Common Challenge, Collaborative Response

1. Common Challenge, Collaborative Response Exploring New Pathway to Low Carbon Economy Zhongxue Gan Vice Chairman and CTO ENN Group Dec. 3, 2009

2. Asset （100 million RMB） Revenue （100 million RMB） Employee （thousand） ENN Group Overview Annual Growth Rate 35~45%

3. Main Issues Faced by Today’s Coal Industry 1.Environmental Issues • Pollution • GHG Emission • Global Warming 2.Low Efficiency • Mining process • Transportation • Coal-based PoweGen 50％ 40％ 18％ Super-Critical PCCC Transpor-tation Mining 煤炭 • Current problems can not be resolved by any single form of energy; • One integral/systematic solution is needed to solve all these issues.

4. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission d[CO2]emitted/ d[CO2]absorbed=1 [CO2]=280ppm residential Plant Coal

5. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission d[CO2]emitted/ d[CO2]absorbed=1.8 [CO2]=385ppm industrial, residential, and transportation Plant Coal

6. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission d[CO2]emitted/ d[CO2]absorbed=1.35 industrial, residential, and transportation Catalytic Gasification Plant Methane Coal

7. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission d[CO2]emitted/ d[CO2]absorbed=1.15 Bio-fixation of CO2 industrial, residential, and transportation Bio-fixation of CO2 Catalytic Gasification Plant Methane algal residue Coal

8. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission d[CO2]emitted/ d[CO2]absorbed=1 Bio-fixation of CO2 industrial, residential, and transportation Bio-fixation of CO2 Catalytic Gasification Plant Solar H2 Chemical fixation of CO2 Methane algal residue Coal

9. ENN’s Perspective on Carbon Cycle CO2 absorption CO2 emission Bio-fixation of CO2 Bio-fixation of CO2 industrial, residential, and transportation Bio-fixation of CO2 Catalytic Gasification Plant Solar H2 Chemical- fixation of CO2 Methane algal residue 1. Cycle w/ Feedback loop 2. Energy consumption and generation 3. Bio- and chemical Fixation 4. Solar as a complement biomass Coal d[CO2]emitted/ d[CO2]absorbed<1

10. H2 CO2 CO2 Microalgae for CO2 Absorption methane, biofuel 2 ENN’s Clean Energy Process Diagram H2 from renewable energy source O2 H2 3 Methane, methanol, DME, and electricity Catalytic Gasification Methanation Coal 1

11. Catalytic Coal Gasification——Process Coal is pyrolyzed, split, and fully utilized by trans-critical phase changes. Coal/Biomass Water 1. Pyrolysis Fine Chemicals 2. Catalytic Gasification CO2 Micro-Algae 3. Power Generation SNG Water Recycle • Enhanced catalysis gasification process at low temperature is achieved by: • Pyrolysis of coal • Catalyst distribution through transcritical phase change

12. Catalytic Coal Gasification——Progress Competency: 1. SNG, chemicals and power co-production 2. Energy conversion efficiency 75% 3. CO2 emission reduced by 26%; no NOx and SO2 Catalytic Coal Gasification Pilot Plant High CNG yield; low CO2 emission Chemicals ENN CH4 increased by 37% C CH4 E-gas CO2 emission reduced by 26% Lurgi Shell Texco Existing ENN Temperature (℃)

13. Microalgae Bio-fixation of CO2 ——Process Algae harvest Algae Phto-reactors Algae refinery Algae Product Biodiesel High Value products Animal Feeds

14. Microalgae Biofixation of CO2 —— Progress Genetic Engineering Dr. Wu’s team Process Development Dr. Liu’s team Commercialization Dr. Zhu’s team --- Multi-objective Strain Screening Process of High-throughput --- Hectare Demo Units in Northern and Southern China --- Efficient Photobioreactor Cost Reduction Scale Up Optimization ENN0601A Mutagenesis and screening ENN Crystal Wall Tubular PBR --- Genetic Modification --- Optimized Mass-culturing Process --- Innovative Techniques: Current： 30 g/m2/day 40% oil (dryweight) Micro-sized CO2 bubbles Low-cost harvesting Low-cost automated PBRs Low-cost greenhouse lighting and heating for high productivity Selector gene Target gene 固碳 脂肪酸合成 2-year goal： 80 g/m2/day 50% oil Carbon fixation and fatty acid metabolism related genes ENN0601A (Stained with Nile red, un-induced)

15. Hydrogen Production - Chemical fixation of CO2 PEC Electrolyzer Wind H2 Solar Energy 1 2 Solar PV Off-peak electricity PEC Module Electrolyzer Plant Tank Integrating renewable energy with coal resources H2 CH4 Coal conversion HCNG Emissions Reduction Chemical Fixation

16. Hydrogen Production - Progress Solid Polymer Electrolyte (SPE) Water Electrolysis Photoelectrochemical Cell (PEC) • Low cost non-noble electrocatalyst • Low cost alkaline solid polymer electrolyte membrane • Proprietary membrane electrode assembly (MEA) fabrication process • Catalysts responding to both light and electricity • High through-put screening platform for catalyst development

17. Hybrid energy hydrogen Production CO2 algae absorption Mathanation Catalytic Coal Gasification Carbon Capture Power Generation ENN’s Clean Energy Process Diagram

18. CO2 O2 O2 tank Sulfur Tower Generator Gasifier Clean up Air Measure Boiler Air compressor Radon Progress • Continuously running 330 days w/ 20k tons of coal consumed; with a syngas heating value of 850-1100Kcal/m3; • Generator has run continuously for more than 3000 hrs with a total output of 500kwh. Control system UCG Commercial Demonstration in Wulanchabu

19. UCG Pilot gasifer in Langfang Features: 1.The first gasifer to simulate UCG in high pressure conditions; 2.The first gasifier capable of simulating inflow water; 3. The first in-situ observation of gasification process with high temperature camera; 4. In-situ observation of temperature and pressure field of the gasifier and gas concentration at outlet.

20. China’s Commitment to Lower CO2 Footprint for a Better Future ENN can contribute to address the global challenges of climate change and environmental problems. --To reduce CO2 emission per unit of GDP in 2020 by 40 to 45 percent compared to 2005 --To increase forest by 40 million hectares --Renewable and nuclear energies to increase by 15% CO2 reduction by 2020: --Energy efficiency: 3.89 Gt --Solar/bio/Wind energy : 2.12 Gt --CO2 utilization (algae): 0.29 Gt (1.1 million hectares) --Forestation: 0.324 Gt (40 million hectares)

21. External Collaborations Traditional energy: Coal-based ENN Retrofit: Energy Saving and Emission Reduction Renewables: Solar

22. “Tomorrow is Today” We Work Today for Tomorrow. Thank you！ 22