Commercial Fuel Cells to Take off in 2007 with ''Always On'' Lifestyle Setting Demand for ''Portable Power''.

MOUNTAIN VIEW, Calif. -- Seminar Focused on Portable Fuel Cells Featured Talks by KDDI, Intel, Vodafone, Johnson Matthey, Collins Stewart, PolyFuel, and Former IATA Regulator

A tangible commercial market for micro-power fuel cells to power mobile devices will begin in 2007 and will be fully underway by 2008, a telecommunications expert predicted recently at a London seminar focused on portable fuel cells. The remarks, made by Dr. Hitomi Murakami, vice president, Corporate Technology Sector, KDDI Corporation of Japan, supported a positive outlook expressed across the board by all co-speakers at the one-day event.

The general consensus of these experts, from the computer, manufacturing, investment, and transportation regulatory sectors, was that the market will be driven by a strong and rapidly-rising demand for portable power that has already outstripped the capabilities of batteries alone, and that portable fuel cell technology has now reached a stage where size, power and cost are at acceptable levels for consumers.

"Consumers in Japan are using their mobile phones for nearly everything," said Murakami. "They are watching television, playing games, reading books, working, talking, and navigating. Now they even want to record TV shows while they are on the go. Compared to ordinary cell phone usage, these 'lifestyle' applications demand much greater power and energy."

According to Murakami, as many as 80% of users have run into difficulties because of battery depletion, and most list battery run time as their greatest complaint about their mobile devices. "Watching digital terrestrial broadcasts will run down the average portable device in less than two hours," said Murakami. "But such users have minimum expectations of at least two days between charges. This is a tremendous gap. Fuel cells should not be regarded as technology that can make mobile phones 'much better.' Instead, fuel cells should be seen as 'essential' for the new 'power user' lifestyle."

Murakami revealed that KDDI, which is the second largest telecommunications provider in Japan, is actively working in partnership with Toshiba and Hitachi to develop commercially viable portable fuel cells in order to meet mobile user requirements. Additionally, KDDI is planning to use environmentally friendly fuel cells as backup power supplies for cell phone base stations in the near future.

Dr. Jonathan Frost, head of Johnson Matthey Fuel Cells, confirmed that the advances in technology that have occurred over the past few years, particularly in fuel cell membranes and catalysts, have now reached the threshold for commercialization. "Direct methanol fuel cells are already comparable with lithium-ion batteries in long run time applications and have the potential to exceed current performance levels by nearly 5 to 1. From our standpoint, as a manufacturer of fuel cell components and assemblies, the combination of medium term sales potential and the opportunity for significant cost and performance improvements is attractive."

Another gating item has been regulatory issues. Portable fuel cells typically use methanol as their source of fuel, a lightweight and readily-available alcohol that is currently not permitted in the cabins of commercial aircraft. According to Mr. Jean Abouchaar, an independent regulatory consultant who spent 27 years with the International Air Transportation Association, this is about to change. "Effective January 1, 2007, the International Civil Aviation Organization (ICAO) will allow fuel cells based on methanol - and selected other fuels - to be carried as 'carry-on' baggage and used onboard commercial aircraft by passengers and crew," he said. "This is an important milestone for the portable fuel cell industry."

The May 17 seminar entitled "Portable Fuel Cell Commercialization: Catalyzing the Industry" was targeted at UK investors, analysts and media. In addition to Drs. Murakami and Frost, attendees heard Mr. Drew Smith, sector director, Mobile Platform Technology at Intel Capital; David Ashbrook, terminal technology engineer, Vodafone Group Services Limited; Dr. Martin Johnston, research analyst at Collins Stewart Ltd; and Jim Balcom, president and CEO, PolyFuel, Inc., a leading developer of fuel cell membranes.

In summarizing the full day of presentations, Balcom said: "The portable fuel cell industry is really all about enabling an 'always-on', mobile lifestyle that is now completely taken for granted by our children, and is changing the world for the older generation. I am very excited about this market and the steadily increasing momentum."

A summary of the seminar and biographical information on the speakers may be downloaded from http://www.polyfuel.com/pressroom/UK_Seminar_May2006.pdf.

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 15 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.

PolyFuel's target customers are the world's leading portable fuel cell system developers. Of the 19 such customers currently engaged, 11 are divisions of household brand name consumer electronics manufacturers, and sixteen of the nineteen are now testing or have tested PolyFuel's fuel cell membrane material. Of the 16, eleven have completed their evaluation testing and all eleven have gone on to purchase PolyFuel's membrane products. Five of the largest Japanese and Korean consumer electronics companies now rank PolyFuel's membrane as the best portable fuel cell membrane available in the world today. To date, NEC and Sanyo have disclosed they are using PolyFuel membranes.

PolyFuel was spun out of SRI International (formerly Stanford Research Institute) in 1999, after 14 years of applied membrane research. The company is based in Mountain View, California, and is publicly listed on the AIM stock exchange in London.

Editors, note: All trademarks and registered trademarks are those of their respective companies.

Additional background information is available at www.roeder-johnson.com.

This news release may contain forward-looking statements, including with respect to the development of the fuel cell market. Readers are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, risks inherent in the development and commercialization of potential products. Actual results may differ materially from the results anticipated in these forward-looking statements.

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