Carbon Credit Project Approval

08 September 2016

Hydrodec Group plc

("Hydrodec" or the "Company")

Carbon Credit Project Approval

The Company is pleased to report that the American Carbon Registry ("ACR") has approved Hydrodec's patented technology as a carbon offset project in the voluntary carbon offset market, creating an incremental revenue stream for the Company and establishing Hydrodec (as far as the Board is aware) as the only oil re-refining business in the world to receive carbon credits for its output.

This is the final stage in a process that began prior to the recommissioning of the Canton plant and the approval allows the Company to generate, and monetise, carbon credits. Hydrodec of North America ("HoNA") is now generating offsets through the re-refining of used transformer oil, which would otherwise ordinarily be incinerated or disposed of in an unsustainable manner. The ACR has recognised 165,000 credits for HoNA's previous production between 2009 and 2014. The Company anticipates that it will generate 50,000 to 60,000 tons of carbon offset annually going forward. Whilst the historical credits may only generate nominal sums through trading, the ongoing generation of such credits could realise up to US$5 per ton.*

Commenting on the approval, Chris Ellis, Chief Executive Officer of Hydrodec said: "ACR approval means that Hydrodec now produces the only oil globally which generates a carbon credit. It is a further demonstration of the world leading nature of our technology and product and reinforces the sustainability element of it to the primary users of transformer oil. Although the initial direct financial contribution of trading the credits may be modest, strategically I expect that over time this will enable Hydrodec to further develop commercial relationships with key transformer manufacturers and utilities in our target markets."

Colin Moynihan, Chairman of Hydrodec added: "The last nine months have seen the continued turnaround and transformation of Hydrodec. Today marks a further important milestone in the Company's progress. Carbon credit approval seals Hydrodec's objective to establish a key role as a clean tech company with genuine market leadership; the first proven 'green oil' technology in the world with the capacity to treat and re-refine used and contaminated oil into high quality, renewable transformer oil."

*Source: Carbonomics

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Notes to Editors:

Hydrodec's technology is a proven, highly efficient, oil re-refining and chemical process initially targeted at the multi-billion US$ market for transformer oil used by the world's electricity industry. MarketsandMarkets forecasts that the global transformer oil market is expected to grow from US$1.98 billion in 2015 to US$2.79 billion by 2020 at a CAGR of 7.14%. Spent oil is currently processed at two commercial plants with distinct competitive advantage delivered through very high recoveries (near 100%), producing 'as new' high quality oils at competitive cost and without environmentally harmful emissions. The process also completely eliminates PCBs, a toxic additive banned under international regulations. Hydrodec's plants are located at Canton, Ohio, US and Bomen, New South Wales, Australia. 

Hydrodec's shares are listed on the AIM Market of the London Stock Exchange. For further information, please visit www.hydrodec.com.