future funding solutions, the management will be seeking to enlist the services of a world leading specialist in clean coal technology valuation, targeting a bankable valuation of their Coldry clean coal. Matmor steel and Enersludge technology. Similar to what has recently been undertaken by other clean coal technology companies.

1. The submissions have been lodged with the Victorian Government, facilitating the first two payments under the Sustainability Fund \$238,000 grant. This will help to position ECT's Coldry clean coal technology in an emerging market.

ENVIRONMENTAL Clean Technologies LTD

ABN 28 009 120 405

It is anticipated that 1 tonne of deminerialised water will be recovered for each 2 tonne of brown coal processed, and there are potential markets in the power generation, coal to liquids and chemical manufacturing sectors.

The board and management expects that the next 3-6 months will see significant commercial developments for ECT and regular market updates will keep shareholders informed of the latest news during this exciting period for the company.

Ends. For further information, please contact:

MR DANNY MILLS CEO