From the summer of 2008, it will operate on Hamburg's Alster river. It is 25 m
long, 5 m wide, and accommodates 100 passengers.

The project called Zero Emission Ships (ZEMSHIPS) is funded by the European
Commission as part of its LIFE-Environment funding programme for environmental
innovation.

As part of the project team PPS' subsidiary, Proton Motor ("PM"), is developing
the propulsion system for ZEMSHIPS' motor using technology, based on its
successful bus fuel cell application. The contract for PM is worth €1.15
million. Staged payments will be made over a 36-month period. ZEMSHIPS is just
one of several public sector funding projects that PM is involved in over the
next six months.

Felix Heidelberg, PPS' Chief Executive Officer, said "The requirement to improve
air quality around major cities and the increasing worldwide acceptance of the
need to reduce carbon dioxide emissions as a defence against climate change are
major drivers of our business.

"Not only will the ship eliminate emissions, it is also much quieter - so a
candlelit dinner on deck will no longer be spoiled by the sound of groaning
engines and the smell of exhaust fumes.

"Our technology matches the needs of the public and private sector alike to
lower fuel consumption and eliminate harmful emissions, while at the same time
improve the efficiency and performance of short distance transport fleets."

Other partners involved in the ZEMSHIPS project include: Alster-Touristik, the
tourist ferry operator; Linde, which will be supplying the hydrogen
infrastructure; the Government of the City of Hamburg, acting as coordinator;
the Hamburg transport authority, Hamburger Hochbahn and Germanischer Lloyd for
certification; as well as scientific institutions from Germany and the Czech
Republic.

PPS, through its subsidiary Proton Motor Fuel Cell GmbH ("PM") has developed and
produced a standard fuel cell module, fuelled by hydrogen integrated with an
energy storage system to create a hybrid electric fuel cell system capable of
providing power during peak demand situations. The market focus is on industrial
applications where 'back-to-base' refueling occurs, on site, at the end of each
shift or work period.

The Group has identified opportunities to replace lead-acid batteries with their
PEM fuel cell systems and has identified niche markets in the materials handling
and mass-transportation sectors where hybrid electric fuel cell systems offer
considerable advantages over conventional engine technology and fuel cell only
drive systems. The Group has identified two initial market segments in which the
Directors believe the advantages of hybrid electric fuel cell systems will lead
to economic benefits for the end user - forklift trucks and buses. In most
cases, vehicles operate within a defined radius or return to central points of
operation.

The many advantages over current commercial alternatives include lower fuel
consumption, longer periods between refueling, shorter refueling, consistent
levels of power delivery and zero harmful emissions.

PM's technology development has been undertaken with the key objectives of
multiple applications and volume production.

PPS listed on the Alternative Investment Market (AIM) on October 31, 2006.