Environmental Clean Technologies Limited announced the signing of a binding Joint Venture Agreement (JVA) with GrapheneX. This agreement supports the rollout of Phase 2 of ECT's Bacchus Marsh COLDry project (the Project) to deliver a world-first demonstration of the Company's proposed commercial-scale net-zero hydrogen and electricity production. To support the rollout of Phase 2, ECT is also pleased to announce that it has received firm commitments from sophisticated investors to raise $5 million under a placement which was joint led by Kaai Capital and Peak Asset Management.

The JVA upgrades will enable the demonstration of low emission electricity production from syngas and the generation of hydrogen derivative products from lignite and waste biomass blends, making it the large demonstration of its kind in Australia. GrapheneX will commit to supplying a multi-feedstock 39MW turbine to be installed at ECT's Bacchus Marsh site. GrapheneX will also supply funding of $3.5 million for installation of the turbine and the formic acid process equipment.

The formic acid plant will demonstrate the production of formic acid (HCOOH) from the syngas product stream. Formic acid is a liquid organic hydrogen carrier that provides a safer, lower-cost hydrogen transport alternative1 to ammonia or cryogenic hydrogen. In addition, it is also a product in its own right, used as a livestock feed preservative, amongst other applications.

ECT will commit $3.5 million to the JVA, from which the company will fund the installation of the pyrolysis kiln and ancillary plant to produce char and syngas from COLDry pellets made from a blend of biomass and lignite. The Project, similar to the HESC2 project, aims to be a fully integrated supply chain solution for hydrogen. However, the key difference for ECT's project is that, instead of focusing on high purity hydrogen, it will focus on hydrogen derivatives, which solve the immediate storage and transportation challenges.

In addition, the Project does not require the CCS infrastructure that is being planned to curtail emissions at for Blue Hydrogen projects. By eliminating two of the biggest challenges facing the immediate deployment of hydrogen production plants, the Project allows ECT and GrapheneX to focus on technical scale up, commercial optimisations and further emissions and waste improvements. Phase 2 of the Project was placed on hold in October 20213 as part of the Company's strategic review to allow a re-focus on formalising relationships with potential project partners, with the view to accelerate commercialisation and diversify project risk and funding.

The rollout of Phase 2 will establish R&D capability to support the development of: Hydrogen use in transport & electricity markets, Fertility improvements to agricultural char, Utilisation of char as a fertiliser & soil health feedstock, Assessment of higher value carbon applications: Graphitic carbon, Battery anodic carbon and Graphene. The company's recently released corporate presentation4 highlighted the revised Phase 2 development plan, outlining the objective of demonstrating a net zero-emission hydrogen and agricultural char process, including: Char and syngas production. Formic acid production.

Dimethyl ether production. Hydrogen production. Electricity production (hydrogen fuel cells & gas turbine).

Phase 1 of the Project, focusing on the scale-up of the Company's world-first zero-emission COLDry lignite drying process, commenced commissioning in March.