US approves treatment of PCB-contaminated oil

27 June 2012 

Hydrodec Group plc

("Hydrodec")

US approval received for treatment of PCB-contaminated waste oil

Hydrodec Group plc, the cleantech industrial oil re-refining group, is pleased to announce that the US Environmental Protection Agency ("EPA") has issued Hydrodec with a final permit for the storage and treatment of polychlorinated biphenyl ("PCB") contaminated used transformer oil in the US.

The approval marks a significant new phase in Hydrodec's development and will for the first time enable it to commence the re-refining of PCB-contaminated transformer oil at its plant in Canton, Ohio. PCBs are a toxic substance now banned under international regulations but were previously widely used as an additive in transformer oils.

The EPA final permit reconfirms that Hydrodec has demonstrated it is capable of operating its PCB destruction process in an effective and safe manner and that its commercial storage meets all applicable requirements. Issuance of the permit follows the close of the public notice period announced on 25 April 2012.

Following the completion of certain administrative formalities Hydrodec would anticipate being able to process PCB contaminated oil in the US from September. This approval will add to the volumes of used oil available to Hydrodec in the US, and at lower cost. As importantly, it will lend further credibility to the Hydrodec offer creating a "one-stop shop" and environmentally-friendly solution for used transformer oil for utilities and other suppliers.

Ian Smale, Chief Executive of Hydrodec, said: "The grant of a license to process PCB-contaminated oil by the EPA is a big milestone for our business in the US, and it endorses the Hydrodec process as a real alternative to incineration.

"Initial volumes will not be substantial but will be incremental to the current used oil business. We are encouraged by the level of interest from customers and the attractive margin opportunity this represents.

"The ability to handle and process PCB-contaminated oils significantly differentiates the Hydrodec cleantech offering in the United States; the full impact of this will become apparent in the next year or so."

Hydrodec's technology is a proven, highly efficient oil re-refining and chemical process which is being initially targeted at the multi-billion dollar market for transformer oil, used by the world's electricity industry. Spent oil, including PCB-contaminated oil, is taken as the primary feedstock and processed by Hydrodec enabling 99 per cent or greater recovery of oil for reuse while also eliminating PCBs without environmentally harmful emissions.

For further information please contact:

Notes to Editors:

Hydrodec operates refining plants in Canton, Ohio, US and Young, New South Wales, Australia. The Company's shares are listed on the Alternative Investment Market of the London Stock Exchange (AIM) (ticker: HYR).