AIRBORNE PROCESS™ SELECTED FOR $19.7 MILLION GRANT
BY US DEPARTMENT OF ENERGY

(SANTA FE, NM - October 14th, 2004) - Airborne Clean Energy is pleased to announce that the "Airborne Process™" has been awarded a $19.7 million grant from the US Department of Energy's Clean Coal Power Initiative (CCPI) program.

Under the grant, Airborne will partner with co-sponsor Peabody Energy, the worlds largest private sector coal company, and with Airborne's strategic partners; HPD Veolia Water Systems North America and Icon Construction, in a commercial scale demonstration of Airborne's proprietary scrubber, regeneration and fertilizer production processes. The facility will be located at Peabody's Mustang Project, a proposed 300 megawatt coal-fueled power plant near Grants, New Mexico.

In announcing the award in Santa Fe New Mexico on Thursday October 18th, US Secretary of Energy Spencer Abraham said "The Peabody Mustang clean coal project, including its unique Airborne Process advances the President's Clean Coal Power Initiative by enabling us to make maximum use of coal, our most abundant energy resource. But the project is unique in that it also advances President Bush's Clear Skies Initiative by controlling harmful emissions from the plant, and doing so at a success rate we don't often see in an industrial setting"

The $79 million project, for which the Energy Department will provide $19.7 million, will develop an innovative and cost-competitive multi-pollutant control process for achieving 99.5 percent removal of sulfur dioxide, 98 percent removal of SO3 (sulfuric acid mist precursor), 98 percent removal of nitrogen oxides, and 90 percent total system removal of mercury from plant emissions, while turning the byproducts into a high-quality, high-value granular fertilizer. The grant from the DOE will be repaid by the project team over the operational life of the project.

Approved by congress in 2002, the Clean Coal Power Initiative is an innovative technology demonstration program that fosters more efficient clean coal technologies for use in new and existing electric power generating facilities in the United States.

The Department Of Energy previously announced that it had received proposals for a new generation of clean coal projects valued at nearly $6 billion, requesting about $1 billion in federal cost sharing. The DOE award to the Peabody / Airborne Mustang Project was the first grant announced in the second round of the Clean Coal Power Initiative.

CCPI, an industry / government cost-shared partnership, responds to the DOE's commitment to increase investment in clean coal technology. The DOE announcement of the grant to the Peabody / Airborne Mustang project stated, "Candidate technologies are demonstrated at full-scale to ensure proof-of-operation prior to commercialization…. Early CCPI demonstrations emphasize technologies that are applicable to existing power plants and also include construction of new plants…. Successful implementation of CCPI will solve many of the environmental issues associated with fossil fuel use and provide high-efficiency, low-cost future generating capacity. Program benefits are expected to be substantial".

"We believe Airborne's innovative and cost competitive multi-emissions containment control technology will help the United States power industry achieve the national priorities set out by President Bush in his Clear Skies Initiative, to significantly reduce power plant emissions of sulphur dioxide, nitrogen oxide and mercury, and thereby help make coal a sustainable and clean, long term, source of energy", said John F. Kearney, Airborne's Chairman and CEO.

The Airborne Process is the enabling technology that allows for a balance between economic growth, environmental protection and secure - low cost domestic energy resources.

Airborne Clean Energy LLC of Terrace Park, Ohio, is commercializing an advanced multi-contaminant emission control process (the Airborne Process™) for reducing contaminants from coal-fueled power plants. Airborne Clean Energy holds the exclusive rights to the patented Airborne Process™ throughout the United States and Canada under license from Airborne Technologies Inc. of Calgary, Alberta.

Peabody Energy (NYSE: BTU) is the world's largest private-sector coal company, with 2003 sales of 203 million tons and $2.8 billion in revenues. Its coal products fuel more than 10 percent of all U.S. electricity and more than 2.5 percent of worldwide electricity.

HPD, a Veolia Water Systems company is a subsidiary of Veolia Environment (NYSE:VE and Euronext Paris: VIE), the largest environmental services company in the world with more than 295,000 employees in 100 countries and annual revenues of more than $25.6 billion. HPD has partnered with Airborne to design and build the equipment necessary for the Airborne regeneration facility.

Icon, Inc. is a private corporation that specializes in providing engineering (through its affiliate, Datel Engineering), construction, and facility operating services for industrial applications. Icon is known globally for its innovative solutions and commercialization of new technologies in the steel and aluminum industries. Icon's extensive experience with pan granulation, agglomeration, and material handling is directly applicable to Airborne's fertilizer production facility.

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