Hydrogenics Provides Mid-Year Update on Light Mobility Initiatives.

TORONTO -- Multi-faceted deployments of HyPM(TM) power module technology define path to commercialization

HYDROGENICS CORPORATION (TSX:HYG)(NASDAQ:HYGS), reports that the Company's light mobility program, undertaken two years ago as a key strategic priority, is achieving desired outcomes in the areas of targeted early adopter engagement, focused product development, and potential distribution channels.

"We have made great strides in our HyPM technology, especially in the last eighteen months, making it a product of choice for a wide range of light mobility applications and markets," comments Pierre Rivard, President and CEO. "Our strategy is to seed the 'markets that matter' - these are the markets where we present a strong value proposition for the early adoption of hydrogen and fuel cell technology. Inasmuch as customers typically start with small orders of one of two units as they test the technology and the value proposition, we believe many of the customers we are working with today can materialize into substantial commercial opportunities tomorrow. This 'pathway to profitability' model has been used very successfully by developers of new technologies in the past - we believe that Hydrogenics is the company that is going to do it for fuel cells."

Hydrogenics' primary light mobility initiative currently targets the development of fuel cell-ultracapacitor hybrid forklifts, specifically for 24 hour operations in indoor warehouse and manufacturing facilities. Hydrogenics believes that potential productivity improvements may lead to forklifts becoming one of the first viable markets to adopt fuel cell technology. Phase One of Hydrogenics' initiative, already complete, involved the successful deployment of two forklifts at GM Canada's main car assembly plant in Oshawa. Phase Two is now preparing to get underway at a Fedex facility in the Toronto area. In addition to testing the technology in real-time operating conditions, user validation has been a central element of this project. Results of the complete two-phase project will be developed into a white paper to be published later this year.

"Providing end-users with fuel cell products that provide better solutions than what they currently use will drive market adoption," continues Rivard. "By focusing on key deployments with targeted end-users, we are validating the value proposition and the technology while we market our products. This is what we call creating 'market pull', not 'market push'. So far, user endorsement of our fuel cell technology has been very positive and this is motivating us more than ever to get the costs down because we know there's a market there when we do."

Other light mobility activity over the last 6 months has contributed to potential commercial traction across a range of applications. Each of these initial market opportunities has excellent potential for expansion in the short to mid term.

- delivery and road-permitting of Purolator's first zero-emission, fuel cell powered vehicle. The vehicle, equipped with a Hydrogenics 65 kW HyPM in a battery hybrid configuration, will commence in-service trials this summer as part of Purolator's "greening of the fleet" initiative.

- preparation of Toronto's ExPlace to receive a small fleet of next-generation fuel cell-powered John Deere Gators to integrate into their regular grounds operations. This will be the first deployment of John Deere vehicles for end-user validation. Deere continues on a progressive product development track with a recent follow-on order for two HyPM units bringing the total to nine.

- unveiling of Hydrogenics' HyPM hybrid package in The Toro Company's proof-of-concept fuel cell hybrid greensmower. This is believed to be one of the earliest applications for fuel cell technology in grounds equipment.

- completion and demonstration of a fuel cell hybrid midi-bus to the state of North Rhine Westphalia. German TV road certification is in progress and expected to be complete in the third quarter. This fuel cell battery hybrid design has the capacity to at least double the range achievable by batteries alone. Constricted European city cores have a need for this type of bus technology platform.

- engagement of two world-leading OEMs of small electric vehicles - REVA Electric Car Company (Maini Industrial Group, India, www.revaindia.com) and Th!nk Nordic (Norway, www.think.no). Initial HyPM sales for prototype vehicles are being secured at this time. The REVA initiative plans for a small fleet of vehicles as an eco-tourism pilot project launched by the Indian Oil Corporation, and the Th!nk Nordic project plans for additional vehicles over the next two years for various demonstration projects, including Norway's Hynor initiative.

- Demonstration initiatives launched in 2005 included Hydrogenics' sponsorship of University of Waterloo's Challenge X team as they integrate a HyPM power module into the drive train of a GM Equinox vehicle. The team took top honors for their design stage deliverables at a recent Challenge X competition.

HyPM technology is also proving its versatility in vehicle auxiliary power (APU) applications. Two recent APU projects that Hydrogenics has been involved in, both funded by the U.S. Department of Defense, include:

- The provision of a 2X10 kW HyPM to SunLine Transit Agency for integration into an APU in a modified standard Class-8 Peterbilt truck. The truck recently made a trip across the US, demonstrating a significant overall reduction of fossil fuel consumption.

- The provision of a electrolyser-fuel cell APU, to be deployed on board a Stryker Light Armored Vehicle (LAV). The APU will extend the LAV's silent watch capabilities beyond those of conventional APU technologies.

The military has also started to apply hydrogen and fuel cell technology to certain propulsion applications. Hydrogenics has provided HyPM fuel cell power modules for two fuel cell hybrid projects, a shuttle bus and a step van, at Hickam Air Force base in Hawaii.

"The versatility of our HyPM power module products has enabled us to engage in a number of diverse fuel cell projects that each benefit from reduced emissions, reduced noise, increased efficiency and the potential for increased productivity," summarizes Rivard. "Through these varied initiatives we are creating something very valuable to our future success - we are creating position. These early-adopting markets of today are just the first step on the path to global solutions for energy security and sustainability. Hydrogenics is a leader on that path."

About Hydrogenics

Hydrogenics Corporation (www.hydrogenics.com) is a leading global developer of clean energy solutions, advancing the Hydrogen Economy by commercializing hydrogen and fuel cell products. The company has a portfolio of products and capabilities serving the hydrogen and energy markets of today and tomorrow. Hydrogenics, based in Mississauga, Ontario, Canada, has operations in North America, Europe and Asia.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS 

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Law of 1995. These statements are based on management's current expectations and actual results may differ from these forward-looking statements due to numerous factors, including changes in the competitive environment adversely affecting the products, markets, revenues or margins of Hydrogenics' business. Readers should not place undue reliance on Hydrogenics' forward-looking statements. Investors are encouraged to review the section captioned "Risk Factors" in Hydrogenics' regulatory filings with the Canadian securities regulatory authorities and the United States Securities and Exchange Commission for a more complete discussion of factors that could affect Hydrogenics' future performance. Furthermore, the forward-looking statements contained herein are made as of the date of this release, and Hydrogenics undertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release. The forward-looking statements contained in this release are expressly qualified by this.

Hydrogenics Corporation (TSX:HYG) (NASDAQ:HYGS)