Startech Environmental provides update on Plasma Converter System for hazardous waste

WILTON, Conn., Dec. 23, 2002 -- Startech Environmental Corp., an environmental equipment company whose Plasma Converter is essentially an electrochemical system that, while safely destroying wastes, even hazardous wastes, converts those materials into useful and valuable commodity products, provides an activity update.

Joseph S. Klimek, Startech president and CEO, stated, "There are many projects and activities we would like to discuss with shareholders and other interested parties, but want to insure that the information we provide on an individual or group basis is also disseminated to the market as a whole. By providing this update we hope to alert all of our constituencies to the many exciting and ongoing activities we have ahead of us for 2003."

Japan

The Plasma Converter System installed in Japan is operationally ready to process 5 ton per day of hazardous incinerator ash. The system has shown its robust capability to process incinerator ash. All of the scheduled modifications to our system that we previously announced have been installed and we are awaiting confirmation from the Customer to begin 24 hour operation.

As soon as the Customer is ready to begin full processing we will dispatch our engineers to support this final step. Systemization runs have demonstrated compliance with operational performance standards and specifications.

The standard Plasma Converter System, including the standard melt extraction system has shown its ability to operate in a comprehensive manner in accordance with the contract requirements. In addition to the base system, the customer contracted for a custom-designed continuous melt extraction and quench subsystem. This subsystem has been installed and development work will continue during operational processing.

South Carolina

Our initiative in South Carolina is steadily progressing. The Joint Development Project in South Carolina with ViTech Enterprises is to manufacture and install a 10 ton per day Plasma Converter facility designed to destroy out-of-date pharmaceutical products. Installing a U.S. based commercial system remains a key component of Startech's marketing strategy. The permitting cycle has been initiated and ViTech continues to work towards issuance with the South Carolina authorities. In support of the project, county officials have committed to provide the land, buildings and utilities for the project.

Eastern Europe

Eastern Europe continues to be a great source of opportunity for Startech. The company recently attended the United States Trade Development Authority's (USTDA) sponsored Waste-to-Energy & Renewable Energy Regional Conference in Prague, Czech Republic. Following the Conference scheduled meetings were held with our Customers in Poland, Chempol, Ekologia, and the company representing the Municipality of Bytom. Meetings were also held with new potential customers who have expressed serious interest in using the Plasma Converter for their planned environmental projects throughout Eastern Europe.

The Municipality of Bytom committed to finalizing a contract in the first quarter of calendar year 2003 for the Startech plasma facility presented by Mayor Wojcik at the Prague conference. The company also has been presented with a letter of intent by a Polish chemical company that will be visiting our Bristol facility in early January 2003.

South Africa

Progress in South Africa has been achieved through a very deliberate and exact process. The country of South Africa has put in place a rigorous environmental framework for permitting hazardous waste facilities. The company said the process is now coming to a conclusion and believe that the many hurdles that exist in South Africa for such a facility have been successfully cleared. The project developer and its professional environmental consultants recently completed a series of public meetings with local stakeholders and government officials.

This was one of the last steps before the submission of the final scoping document to the permitting authorities. Adjacent landowners to the proposed site have requested an extension to review and comment on certain aspects of the draft scoping document that was previously circulated. The project developer has agreed to extend the review period until the end of January, due to the start of the summer holiday period in South Africa. The final scoping document addressing any concerns raised during the review period is scheduled for submission at that time and a decision is expected within 90 days of the submission.

An investment document has been prepared for the project developer by a well known project financier who will lead the effort to fund the project. The company believes funding commitments will be obtained during the same time frame the authorities are reviewing the final scoping document so that the project is ready to proceed once a permit is issued.

Projects in the Development Stage

While the above project summaries address the questions the company receives most often from shareholders and other interested parties, it is also important to report the number and scope of other activities being worked on throughout the company.

Startech's core staff and its representatives have been in discussions with companies worldwide. A steady flow of visitations and demonstrations continue to be made at Startech's Engineering, Research, and Demonstration (ERD) Facility in Bristol, CT and many proposals/quotations have already been provided to prospective buyers.

With respect to the following projects, it is important to note that Startech is not "driving" the process, since we are a provider. Rather, we are subject to the time schedules and drivers affecting our customers. This fact has made it difficult to forecast exactly when commitments will occur.

U.S. Market

-- Startech is in discussions for medical waste applications in Rhode Island and Kentucky. In Rhode Island we are focusing on available sites, and in Kentucky several quotations have been submitted for an application to be sited in the Louisville area.

-- It has had early stage discussions with a Colorado-based company that would use a PCS and the resulting PCG gas as a feedstock from which to make an alternative fuel additive as a replacement for MTBE.

-- Our project for the processing of household hazardous waste in Ohio is still underway. A series of meetings have been held with representatives of a solid waste authority in Ohio and at our facility where a demonstration was conducted. A favorable third-party technical assessment associated with this project has been completed and issued by the customer's professional consultant.

-- The company has had initial meetings with a major pharmaceutical company that has expressed interest in the application of the PCS to their various manufacturing wastes. They have visited the Startech ERD Facility and we are now working with the customer to address various regulatory issues.

-- Startech's commercialization of the StarCell™ Hydrogen Separation System is continuing. At Startech's Engineering, Research and Demonstration (ERD) Facility, several enhancements to the Plasma Converter System (PCS) will be incorporated that will expand testing and research capabilities. Specifically, the company will enhance its analytical and control capabilities to characterize and optimize Plasma Converted Gas production for the StarCell™. It will now have the capability to process PCG through StarCell modules to further test and improve upon the product.

-- Engineering Services is preparing for a program to demonstrate the PCS for the disposal of end-of-life electronics. The growing difficulties and hazards posed by things such as computers, picture tubes and printed circuit boards are driving many agencies and corporations to search for environmentally and economically beneficial alternatives to current disposal options.

International Markets

-- Representatives in Australia have communicated with many customers in Australia and New Zealand for applications that treat PCBs, medical waste and industrial sludges. In one case, a site has been identified and the funding process is in the latter stages of development.

-- The company's Japanese distributor has recently requested and we have provided a number of quotations for PCBs, medical waste and the processing of Freon gas. It expects that there will be additional contracting by the second quarter of calendar 2003. Startech, along with its representative, has hosted many visitations to Bristol by potential Japanese customers. It has scheduled in January 2003 the visit of a delegation of officials who are tasked with the destruction of PCBs in a region of the Japanese market.

-- Meetings have been held, including a demonstration, with potential Korean customers for an application of industrial hazardous wastes in landfills throughout the country. A quotation has been submitted and we believe that a proposal will be requested in early 2003.

-- The company has received strong interest from customers located in the Peoples' Republic of China (PRC). The opportunities in the PRC are significant; however, the company realizes that the project development cycle in China is long. To date, numerous quotations have been submitted and they anticipate requests for proposals in early 2003.

-- Progress has been made in Canada on an application for the processing of scrap tires and the production of hydrogen. A representative has met with various government officials and is in the final stages of funding on the project. A site has been identified and the customer is securing waste streams and the sale of their PCG product.

-- Various initiatives in Italy have been undertaken which include applications for medical waste, tires, and hazardous industrial wastes. A series of early stage meetings have been held in Europe and business plans are being developed by customers.

-- Several opportunities are being developed in Ireland. Landfills, medical waste, and the processing of contaminated animal materials are currently being pursued with governmental, private, and commercial institutions. The company is working toward expected closures during 2003 to provide acceptable "alternative technology" for the solution of Ireland's environmental problems.

-- Meetings, including an initial demonstration, have been held with a customer from Russia for the processing of mixed industrial hazardous wastes in North Central Russia. Wastes will include oil sludges, acid tars, paints and solvents, used sulfuric acid, and medical waste. We are in the process of submitting quotations.

About Startech Environmental Corp:

Startech is an environmental equipment company whose Plasma Converter is essentially an electrochemical system that, while safely destroying wastes, even hazardous wastes, converts those materials into useful and valuable commodity products. It does this economically, efficiently, with relatively few moving parts, and without combustion.

The prime mover in the Plasma Converter process is the chemical dissociation (decomposition) of the feed materials after which their elemental components (atoms) are reformed into useful commodities. The United States Environmental Protection Agency has designated materials, even if they may have once been regarded as wastes, or hazardous wastes, undergoing such a recycling process, no longer as wastes, but as "feedstocks."

StarCell™ is the company's new, patented hydrogen selective membrane system that separates hydrogen from the PCG™ produced from wastes. PCG is a clean synthesis fuel-gas mixture with many commercial uses. StarCell is not a fuel cell; it is a ceramic membrane filtration system that extracts hydrogen from PCG. PCG contains a large quantity of hydrogen.