China Energy Recovery to build US$11.6M 'world's largest' straw pulp alkali recovery system for Chinese papermaker Shandong Tralin

SHANGHAI , November 7, 2008 (press release) – China Energy Recovery, Inc. (OTCBB: CGYV) ("CER"), a leader in the waste heat energy recovery sector of the alternative energy industry, announced today that it has executed contracts for designing and manufacturing the world's largest straw pulp alkali recovery system in alliance with CMIIC Engineering & Construction Corporation, one of China's largest industrial construction firms. The recovery system is a key part of the Shandong Hai River Basin Pollution Control Project sponsored by the Asian Development Bank. The total project cost is estimated to be RMB95 million (approximately US$13.9 million based on the exchange rate as of date of this press release date), of which RMB79 million (approximately US$11.6 million) represents the estimated cost for the alkali recovery system that CER will design and manufacture leveraging its own technology.

The system is to be built for Shandong Tralin Group ("Tralin"), one of the top paper manufacturers in China. The CER technology will treat the toxic residual black liquor generated from the pulp making process to create cleaner discharge. The system is designed to process 1,200 tons of black liquor per day and expected to enable Tralin to meet the government mandate on minimizing pollutant discharge.

The system is also designed to generate 145 tons of steam per hour. This is equivalent to nearly 12MW of heat energy generation capacity and expected to enable Tralin to reduce the cost of purchasing steam from outside vendors needed to power its paper making facility. Additionally, the system is expected to recover 195 tons of alkali per day, which can be reused in the pulp making process, thus further reducing material costs and bringing multiple benefits to Tralin.

"We expect that the system will be the largest of its kind in the world upon completion and designed and developed entirely based on our own technology. This signifies an important milestone for our further expansion in the market of waste treatment and energy recovery of the paper-making industry both in China and abroad," commented CER Chairman of the Board and CEO, Mr. Qinghuan Wu. "We're pleased to see that both the Asian Development Bank and Shandong Tralin Group have seen the value that CER can bring to them by endorsing our technology and system which we believe can specifically address their problems."

Mr. Wu also commented "With the addition of this project, we have already secured orders with a total contract value of approximately RMB130 million (US$19 million) for 2009. We have seen a steady flow of new business bookings, which we expect will bring continued substantial growth in 2009. Our dual growth drivers of reducing energy costs while reducing pollutants are continuing to drive our growth. The current global economic slowdown does not appear to affect that."

The numbers presented above are total contract values, which include a 17% value added tax and the retainage amount for product warranty purposes, which is 5% of the total contract values and will be recognized as deferred revenues. The numbers presented represent values based on current exchange rates. Changes in the currency exchange rates would result in a commensurate change in contract value.

What is Waste Heat Energy Recovery?

Industrial facilities release significant amounts of excess heat into the atmosphere in the form of hot exhaust gases or high-pressure steam. Energy recovery is the process of recovering vast amounts of that wasted energy and converting it into usable heat energy or electricity, dramatically lowering energy costs. Energy recovery systems are also capable of capturing harmful pollutants that would otherwise be released into the environment. It is estimated that if energy currently wasted by all the U.S. industrial facilities could be recovered, it could produce power equivalent to 20% of U.S. electricity generation capacity without burning any additional fossil fuel, and could help many industries to meet stringent environmental regulations.

About China Energy Recovery, Inc.

CER is an international leader in energy recovery systems, with a primary focus on the Chinese market. CER's technology captures industrial waste energy to produce low-cost electrical power, enabling industrial manufacturers to reduce their energy costs, shrink their emissions footprint, and generate sellable emissions credits. CER has deployed its systems throughout China and in such international markets as Egypt, Turkey, Korea, Vietnam and Malaysia. CER focuses on numerous industries in which a rapid payback on invested capital is achieved by its customers, including: chemical, petro-chemicals, refining (including Ethanol refining), coke processing, and the manufacture of paper, cement and steel. CER continues to invest in R&D and plans to build China's first state-of-the-art energy recovery system research and fabrication facility to allow it to meet the increased demand for its products and services.

For more information on CER, please visit: http://www.chinaenergyrecovery.com/s/Home.asp.

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