Fuel Tech and Chem-Mod Announce Project Development Agreement to Pursue SO2 and Mercury Reduction Opportunities

Fuel Tech, Inc. (Nasdaq: FTEK) and Chem-Mod LLC, a privately-owned environmental services company, today announced the signing of a Project Development Agreement to demonstrate the benefits of certain complementary technologies. The objective of the agreement is to jointly market a program for substantially reducing emissions of multiple pollutants, including sulfur dioxide (SO2) and mercury, from coal-fired utility and industrial plants utilizing each company’s proven technologies. Chem-Mod is the developer of The Chem-Mod™ Solution, a low capital cost technology that uses an innovative dual sorbent system for introducing highly reactive inorganic materials before, during and after coal combustion in order to achieve significant reductions in emissions of sulfur dioxide, mercury and other heavy metals, such as arsenic. Fuel Tech’s core technologies revolve around the precise injection of chemicals into boiler environments utilizing computational fluid dynamics models enhanced by proprietary visualization software. By incorporating both technologies, it is anticipated that chemical dosage rates can be reduced significantly while increasing chemical efficacy, thereby lowering the ongoing costs associated with prospective emission reduction programs. The business model under this agreement is similar to Fuel Tech’s FUEL CHEM® business model, and any profits under this agreement would be shared equally between the two companies. This combined approach is believed to be particularly well suited for operators of industrial boilers and small to medium-sized utility boilers. Such units, under ever-tightening SO2 and mercury emission regulations, may otherwise be faced with the prohibitive cost and physical space limitations of competing approaches, including flue gas desulfurization and activated carbon injection systems. In addition, large coal-fired boilers already fitted with flue gas desulfurization units, or scrubbers, may benefit operationally and financially from incremental SO2 reductions, made possible by combining the two companies’ technologies. John F. Norris Jr., President and Chief Executive Officer of Fuel Tech, commented, "Electric utility and industrial plant operators are anxious to find lower-cost solutions for reducing SO2 and mercury emissions, particularly in cases where capital intensive upgrades on smaller or older units cannot be economically justified. For that reason, we are excited about the prospect of jointly marketing our chemical injection capabilities with Chem-Mod’s demonstrated technologies to yield a more cost-effective solution for reducing undesirable plant emissions. We intend to test this combined approach expeditiously.” Doug Comrie, Vice President of Chem-Mod, stated, "While Chem-Mod and Fuel Tech each have strong capabilities and solutions in the area of emissions control, together we hope to be able to offer more effective, more affordable and even more comprehensive benefits to the many energy and industrial companies looking for ways to reduce their emissions. We look forward to helping coal-fired plants become a truly clean, reliable and low cost energy source.” About Fuel Tech Fuel Tech is a leading technology company engaged in the worldwide development, commercialization and application of state-of-the-art proprietary technologies for air pollution control, process optimization, and advanced engineering services. These technologies enable customers to produce both energy and processed materials in a cost-effective and environmentally sustainable manner. The Company’s nitrogen oxide (NOx) reduction technologies include the NOxOUT®, NOxOUT CASCADE®, NOxOUT ULTRA®, Rich Reagent Injection (RRI) and NOxOUT-SCR® processes. These technologies have established Fuel Tech as a leader in post-combustion NOx control systems, with installations on over 450 units worldwide, where coal, municipal waste, biomass, and other fuels are utilized. The Company’s FUEL CHEM® technology revolves around the unique application of chemicals to improve the efficiency, reliability, fuel flexibility and environmental status of combustion units by controlling slagging, fouling, corrosion, opacity and acid plume, as well as the formation of sulfur trioxide, ammonium bisulfate, particulate matter (PM2.5), carbon dioxide and NOx. This technology, in the form of a customizable FUEL CHEM program, is being applied to over 90 combustion units burning a wide variety of fuels including coal, heavy oil, biomass, and municipal waste. A breakdown of the nature of these customer units is posted on the Company’s website. Many of Fuel tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. These capabilities, coupled with the Company’s innovative technologies and multi-disciplined team approach, enable Fuel Tech to provide practical solutions to some of our customers’ most challenging problems. For more information, visit Fuel Tech’s web site at www.ftek.com. About Chem-Mod LLC Chem-Mod LLC, based in Port Clinton, Ohio, is a private environmental services company and the developer of The Chem-Mod™ Solution, a new technology that has been proven in both the laboratory and full-scale commercial tests to dramatically reduce mercury, sulfur and other toxic emissions produced by coal-fired power plants. Chem-Mod’s dual-injection sorbent system is a patent pending technology and process that is exclusively licensed in the U.S. and Canada to Chem-Mod and exclusively licensed for the rest of the world to Chem-Mod International LLC. For more information about Chem-Mod LLC or The Chem-Mod™ Solution, please go to www.Chem-Mod.com. This press release may contain statements of a forward-looking nature regarding future events. These statements are only predictions and actual events may differ materially. Please refer to documents that Fuel Tech files from time to time with the Securities and Exchange Commission for a discussion of certain factors that could cause actual results to differ materially from those contained in the forward-looking statements.