Municipalities on surface water step up water treatment systems to improve public health, increasing level of protection from exposure to Cryptosporidium and Giardia

ZENON membranes are physical barrier to preventing microbial contamination, company receives orders in excess of $30 million for its technology

OAKVILLE, Ontario, July 26, 2004 – In an effort to provide a larger margin of safety against microbial outbreaks from drinking water, two communities in the State of Pennsylvania (Lancaster and Charleroi) have purchased ZENON membrane systems. For the same reason, the City of Thunder Bay, Ontario will be building a new drinking water plant that will treat 30 million gallons of water per day (MGD or 113,550 m3/day) also using ZENON’s technology (TSX: ZEN and ZEN.A; OTC: ZNEVF and ZNEAF).

Thunder Bay, North Western Ontario’s largest city, had a wake up call in 1997 when part of the City (Thunder Bay South) was placed under a ‘boil water’ advisory as a result of Giardia contamination in the drinking water supply (from Loch Lomond an inland lake). At the time, ZENON quickly built and delivered an interim membrane based water treatment plant treating approximately 10 MGD (37,850 m3/day). Currently, the City operates two drinking water plants – one using membranes (Loch Lomond) and the other (Bare Point) using conventional direct filtration technology. By the end of 2005, the City of Thunder Bay will have built the second largest ZENON membrane filtration plant in the province, which will eventually replace the two existing plants for this community of 100,000+ people.

"We needed to ensure that we would be able to meet new water quality standards that may be introduced in the future," said Doug Scott, Manager of Engineering for the City. "Experience with our first ZENON plant showed us that membranes can meet any problems that can arise, therefore, it wasn’t very difficult to choose ZENON again. Also, it’s great to see that the technology is now very cost competitive with conventional systems and provides a higher margin of safety for parasites like Cryptosporidium and Giardia, as compared to conventional systems."

In the United States, new, more stringent water treatment and disinfection rules are set to come into effect January 2005. The main purpose of the new regulations is to improve control over microbial pathogens. In light of this, the City of Lancaster and the Authority of the Borough of Charleroi decided to undertake extensive evaluations comparing membrane technology to conventional, particularly because they both had surface water as the source. Parasites such as Cryptosporidium and Giardia are quite common in most surface water (rivers, lakes and streams) and Cryptosporidium is also highly resistant to chemical disinfectants. Both can result in flu-like illnesses and in some cases can even cause death.

According to the Director of Public Works for the City of Lancaster, Charlotte Katzenmoyer, the two plants in the area were aging and needed significant upgrades. After an aggressive piloting program with different technologies, they chose ZENON membranes to relieve concerns with respect to water quality compliance and to protect their residents from any possible microbial contamination. "We were very pleased with the performance of the ZENON membranes during the pilot process," commented Ms. Katzenmoyer, "they performed very well when compared to others."

Other significant factors in their final decision were cost competitiveness and a proven technology. "ZENON came out on top with both," continued Ms. Katzenmoyer. "In particular, we were looking for reference sites that were using surface water as the source and ZENON had a number of such sites."

The City’s Conestoga Water Treatment Plant currently treats 12 MGD (45,420 m3/d) and the Susquehanna Water Treatment Plant currently treats 24 MGD (90,840 m3/d). Additional areas will be constructed on both sites to house the new membranes. In order to continue servicing its communities, both conventional plants will operate until the beginning of 2007 when the membrane plants will be set for completion.

The Authority of the Borough of Charleroi had similar concerns in meeting future water quality regulations with their existing conventional water treatment plant. After pilot testing pressure membranes vs. vacuum driven membranes, "ZENON’s UF (vacuum driven) membranes had less operational problems than the pressure system," according to Ed Golanka, General Manager of the Authority. "They also gave us a very high level of comfort in terms of providing reliable drinking water because they’re a positive barrier to contaminants."

ZENON is a world leader in providing advanced membrane products and services for water purification, wastewater treatment and water reuse to municipalities and industries worldwide.

In 2004, ZENON Environmental was ranked as Canada's top Corporate Citizen by Corporate Knights, a business publication addressing corporate responsibility. This is the second time that ZENON has been selected to lead as Canada's top Corporate Citizen.

ZENON has also been selected as one of Canada's Top 100 Employers for the fifth consecutive year. An S&P/TSX Composite company, ZENON Environmental Inc. trades on the Toronto Stock Exchange under the symbols ZEN and ZEN.NV.A; and on the OTC under the symbols ZNEVF and ZNEAF. Additional information is available at the Company's web site www.ZENON.com.

The above release was issued today. For more information contact:

Ellen Mellody
GE Water & Process Technologies
215.942.3307