U.S. Congress Urged to Support Portable Fuel Cells to Catalyze Broad Adoption of Fuel Cell Technology; PolyFuel CEO Testifies to Senate Committee That Experience Gained in Supplying Real, Commercial Markets Will Speed Innovation Over the Long Term

Business Wire, July 18, 2006

WASHINGTON -- In remarks delivered yesterday, the CEO of a leading player in the fuel cell market urged The United States Congress to increase funding for portable fuel cell programs in order to preserve U.S. technology leadership and catalyze the market for fuel cells for automobiles and stationery power.

"While automotive and stationary power systems will one day enable society to realize the environmental benefits of fuel cells, it is portable fuel cells that will achieve widespread adoption in the near term, provide experience to industry and consumers, create a supply base, and drive economies of scale," said Jim Balcom, president and CEO of PolyFuel, Inc. "The success of fuel cells in the portable market will directly benefit the longer term commercialization of automotive and stationary fuel cells. I strongly believe that governments and organizations that want to have a leadership role in automotive and stationary fuel cells must play an active role in the introduction of fuel cells into the portable market today."

Balcom explained that more than any other factor, the key variable that drives rapid technological and commercial progress in any industry is market demand. The exploding market demand for portable fuel cells is driven by an increasing disparity between consumer desire for enhanced functionality in portable devices (such as streaming video and music on cell phones and laptop computers) and the power limitations of conventional batteries. This so called "run-time gap" will drive portable fuel cells to mass commercialization within the next few years -- well before automotive fuel cells become economically viable, or stationary power fuel cells become widely deployed. Portable device manufacturers engaged in fuel cell systems development include BYD, Fujitsu, Hitachi, LG, NEC, Panasonic, Samsung, Sanyo, Sharp, Sony and Toshiba; and all of these companies are well positioned to roll-out a fuel cell solution to address the "run-time gap" in the near term.

Importantly, portable fuel cell development and commercialization will "catalyze" the automotive and stationary fuel cell sectors by resolving key challenges such as cost and durability. One of the key technologies that significantly impacts the performance of fuel cells is the "membrane" -- a thin "plastic" film that determines how much power is generated by the fuel cell, and at what temperature, size, and cost. PolyFuel, which is a leading provider of fuel cell membranes for both portable and automotive applications, is actively exploiting the inherent synergies between the two in order to reduce cost, increase durability, and maximize performance of fuel cell systems.

"Mass adoption of portable fuel cells will have a catalyzing impact on the commercialization timelines for fuel cells in the automotive and stationary markets. Wherever possible, the U.S. Government should increase financial support for research, development, demonstration, and commercialization of portable fuel cell technology.

The testimony was delivered to the Senate Committee on Energy and Natural Resources. Full text of the testimony is available at http://www.polyfuel.com/pressroom/polyfuel-congressional-testimony-071 706.pdf (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.).

About Portable Fuel Cells

Portable fuel cells utilize replaceable fuel -- typically methanol -- that in the presence of catalysts and a carefully engineered membrane, produce enough electricity to power small electronic devices such as mobile phones, PDAs, or portable computers. What makes them attractive is the promise of more power and longer run times than is available from conventional batteries. Because of the growing run-time gap, original equipment manufacturers (OEMs), battery manufacturers, and others have been intently focused on readying these small form factor fuel cells to augment batteries in upcoming devices. Such fuel cells, which use refillable or replaceable cartridges of methanol fuel, are on the verge of delivering the necessary continuous power levels that video - and wireless-intensive applications in particular require. In combination with existing battery technologies, they will offer essentially continuous run times as replacement cartridges or refills are easily carried in briefcase, pocket or purse.

About PolyFuel

PolyFuel (www.polyfuel.com) is a world leader in engineered membranes that provide significantly improved performance in direct methanol fuel cells (DMFC) and hydrogen fuel cells, particularly for portable electronic and automotive applications. The state of the art of fuel cells is essentially that of the membrane, and PolyFuel's best in class, hydrocarbon-based membranes enable a new generation of fuel cells that for the first time can deliver on the long-awaited promise of clean, long-running, and cost-effective portable power.

PolyFuel has an unmatched capability to rapidly translate the system-level requirements of fuel cell designers and manufacturers into engineered polymer nano-architectures. Such capability -- based on PolyFuel's over 150 combined years of fuel cell experience, world-class polymer nano-architects, and a fundamental patent position covering more than 23 different inventions -- also makes PolyFuel an essential development partner and supplier to any company seeking to advance the state of the art in fuel cells. Polymer electrolyte fuel cells built with PolyFuel membranes can be smaller, lighter, longer-running, more efficient, less expensive and more robust than those made with other membrane materials.