Bennett Environmental Updates Status Of Contract To Process Contaminated Soils From Federal Creosote.

OAKVILLE, Ontario -- Bennett Environmental (AMEX:BEL) (TSX:BEV) today reported on the status of its contract to treat soil contaminated with wood treatment chemicals from Phase III of the Federal Creosote Superfund Site ("FC Site") in Manville, New Jersey.

In June, 2003 Bennett announced that it had been awarded a contract (the "Phase III Contract") to treat an estimated 300,000 tons of soil from the FC Site.

Bennett has treated contaminated material derived from three phases of work at the FC Site. Bennett has always performed work in relation to the FC Site pursuant to contracts awarded by the prime contractor on the site, Sevenson Environmental Services, Inc. ("Sevenson"). The Phase III Contract took the form of an "indefinite quantity/indefinite delivery" standard form purchase order signed by Bennett and Sevenson which was stated to be for the delivery of 300,000 tons plus or minus 15%. The actual amount ultimately to be treated by the Corporation and the timing of deliveries under the contract could not precisely be ascertained in advance. Bennett's experience over the two year period leading to the award of the Phase III Contract suggested it would treat the full 300,000 tons. In the two previous phases of FC Site work, Bennett received and treated 101,000 tons, which is well over the maximum quantity specified in the subcontracts it entered into for that work.

Shortly after the award of the contract in May 2003, an unsuccessful bidder protested the award to the United States Army Corps of Engineers ("Corps") which supervises the contractors on the FC Site responsible for the remediation process and consents to the award of subcontracts under U.S. government procurement regulations.

The Corps purported to withdraw its consent to the Phase III Contract but consented to ship up to 10,000 tons for treatment under the Phase III Contract. Sevenson did not take any action to cancel the original purchase order for approximately 300,000 tons.

Since August, 2003 Bennett has attempted through U.S. Freedom of Information Act requests and numerous interventions by its counsel to ascertain the precise status of the Phase III Contract. Throughout this period Bennett has been actively performing and receiving payment for services at the FC Site. It has accepted about 7,000 tons under the Phase III Contract. Bennett's best information, based on July, 2004 correspondence from the Corps, is that the Phase III Contract remains in effect but that future deliveries under it are highly unlikely to resume. Shipments will continue under another contract as described below.

After the protest of the Phase III Contract and the purported withdrawal by the Corps of its consent to that contract, Sevenson purported in May, 2004 to award further new subcontracts for the same type of services at the FC Site as were covered by the Phase III Contract. Bennett has repeatedly asked Sevenson to state whether the 2004 contracts supplement or purport to supersede the Phase III Contract. Sevenson has never responded formally to these queries. To benefit from deliveries from the FC site, Bennett elected to participate in the contract process. Without waiving any of its rights under the Phase III Contract, Bennett entered on June 3, 2004 into an indefinite quantity/indefinite delivery subcontract with a guaranteed minimum of 1,000 tons and a maximum of 100,000 tons for the same type of services as were covered by the Phase III Contract. The new subcontract is on less favourable economic terms than the Phase III Contract but consistent with pricing under contracts concluded before the Phase III Contract. Assuming only 100,000 tons rather than 300,000 tons is shipped under this contract, it will remove $90 million from the contract backlog. On July 21, Bennett received the first shipment of 220 tons under the 2004 subcontract. Management is awaiting a definitive US Environmental Protection Agency design plan that is currently in preparation to better evaluate the prospects for additional contracts for the FC Site.

Sevenson remains a key customer of Bennett. With respect to future work, Bennett's best information is that Sevenson still intends to make deliveries under the June, 2004 contract and Bennett intends to pursue additional work on the FC Site. Bennett understands the Corps and Sevenson are satisfied with Bennett's performance. Bennett intends to take all commercially reasonable steps to receive shipments of soils from the FC Site in a manner that both protects its contractual rights and preserves its commercial relationship with Sevenson.

About Bennett Environmental Inc.

Bennett Environmental Inc. is a North American leader in high temperature treatment services for the remediation of contaminated soil and has provided thermal solutions to contamination problems throughout Canada and the US. Bennett Environmental's proprietary technology provides for the safe, economical and permanent solution to contaminated soil. Independent testing has consistently proven that the technology operates well within the most stringent criteria in North America.

Bennett Environmental is listed on the Toronto Stock Exchange (Trading Symbol "BEV") and the American Stock Exchange (Trading Symbol "BEL").

Notes regarding forward-looking information

This news release includes statements about expected future events and/or financial results that are forward looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbour for forward-looking statements provisions contained in the Private Litigation Reform Act of 1995. The Company cautions that actual performance will be affected by a number of various factors, many of which are beyond the Company's control. Discussions of the various factors that may affect future results are contained in the Company's filings with the Securities and Exchange Commission and Ontario Securities Commission.