ENVIRONMENTAL CLEAN TECHNOLOGIES LIMITED. — Investor Presentation 2019

May 12, 2019

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ECT Chairman attends JOGMEC seminar on hydrogen from Latrobe Valley brown coal

13 May 2019: Environmental Clean Technologies Limited (ASX: ECT) (ECT or Company) is pleased to announce it had the honour of being invited to the Japan Petroleum, Natural Gas and Metals Mineral Resources Organisation (JOGMEC) as part of a Victorian government event in Tokyo on Friday 10 May 2019.

Key points:

• ECT attends alongside Victorian government and Latrobe Shire representatives

• Hydrogen industry focus

• Coldry and COHgen technologies of greatest interest

Japan is investing heavily in hydrogen, viewing the element as central to its future energy security.

ECT presented a compelling overview of its technologies (attached), highlighting the fundamental importance of efficient, cost-effective drying as the ‘gateway’ enabler of higher-value, low or zero emission applications for Victoria’s vast, world-class lignite reserves.

The event, focused on coal-to-hydrogen, was hosted by Atsushi Ikeda, General Manager, JOGMEC Metals & Coal Business Support Division, who introduced the following presenters:

• Ms Jane Burton, Acting Executive Director, Earth Resources Policy and Programs, Department of Jobs, Precincts and Regions, Victorian Government

• Mr Ian Filby, Project Director, The CarbonNet Project, Department of Jobs, Precincts and Regions

• Mr Roland Davies, Chair, Energy Resources Working Group, Gippsland Regional Partnership

• Darren Howe, Deputy Mayor, Latrobe City Council

ECT’s Chairman, Mr Glenn Fozard was the only Australian project proponent in attendance as Mr Roland Davies outlined the Latrobe Valley’s advanced lignite upgrading and conversion project pipeline.

Specifically, ECT’s Coldry technology was profiled as a cost-effective, zero-CO2 drying process that could harness waste heat from, in the case of hydrogen, a gasification plant. Drying lignite prior to gasification is essential.

In addition, the Company provided an overview of its catalytic organic hydrogen generation process (COHgen), an emerging technology aimed at the lower cost, lower emission generation of hydrogen from lignite.

Mr Fozard, who himself went to school in Japan when he was 17, conveyed the technical and commercial fit of ECT’s suite of technologies with Japan’s coal-to-hydrogen objectives.

Mr Fozard commented, “As a private sector listed company, we were honoured to be invited to what is ostensibly a Victorian government event arranged to support the ongoing engagement with Japanese business via its key industry body, JOGMEC, with the view to advancing investment in low carbon, high value applications for Victoria’s lignite resource.

388 Punt Road, South Yarra, VIC 3141 Australia | Phone +613 9849 6203| www.ectltd.com.au | ABN 28 009 120 405 Listed on the Australian Stock Exchange (ASX:ECT)

“Now that JOGMEC and Japanese corporations have met us and understand what our company can offer, we’ll be developing these relationships with a number of these Japanese companies to further discuss opportunities for our technologies.”

Mr Ian Filby, Project Director of CarbonNet outlined the critical role that Carbon Capture and Storage (CCS) will play in commercialising hydrogen produced from the Latrobe Valley’s brown coal.

Mr Fozard continued, “Whilst in its early stages of development, COHGen represents a massive potential cost saving to hydrogen producers given the nature of how we extract the hydrogen-rich syngas from the coal; keeping most of the carbon fixed by not turning that carbon gaseous.”

Hydrogen production cost, including CCS as cited by Mr Filby, is around $3.00kg. Without the requirement to capture CO2 the cost is estimated to be closer to $1.50kg. COHgen provides the hydrogen industry the opportunity to minimise CO2 emissions upfront, significantly mitigating the cost of CCS. The challenge for ECT will be to see how close it can get COHgen to zero-CO2 emissions.

The Role of Lignite in the Hydrogen Industry

The hydrogen industry is attracting bi-partisan support from the two major Australian political parties with programs in place at both State and Federal level to encourage development of what is touted as a potential AUD10 billion export market by 2030 for Australia in what may become an AUD2.5 trillion market globally by 2050.

Both ‘green’ and ‘brown’ hydrogen production routes are being explored, with Australia’s Chief Scientist, Alan Finkel coming out in support of ‘green’ hydrogen while acknowledging the need to rely on ‘brown’ hydrogen as a stepping stone due to its lower cost and shorter timeframe to commercial scale deployment.

‘Green’ hydrogen production relies on ‘spare’ wind or solar power to split water molecules via a process called electrolysis, to make it economic. However, ‘spare’ wind or solar electricity is ultimately paid for by domestic electricity consumers, essentially subsidising hydrogen production for export.

Electrolysis requires a lot of electricity, making it very expensive at large scale, hence the concept of ‘spare’ wind or solar electricity is essential to bringing that cost down because it’s energy that would otherwise go to waste if not used. Use of dedicated wind and solar energy to make hydrogen for a large export market is presently, and for the foreseeable future, uneconomic.

As an example, in 2016-17, South Australia experienced ‘spare’ wind output for 139 hours, spread across 30 days[1] , or less than 2% of the time.

Unfortunately, AUD10 billion worth of hydrogen exports would require ~93TWh of electricity, equivalent to 35,000MW of new dedicated wind capacity. The figures for solar are much worse.

For context, current installed wind capacity in Australia is ~5,600MW with a further ~5,700MW under construction or financially committed as at the end of 2018, worth ~AUD8 billion[2] .

As such ‘green’ hydrogen production cannot scale to reliably meet export production quotas while retaining the cost benefit of ‘spare’ wind and solar electricity economics.

‘Brown’ hydrogen is proposed to be produced from brown coal via a method similar to that of the currently dominant ‘steam reforming’ process which uses natural gas and water as its raw materials (accounting for

1 Source: AEMO report - SOUTH AUSTRALIAN RENEWABLE ENERGY REPORT, November 2017

2 Source: https://www.cleanenergycouncil.org.au/resources/technologies/wind

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90% of the current hydrogen market). The idea being, brown coal is a cheaper raw material than natural gas, and cheaper than electrolysis.

According to CarbonNET, presenting at the event, hydrogen production costs are expected to be as follows:

Reference		Electrolysis	Coal gasification + CCS
World Energy Outlook 2018	Current	5.60-8.40	3.15
	Best Case (2040)	4.80	3.15
CSIRO Hydrogen Roadmap August 2018	Current	4.78-5.84 (Alkaline cell)	2.57-3.14
		6.08-7.43 (PEM)
	Best Case	2.54-3.10 (Alkaline Cell)	2.14-2.74*
		2.29-2.79 (PEM)
Hydrogen in a Low Carbon Economy,	Current	5.40	4.08
UK Committee on Climate Change November 2018	Best Case (2040)	2.65-4.60	3.20-4.30

Notes:

• *from Brown Coal

• PEM – Polymer Electrolyte Membrane

• All costs in AUD/kg of hydrogen

The flagship coal-to-hydrogen project in Australia is the Japanese-led Hydrogen Energy Supply Chain (HESC) consortium, with support from the Australian Federal and Victorian State governments, which has embarked on an AUD500 million project; a world-first pilot project to safely and efficiently produce and transport clean hydrogen from Victoria’s Latrobe Valley to Japan.

HESC aims to establish an integrated commercial-scale hydrogen supply chain that encompasses production, transportation and storage, with the goal of delivering liquefied hydrogen to Japan.

According to HESC’s website, the project will be developed in two phases:

1. The pilot phase will demonstrate a fully integrated supply chain between Australia and Japan over one year by 2021.

2. The decision to proceed to a commercial phase will be made in the 2020s with operations targeted in the 2030s, depending on the successful completion of the pilot phase, regulatory approvals, social licence to operate and hydrogen demand.

ECT broadly sees an opportunity to provide its Coldry and (after further development) COHgen technologies to the hydrogen production industry, delivering innovative lignite drying and hydrogen production methods, reducing cost and CO2 intensity.

For further information, contact:

Glenn Fozard – Chairman info@ectltd.com.au

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About ECT

ECT is in the business of commercialising leading-edge energy and resource 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 licensing and other commercial mechanisms.

About Coldry

When applied to lignite and some sub-bituminous coals, the 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.

About the India R&D Project

The India project is aimed at advancing the Company’s Coldry and Matmor technologies to demonstration and pilot scale, respectively, on the path to commercial deployment.

ECT has partnered with NLC India Limited and NMDC Limited to jointly fund and execute the project.

NLC India Limited is India’s national lignite authority, largest lignite miner and largest lignite-based electricity generator.

NMDC Limited is India’s national iron ore authority.

Areas covered in this announcement:

ECT (ASX:ECT)	ECT Finance	ECT India	India Project	Aust. Project	R&D	HVTF	Business Develop.	Sales

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Capturing the chemistry of lignite without the emissions

“Bridging the gap between today’s use of resources and a zero-emissions future.”

May 2019

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Prepared for JOGMEC and Department of Economic Development, Jobs, Transport and Resources, State Government of Victoria

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Nice to meet you

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In 1991 I attended Isurugi High School in Toyama prefecture as an exchange student for 1 year.

��������������������������������� ������������������������������ Since then, I haven’t had much of a chance to use Japanese but Japanese people often say that my pronunciation is excellent although with a strong country dialect.

��������������������������������� ���������������������������������� The year I spent in Japan has been very influential on my life and I look forward to an opportunity where I can unite Australian and Japanese mutual interest through ECT’s technologies.

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Glenn Fozard ��������� Chairman ECT������� Environmental Clean Technologies Ltd.

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Best regards.

ECT | Company Presentation | May 2019ECT | Company Presentation | May 2019

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Overview

Targeting lignite for its valuable chemical constituents ���������������������

Coldry TRL 8-9 Matmor and HydroMOR TRL 6-7 1 Mechanical and chemical process of de-watering �������������������Coupled with Coldry, the process produces a composite ����������������� 3 high moisture content lignite. Coupled with access 26 3d[6] 4s[2] ��������������pellet that combines lignite and waste iron ore sources. ���������������� to low-grade waste heat, delivers a zero net Fe These pellets are fed into a vertical retort to produce a Iron ���emission solution to essential upgradation of brown 55.847 ������������������Direct Reduced Iron product suitable for the melt stage THERMAL coal for more efficient downstream usage. This is ���������������� of steel production. The process operates at IRON FUEL ECT’s “Gateway” solution. considerably lower temperatures and the use of readily & abundant, low-cost feedstocks delivers superior STEEL economic returns in comparison to conventional primary iron processes.

COHgen TRL 2-3 2 �����������������Coupled with Coldry, the process produces a �������composite pellet that combines a unique catalyst H ������������������with lignite. These pellets are fed into a vertical retort to produce a hydrogen heavy syngas, leaving ��������������� most of the carbon fixed in the pellet. Low carbon HYDROGEN emission production of hydrogen aims to eliminate Carbon Capture and Storage.

Waste-to-Energy TRL 5-6 4 Currently under HOA for the acquisition of this ������������������� technology, ECT is developing a unique and continuous ��������������� process for the low-temperature and low-pressure �������������������catalytic depolymerisation of Coldry pellets combined DIESEL ���������with other waste feedstocks like construction wood and � ������� end of life plastics to produce diesel, bitumen and �������������������� asphalt. Lignite’s chemical properties, once converted to Coldry, act as a feedstock stabiliser in the conversion of waste streams to transportation diesel. [English Translation follows] 3

ECT | Company Presentation | May 2019

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1

Overview

Targeting lignite for its valuable chemical constituents ���������������������

Coldry

TRL 8-9

Mechanical and chemical process of de-watering high moisture content lignite. Coupled with access to low-grade waste heat, delivers a zero net emission solution to essential upgradation of brown coal for more efficient downstream usage. This is THERMAL ECT’s “Gateway” solution. FUEL

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26 3d[6] 4s[2] Fe Iron 55.847

IRON & STEEL

Matmor and HydroMOR

TRL 6-7

Coupled with Coldry, the process produces a composite pellet that combines lignite and waste iron ore sources. These pellets are fed into a vertical retort to produce a Direct Reduced Iron product suitable for the melt stage of steel production. The process operates at considerably lower temperatures and the use of readily abundant, lowcost feedstocks delivers superior economic returns in comparison to conventional primary iron processes.

COHgen

TRL 2-3

2 Coupled with Coldry, the process produces a composite pellet that combines a unique catalyst H with lignite. These pellets are fed into a vertical retort to produce a hydrogen heavy syngas, leaving most of the carbon fixed in the pellet. Low carbon emission production of hydrogen aims to eliminate Carbon Capture and Storage.

HYDROGEN

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DIESEL

Waste-to-Energy

TRL 5-6

Currently finalising a HOA for the acquisition of this type of technology, ECT is aiming to develop a unique and continuous process for the low-temperature and lowpressure catalytic depolymerisation of Coldry pellets combined with other waste feedstocks like construction wood and end of life plastics to produce diesel, bitumen and asphalt. Lignite’s chemical properties, once converted to Coldry, act as a feedstock stabiliser in the conversion of waste streams to transportation diesel.

ECT | Company Presentation | May 2019

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1 | Coldry Process: cost-effective lignite drying

• → Low temperature

• → Low pressure

“One distinct advantage of Coldry is the relative low heat requirements in the drying process, allowing for the opportunity to make use of waste heat from an industrial facility or power plant.”

Dr Victor Der

• → 60% moisture to <15%

→ Zero direct CO2 emissions

Former Assistant Secretary for Fossil Energy, US Dept. of Energy General Manager, North America, Global CCS Institute

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Mine Waste Heat
1 2 3 4 5 6 7
Screening & Shear & Extrude Conditioning Continuous Water Coldry
feed control attrition Packed Pad recovery pellets
Drying (optional)
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ECT | Company Presentation | May 2019

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1 | Coldry: the ‘gateway’ solution

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Value Proposition Matmor\
Iron & Steel Market
HydroMOR
→ Opens new markets
→ Establishes new revenue streams
• Hydrogen-COHgen
→ Diversifies energy and resource Conversion • CDP
options Processes • Natural Gas Market
• Chars, PCI & Oils
→ Upward revaluation of stranded
or low value low rank coal assets
HELE
→ Enhanced efficiencies High Value
Power Electricity Market
Applications
Generation
→ Mitigate CO2 emissions
Coldry Thermal Steam and heat boiler
Product Applications market
Cost-effective low rank
coal drying is the ProcessColdry Start Fuel or Blend Fuel
‘gateway’ enabler.
Traditional utilisation
Low rank
pathway is ‘low value’. Low rank Coal Fired
Electricity Market
coal Power
station
High value
Medium value
Low value
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Moving up the value chain
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ECT | Company Presentation | May 2019

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2 | COHgen Process: hydrogen production

Features

• → Low temperature

→ Replace natural gas

• → Lower CO2 emissions than natural gas steam reforming process

→ Scalable

• → >50% H2 concentration in gas stream

→ Cheap, abundant catalyst

• → Low cost feedstock - lignite

• → Catalyst reusable

→ Majority of carbon captured in solid form

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Slag
Matmor Recycled Carbon
Catalyst Foaming
Process Catalyst Recovery
Compound
Low rank Coldry COHgen Gas
coal Process plant separation H2
CH4
Heat CO
CO2
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ECT | Company Presentation | May 2019

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3 | Matmor Process: primary iron production

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Matmor employs a hydrogen-based chemical reduction
H pathway, making it the world’s first and only low
temperature, low rank coal-based iron making process.
Inputs
Iron ore
waste streams [Low-rank coal]
Waste
Heat
1 2 3 4 5 6 7 8 9
Mix & Condition Low temp Composite Matmor DRI Steel Casting Finished
extrude drying pellets Retort pellet refining steel
(Electric product
Arc
Furnace)
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ECT | Company Presentation | May 2019

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3 | Matmor Process: benefit comparison

• → Lower Temperature

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Lower Temperature Iron Production
Relative Raw Material Cost vs. Time & Temperature
Temperature is a proxy for asset
20
capital intensity 18 Low temperature + low
16 residence time = lower
Direct Reduced Iron
Lower residence time, higher 14 cost and higher
productivity 12 productivity
10
8
Residence time is a proxy for asset 6 Blast Furnace
productivity 4
2 Matmor
Lower Cost Inputs 0
700 800 900 1000 1100 1200 1300 1400 1500 1600 1700
Bubble size represents ‘Relative Raw Temperature (◦C)
Material Cost’
India - Traditional India - Alternative ECT
Coal based Direct Coldry & Matmor
Blast Furnace
Reduced Iron Kiln Electric Arc Furnace
Basic Oxygen Furnace
Electric Arc Furnace + power generation
Case/Scenario Base Case Base Case Mid Case
CAPEX (Index) 100% 90% 64%
OPEX (Index) 100% 106% 86%
SALES (Index) 100% 109% 104%
ROI (Index) 100% 130% 250%
Residence Time (hours)
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• → Lower residence time, higher productivity

→ Lower Cost Inputs Bubble size represents ‘Relative Raw Material Cost’

ECT | Company Presentation | May 2019

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4 | Waste-to-Energy (WTE)

As part of the feasibility of the Latrobe Valley project, ECT is exploring a unique continuous process for the lowtemperature and low-pressure depolymerisation of Coldry pellets combined with other waste feedstocks, like construction wood and end-of-life plastics, to produce diesel, bitumen and asphalt.

Prospectively, lignite’s chemical properties, once converted to Coldry, act as a feedstock stabiliser in the conversion of these other waste streams into transportation diesel.

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Low rank
coal
Coldry
Process
Recycled WTE
Waste plant
Refinery
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ECT | Company Presentation | May 2019

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Projects

ECT is pursuing a multi–staged approach to the research, development and commercialisation of its unique technologies. COHgen is currently proceeding through laboratory testing and patent preparation.

Coldry, W2E and Matmor are targeting commercial-scale demonstration:

Coldry Pilot Plant & R&D Facility

Integrated Coldry-WTE Commercial Demonstration Plant

Integrated Coldry-Matmor Demonstration Plant

High Volume Test Facility and domestic solid fuel sales up to 35,000 tpa

Bacchus Marsh, Victoria, Australia

Development of a 170,000 tpa Coldry with downstream Waste-to-Energy

Latrobe Valley, Victoria, Australia

Partnership with NLC India Limited and NMDC Limited for the scale up and commercialisation of the worlds only lignite-based, hydrogendriven iron making process

Neyveli, Tamil Nadu, India

ü Local steam, hot water and process heat industry

• ü Optimisation of fuel mix

• ü Maximise boiler efficiency

• ü Multi-feedstock flexibility

• ü Inbuilt fuel security

• ü Reduce CO2 emissions

• ü Reduce total cost of operation

• ü Reduce business disruption

• ü On going R&D capability

Integrated Coldry and waste-to-energy (WTE) process

• ü Enhanced process synergies

• ü Higher-value outputs

• ü Better environmental outcomes

• ü Liquid fuel sales

• ü Solid fuel sales

• ü Zero-emission lignite drying via Coldry

Phase 1: R&D stage

• ü AUD35 million

• ü Largest ever R&D project between Australia and India

Phase 2: Commercial stage

• ü Initial 500,000 tpa integrated steel plant

• ü AUD300 million

• ü International flagship project

ECT | Company Presentation | May 2019

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CONTACT US

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+613 9849 6203
info@ectltd.com.au
Head office: 388 Punt Road South Yarra VIC 3141
Site office: 25 Rowsley-Station Road, Maddingley VIC 3340
www.ectltd.com.au
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Reference #1 | Technology Readiness Levels (TRL)

As originally developed by NASA, technology readiness levels (TRL) are a method of estimating technology maturity of Critical Technology Elements (CTE) of a technology.

They are determined during a Technology Readiness Assessment (TRA) that examines program concepts, technology requirements, and demonstrated technology capabilities.

TRLs are based on a scale from 1 to 9 with 9 being the most mature technology.

The use of TRLs enables consistent, uniform discussions of technical maturity across different types of technology.

TRL	Maturity Stage	Where work is done	Funding level required (conservative)
TRL 1	Basic technology observation and research	Universities, Research Labs	At least $10K
TRL 2	Basic Technology Research – Research to prove feasibility	Universities, Research Labs	$10K - $100K
TRL 3	Research to prove feasibility – Technology development	Universities, Research Labs	$10K - $100K
TRL 4	Various stages of technology development	Universities, Research Labs, Development Service Providers	Up to $100K
TRL 5	Late technology development – Technology demonstration	Development Service Providers Production Foundry, Assembly/Test House	Up to $1M
TRL 6	Technology demonstration – System/subsystem development	Development Service Providers Production Foundry, Assembly/Test House Product Company	$1M to $10M
TRL 7	Final technology demos to system/subsystem development	Development Service Providers Production Foundry, Assembly/Test House Product Company	$1M to $10M
TRL 8	System/subsystem development to early stages of system proven through test, launch & operations	Production Foundry, Assembly/Test House Product Company	Up to $10M or more
TRL 9	System proven through test, launch & operations	Production Foundry, Assembly/Test House Product Company	>$10M

ECT | Company Presentation | May 2019

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Reference #2 | What's in a name?

Coldry

Coldry is the combination of the words, Cold and Dry. Given the relative low-grade waste heat used (i.e. <50℃) the Coldry process dries lignite economically and continuously. A feat that typically uses large amounts of paid thermal energy and/or pressure.

Matmor/HydroMOR

The “MOR” in both names refers to “Metal Oxide Reduction”. The transition from Matmor to HydroMOR, reflects our increased knowledge of the key chemical processes occurring to reduce the metal. Namely, the decomposition of hydrocarbons into a hydrogen-rich syngas which allows for a more efficient and lower emissions reduction process.

COHGen

COHGen is short for, C atalytic O rganic H ydrogen Gen eration. We are the pre-patent stage of this technology’s development so no more can be divulged at this time.

Waste-to-Energy

At this stage, we cannot disclose the proprietary name given to this technology. ECT is investigating the acquisition of this technology and further updates will be forthcoming.

ECT | Company Presentation | May 2019

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