28 March 2022: Environmental Clean Technologies Limited announced a significant step forward in the commissioning program for the Phase 1 commercial demonstration of COLDry at its Bacchus Marsh site. Key points: Dry commissioning started mid-March with no material issues. Wet commissioning to begin before the end of March.

Opportunity for significant drying system optimisation identified. Targeting fast-tracking of Phase 2. IP protections during commissioning to gain increased focus. Continued program for attracting new partners and investors.

Director incentive options & engagement terms set for Mr. Blackburn. Over the recent weeks, the Company has made substantial progress in the dry commissioning program for the scaled-up COLDry demonstration plant, specifically the primary processing train and conditioning system. To date, no material concerns have presented, positioning the project team to commence `wet commissioning'.

The R&D team has been working in parallel to evaluate samples taken from commissioning and support further downstream optimisation as the plant comes online. With the introduction of lignite during wet commissioning, the project team is able to fully test all components, as an integrated plant, ultimately moving to steady-state operations. During dry commissioning, a potential process efficiency gain was identified in the conditioning system.

This opportunity centres on the potential of the new, five-pass conditioning system and direct supply to the planned downstream "phase 2" pyrolysis kiln. This would produce significant CAPEX and OPEX savings across Phase 1 and Phase 2 of the current demonstration project and for the planned Latrobe Valley project. The engineering team has modelled the conditioning system's likely performance and the current estimations indicate a significant efficiency improvement and potential for greater moisture reduction prior to transfer to the Packed Bed Dryer (PBD).

The materiality of this improvement warrants increased commissioning focus and development activity, and may represent a significant capital and operational cost-saving opportunity for downstream applications, including: Reduced size or increased throughput of the PDB. Direct feed from the conditioning system into the Phase 2 pyrolysis stage (thus potentially bypassing the PBD stage. Reduced energy consumption of the overall system leading to improved operational costs Accelerated implementation of Phase 2 ahead of finalising the COLDry-PBD stage Reduced CAPEX for the proposed Latrobe Valley project.