Bion's waste treatment technology has been reviewed and approved by thePennsylvania Department of Environmental Protection (PA DEP) to generateapproximately 140 nutrient credits per milk cow's waste treated. Bionanticipates the sale of these credits under PA's nutrient credit tradingprogram and they are listed on the PA DEP's Nutrient Crediting Trading websiteat www.dep.state.pa.us/river/Nutrient%20Trading.htm#Registry.

The PA DEP nutrient credit program is unique in that credits can begenerated from a non-point source discharger such as a dairy farm, and thesecredits can then be sold to a point source discharger, such as municipal wastetreatment plants (MWTPs). The key to the credit trading program is that itallows lower-cost nutrient reductions from agricultural operations to offsetmuch more expensive 'last mile' reductions from MWTPs and other point sources,providing an equally effective reduction in overall nutrients, but utilizingmuch more cost-effective solutions.

The non-point to point source trade mechanism is critical to the successof reducing nutrient loading into Pennsylvania's waterways and ultimately theChesapeake Bay because non-point sources contribute more than 50% of thedelivered load of nutrients into the Bay. Pennsylvania needs to reduce itsannual nitrogen discharges to the Chesapeake Bay by 7.5 million pounds. Otherunique aspects of Bion's nutrient credit approval in Pennsylvania include:

-- Bion was able to generate these credits at Kreider Farms because oftheir unique ability to verify nutrient reductions, which traditionally hasbeen a key impediment to the advancement of these types of non-point to pointsource trades. The PA DEP reviewed and approved Bion's nutrient creditverification plan (sampling and measurement definition) as a part of thecredit approval process. Bion is the only company that has received nutrientcredit approval for the installation of an on-site livestock waste treatmentsystem, as well as the issuance of nitrogen credits for ammonia emissionreductions.

-- More than 40% of the nutrient credits Bion is receiving for itsKreider Farms project will be generated due to its ability to reduce ammoniaair emissions. This is a key advancement for the industry in verifying thelinkages between ammonia air emissions and downwind nitrogen deposition innearby waterbodies.

In addition to generating nutrient credits, Bion's Cleantech project atKreider Farms will produce:

-- renewable energy by combusting the biomass captured in the dairy wastestream as well as the poultry litter from Kreider Farm's poultry operations.

-- greenhouse gas emission credits from significantly reduced methaneemissions associated with Bion livestock waste treatment process, and

-- stabilized nutrient rich fertilizer (low leachability) generated as aby-product from the dairy waste treatment process.

Absent a trading program where least-cost nutrient credit trades can takeplace, the municipal waste treatment plants would continue to spend excessiveamounts of ratepayer dollars to upgrade their facilities. Simultaneously,non-point sources, with their extremely concentrated waste streams, would beunable to generate the revenue to fund these on-farm nutrient reductionprojects. Using a trading program, the marketplace can determine the mostcost-effective location to reduce nutrients and the environment will receivethe same net benefit. While Pennsylvania's nutrient credit trading programrules are unique in their ability to maximize nutrient reduction costefficiencies by bringing non-point source dischargers into the program, it isimportant to note that many states are also moving in this same direction,including Ohio, Virginia, Maryland, and many others.

In addition to the municipal wastewater treatment market for credittrading, Bion believes that its ability to certify nutrient credits isapplicable to a wide range of other applications whereby regions or watershedsare seeking a least cost means to reduce nutrients that are discharged intothe environment. For example, the electric power industry is now beingchallenged with increasing nitrogen concentrations in their wastewatereffluent as they continue to push more of the nitrogen away from theirsmokestacks. A recent Electric Power Research Institute (EPRI) documentacknowledged that as air pollution control devices have advanced in their NOxreduction efficiency, there is a corresponding impact on increased nitrogen inplant effluent that must be managed at the same time.

Mark Smith, Bion's president, stated, "Part of Bion's opportunity is basedon the company's ability to clean-up the waste streams from existing livestockfacilities and to certify nutrient (and other) credits for a wide range ofapplications in regions or watersheds that are seeking least-cost methods toreduce discharges and emissions. Bion believes that its ability tosubstantially reduce ammonia air emissions and nitrogen and phosphorusdischarges from livestock waste streams can provide a source of credits tooffset point source discharges in a manner that makes both economic andenvironmental sense."

About Bion: Bion has provided solutions to the agriculture and livestockindustry since 1990, with 30 first-generation systems installed through 2003.Bion's next-generation technology results from 18 years of research &development, testing, commercial deployment, and further adaptation toevolving standards and opportunities. In addition to providing provencomprehensive environmental treatment, the system recovers cellulosic biomassfrom the waste stream to produce renewable energy in a process different andmuch more efficient than others that seek to exploit this energy source. Thetechnology is scalable, proven and quickly gaining acceptance by regulatoryagencies and other stakeholders as an effective solution to the environmentalissues associated with concentrated livestock waste. For more information,see Bion's website: www.biontech.com.

This material includes forward-looking statements based on management'scurrent reasonable business expectations. In this document, the word'potential', 'will', 'proposed' and similar expressions identify certainforward-looking statements. These statements are made in reliance on thePrivate Securities Litigation Reform Act, Section 27A of the Securities act of1933, as amended. There are numerous risks and uncertainties that could resultin actual results differing materially from expected outcomes.

SOURCE Bion Environmental Technologies, Inc.