"ThermoFuel Process is a Renewable Energy technology that Converts Municipal Sewage Sludge into a High-Energy Fuel"

LITTLE ROCK, Ark., July 18 /PRNewswire-FirstCall/ -- ThermoEnergy Corporation announced today that the Chinese Patent Office granted the patent for the Company's renewable energy technology known as the ThermoFuel Process ("TFP"). This is the second of the Company's patent applications to be granted in China. The Enhanced Biogas Production process ("EnBP"), received a Chinese patent in 2006. TFP will allow new or existing wastewater treatment plants in China to convert their sewage sludge into a high-energy fuel, while at the same time, enhancing the recovery of ammonia from the plants digesters to make a commercial grade fertilizer.

TFP is a hydrothermal process that utilizes heat and pressure to convert sewage sludge, a by-product of municipal wastewater treatment plants, into a high-energy fuel. When either TFP or EnBP are combined with the Company's enhanced ammonia recovery technologies, it will mark the first time that municipal wastewater treatment plant operators will be able to eliminate their primary waste by-products totally on-site. Nothing will leave the plant but clean water and saleable commodities in the form of a high-energy biomass- derived fuel and a commercial grade fertilizer.

"This represents a seminal event for the Company," said Dennis Cossey, CEO of ThermoEnergy. We have been developing a China Strategy ever since Alex Fassbender, the Company's EVP and Chief Technology Officer, accompanied Secretary of Commerce Guiterrez on a trade mission to China in November of 2006. The issuance of the TFP patent will allow the Company to begin implementation of this strategy."

According to Fassbender, "China's massive and accelerating economic growth over the past two decades has generated acute environmental challenges, especially where water is concerned. However, the complexities of doing business in China are well documented, and the Company adopted a 'take-it- slow' approach to doing business in China until the patents for its key water/wastewater treatment technologies were granted by the Central Government."

The US Department of Commerce's 2005 report entitled Water Supply and Wastewater Treatment Market in China projects that China will spend upwards of (US)$22 billion on water and wastewater infrastructure by 2013. The Company is currently in negotiations with a Chinese entity to jointly market the Company's proprietary and patented water technologies within China.

About ThermoEnergy

ThermoEnergy, along with its subsidiary company CASTion Corporation, is an award winning company, with offices in Arkansas, New York, Massachusetts, Florida, Louisiana, Ohio and California. The Company provides customized turnkey systems for the treatment and processing of municipal and industrial wastewater, chemical recovery, water conservation, and renewable energy. The Company offers a comprehensive range of products and services including vacuum distillation, evaporators, reverse osmosis, ion exchange, oil/water separators, water use reduction, hydrothermal processing and related water management services. In addition, the Company is developing an advanced power plant design that combusts fossil fuels and biomass with zero air emissions and carbon capture capability. The Company's customer base includes municipal, military, power generation, mining, food processing, beverage, automotive, chemical process, refining, micro-electronics, heavy manufacturing, textile and semi-conductor industries; with successful process installations in the US, Japan, Canada and Mexico. Its client list includes many Fortune 100 companies. Additional information on ThermoEnergy and its CASTion subsidiary can be found on the following websites: http://www.thermoenergy.com and http://www.castion.com.

This press release includes statements that may constitute "Forward Looking" statements, usually containing but not limited to words such as "Believe," "Estimate," "Project," "Expect" or similar expressions. Forward Looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the Forward Looking statements. Factors that would cause or contribute to such differences include, but are not limited to continued acceptance of the Company's products or services in the marketplace, competitive factors, changes in regulatory environments and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission. By making these Forward Looking statements, the Company undertakes no obligation to update these statements for revisions or changes.