ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Capital/Financing Update 2014

May 15, 2014

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Government funding contribution to Latrobe Valley’s developments welcomed by ECT

Friday 16 May 2014: Today’s announcement by Victorian Minister for Energy and Resources, Russell Northe, to contribute $50M in funding to the development of coal technologies in the Latrobe Valley is a much needed capital injection to the future of Victoria’s brown coal resources.

As our shareholder’s are aware, ECT participated in the Advanced Lignite Demonstration Program (ALDP) grant application process, but was unsuccessful in attracting funding. This was announced in January this year.

Subsequently, the company pushed ahead with its commercialisation plans for Coldry, our patented brown coal de-watering process, through our India market strategy developed with YES Bank and Greenard Willing India.

Chairman Glenn Fozard commented in response to todays ALDP announcement, “While not receiving a Government grant for what we believe was the best developed, lowest-risk new technology competing in the program was disappointing at the time, from an engineering perspective it is this level of readiness that has accelerated our commercialisation program in India well beyond expected timeframes had we received a grant offer.”

Since December 2013, ECT has delivered the following Coldry development outcomes for shareholders:

• Reduction in construction costs by up to 65%

• Options to improve pellet friability at an incremental cost less than the improved export margin, providing for increased durability during transport

• Potential for the further development of Coldry via an integrated power plus pre-drying solution through collaboration with EPC partners

• Plans in place for global construction capability

In addition, work continues on the previously announced Feasibility Study for the Coldry Demonstration Project at Neyveli Lignite Corporation (NLC).

ALDP Feedback on Coldry

In feedback sessions with Government the following comments were put forward to the company:

• Coldry was seen as vastly superior in many aspects, especially in the areas of environmental footprint and energy efficiency

• The Coldry process appeared to be the most efficient drying method reviewed

• The lack of port and rail infrastructure hampered our proposed commercial model post successful demonstration

These comments support our view that Coldry has a future in Victoria under the right deployment opportunities.

Strategic Impact

In relation to the impact on ECT of not receiving an ALDP grant, Mr. Fozard commented, “The fact we didn’t receive a grant focused us on the demonstration opportunity in India, which when coupled with the advanced stage of Coldry engineering development, will likely see the demonstration project built well within the expected timeframes envisaged under an ALDP project anyway. In short, the company is positioned to achieve the very same demonstration objectives for shareholders at significantly less cost, and possibly in shorter time, than had we received the grant.”

Level 7, 530 Little Collins Street, Melbourne Vic, 3000 Australia | Phone +613 9909 7684 | www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ESI)

Mr Fozard noted further, “Upon reflection, this is an efficient Government at work, where those projects that are sufficiently advanced and can be financed by the private sector are rejected for taxpayer subsidy and those projects that require supplementary financing due to the heightened technology risks are supported by the Government.”

Victorian Market Strategy – leveraging frugal innovation in India

Drying high moisture, low rank coal is easy. Drying it cost effectively and energy efficiently is more difficult.

Coldry is a Victorian invention targeted at delivering a zero-direct emission, low-cost drying solution capable of replacing traditional briquetting and producing a black coal equivalent (BCE) product .

Successfully achieved, the Coldry process would act as an ideal ‘gateway’ for further higher-value upgrading processes, such as coal to oil or gas, in the Latrobe Valley.

Over the next few weeks, ECT will commence feasibility planning for a Coldry plant in both the Latrobe Valley and Maddingley Mine, north west of Melbourne.

Managing Director, Ashley Moore commented, “This indirect pathway of deployment back to Australia has only been made possible by the construction savings achieved out of India. In addition, we have forged strong alliances with companies featuring significant engineering capability. This capability will undoubtedly enhance Coldry and accelerate the delivery of Matmor. For this we have to also thank YES Bank and Greenard Willing for developing the Indian strategy along with strong ongoing support by Austrade and other Government departments.”

Briquette Plant Replacement being considered

Given significant projected capital cost savings coming out of our India activities, we believe there is great potential to deliver a zero direct-emission replacement to the current briquette factory here in Victoria’s Latrobe Valley.

This would naturally be well received by industry considering the reduced emissions associated to the production of BCE when compared with the briquette manufacturing process, whilst also improving the diversity of energy sources available to industry for a wide range of applications.

Finally, Ashley Moore stated “The prospects of delivering a fully optimised and validated plant into the Latrobe Valley at potentially half the price of a plant considered under the ALDP project, opens up the opportunity for other complimentary, downstream technology applications to enter the Latrobe Valley.”

For further information contact: Ashley Moore – Managing Director - info@ectltd.com.au

About ECT

ECT is in the business of commercialising leading-edge coal and iron making technologies, which are capable of delivering financial and environmental benefits.

We are focused on advancing a portfolio of technologies, which have significant market potential globally.

ECT’s business plan is to pragmatically commercialise these technologies and secure sustainable, profitable income streams through licencing and other commercial mechanisms.

About Coldry

When applied to lignite and some sub-bituminous coals, the relatively simple Coldry beneficiation process produces a black coal equivalent (BCE) in the form of pellets. Coldry pellets have equal or superior energy value to many black coals and produce lower CO2 emissions than raw lignite.

About MATMOR

The MATMOR process has the potential to revolutionise primary iron making.

MATMOR is a simple, low cost, low emission, production technology, utilising the patented MATMOR retort, which enables the use of cheaper feedstocks to produce primary iron.