-- Plant site selected to be within an industrial park in Jiangsu Province

-- Strong government support, including preferential land selection with

its own railroad extension and $2.23 million government R&D grant

-- New plant will be a world-class one to differentiate CER from its

competition and provide for sustained growth

China Energy Recovery, Inc. (OTC Bulletin Board: CGYV) (ISIN: US16943V2060; "CER"), a leader in the waste heat energy recovery sector of the industrial energy efficiency industry, today announced the completion of its first steps in its strategic initiative to expand production capacity for its sustained growth. After months of site searching, CER has reached the major terms for the building site of its new manufacturing plant, which is located in an industrial park in Yangzhou City, Jiangsu Province that is along the Yangtze River and close to Shanghai.

The new plant will be a world-class, state-of-the-art facility and will be dedicated to developing and manufacturing large-sized and sophisticated waste heat recovery systems and other related energy efficiency equipment to meet the increasing demands from both China and overseas. The new plant will have its own railroad access connected to the main railway system of China directly extended into its workshop. The rail spur will offer CER an advantage over most of its competitors. Along with strong design and engineering capabilities, some of CER's core competences, the rail link is expected to significantly improve transport and delivery convenience, both of which are crucial in customers' decisions for large-to-mega sized systems. All these attributes of the facility are expected to significantly enhance CER's competitiveness in today's markets, where the trend is towards larger-sized systems. The anticipated completion of the initial phase of the plant is in late 2010.

Because CER's business activities fall within the Chinese government's industry guidelines, the local government will provide strong support to the company with various preferential policies that include a government R&D grant. The grant is estimated at RMB15.2 million (approximately $2.23 million), which will be available to CER over time, and is to support CER's development of world-class waste heat recovery and other energy efficiency technologies. With an aim to facilitate CER's future expansion, primarily for export sales, the local government will also give CER an option on another tract of land that is on the banks of the Yangtze River at a currently determined price. Land with direct access to the Yangtze River is a singularly unique resource in China, even scarcer than railroad access.