LEHIGH VALLEY, Pa.-- Air Products (NYSE: APD), a global leader in hydrogen fueling station technology and the world's largest producer of hydrogen, and FuelCell Energy, Inc. (Nasdaq: FCEL), a leading manufacturer of efficient, ultra-clean power plants using renewable and domestic fuels for commercial and industrial customers, today announced that construction has commenced on an advanced hydrogen energy demonstration station. The station, funded in part by the United States Department of Energy (DOE), is to demonstrate a tri-generating green energy system capable of providing low-cost hydrogen, electric power and heat from one integrated unit.

The new system will combine FuelCell Energy's Direct FuelCell® (DFC®) power plants with Air Products' advanced gas separation technologies. The DFC system produces reliable ultra-clean electric power and heat for cogeneration, as well as hydrogen for industrial applications and fuel cell vehicles. The system is designed to produce more than 250 kilowatts (kW) of green power and over 135 kilograms (about 300 pounds) of hydrogen per day. The system could provide hydrogen for smaller industrial users who routinely purchase liquid or gaseous hydrogen that currently must be delivered by truck. The DFC system could also be equipped to provide daily hydrogen fueling for approximately 35 fuel cell vehicles.

The tri-generation system (hydrogen, electricity and heat) is designed to operate on renewable fuel sources, such as anaerobic digester gas from industrial or municipal wastewater treatment facilities, as well as readily available fuels, including natural gas and propane. The overall cost of on- site generation of hydrogen via this process has the potential to be significantly lower than other currently available production options, and thus could provide hydrogen and energy at decreased costs.

"This energy station is a tremendous opportunity to be able to offer hydrogen, electricity and heat in one highly efficient system," said Ed Kiczek, senior business development manager-Hydrogen Energy Systems at Air Products. "This technological innovation could also help develop the infrastructure needed to support hydrogen-fueled cars of the future."

The companies completed the design phase of the DOE project in 2006. System construction is expected to be complete in 2007. The unit will be tested at FuelCell Energy and shipped to Air Products for subsequent field demonstrations. Several locations are being evaluated for the field test, which is scheduled to occur before the end of 2008.

Air Products is the lead contractor and system integrator for this DOE demonstration project titled, "Validation of an Integrated System for a Hydrogen Fueled Power Park." FuelCell Energy, a subcontractor on the demonstration project, will be responsible for building the customized power plant component and providing the hydrogen-containing stream for separation. Air Products will construct the equipment needed to separate hydrogen and compress it to the desired pressure levels. The system addresses DOE hydrogen purity requirements for fuel cell vehicles. Globally, Air Products has placed over 65 fueling stations on stream in 12 countries, most recently for mass transit fueling in Beijing, China for buses to be used to shuttle athletes and visitors for the 2008 Olympic Games.

"The HES system will not only help provide the infrastructure for hydrogen re-fueling stations needed for fuel cell automobiles as they advance from demonstration stage to commercialization, but will also meet the current market demand for lower cost hydrogen, thus increasing the value proposition of our DFC products," said Chris Bentley, FuelCell Energy's executive vice president of Government Operations and Strategic Manufacturing Development.

Excluding the demand spike that may result from commercializing hydrogen- fueled cars, the current market for hydrogen is significant with over 50 million tons of hydrogen produced annually worldwide, according to the National Hydrogen Association.