Mar. 26, 2004

HTC HYDROGEN THERMOCHEM CORP.

News release

For immediate release

March 26, 2004

"The 2004 Federal Budget is very favourable to R&D Companies"

David Hearn and Associates, federal grant consultants working on behalf of HTC, has provided HTC the following update on the recent Federal budget.

The 2004 Federal budget had several items of note for technology environmental and energy companies in general -- and SR&ED claimers in specific. Here is our fast assessment in plain language:

SOONER INCREASE IN SMALL BUSINESS DEDUCTION MEANS MORE CASH REFUNDABLE SR&ED BENEFITS

The small business deduction limit will increase from $250,000 to $300,000 in 2005 instead of 2006. This will make refundable cash SR&ED benefits available to more companies and reduce the need for strategies such as "bonusing down" to maximize the cash refund.

CCPC OWNERS / INVESTORS GET GREATER ACCESS TO SR&ED BENEFITS FORM THEIR HOLDINGS

Currently, small CCPC's attract SR&ED at a rate of 35%. For R&D expenditures up to $2 million the SR&ED benefit is cash. In cases where a number of CCPC have common ownership, the $2 million expenditure limit must be shared among associated
corporations.

The budget will change this such that a group of otherwise unconnected investors, such as venture capital investors, will no longer have to share the $2 million limit solely because two or more investors collectively have a majority interest in the shares of the CCPC. However the group of investors must not have been formed specifically for the purpose of exploiting this change.

FASTER CCA WRITE-DOWN ON COMPUTER AND NETWORKING EQUIPMENT

Capital cost allowance (CCA) rate for computer equipment will increase to 45 per cent (was 30%), and for broadband, Internet and other data network infrastructure equipment to 30% (was 20%). Applies to acquisitions made after March 22, 2004. The half yearrule will continue to apply in the year of acquisition to restrict the amount of CCA
otherwise claimable.

This measure stops short of faster CCA depreciation rate for all capital equipment assets as had been widely suggested in recent weeks. It will likely drive demand to fibre optic and other telecom network equipment.

VENTURE CAPITAL FOR SMALL BUSINESS

An additional $250 million for venture capital investment by the Business Development Bank. The surprising thing here is that this money did not go to Technology Partnerships Canada (SIZABLE).

SIZEABLE COMMITMENT TO ENVIRONMENTAL TECHNOLOGY DEVLEOPMENT

An increase in the Sustainable Development Technology Canada (SDTC) to aid enterprises to commercialize their environmental products. From the proceeds of the Petro-Canada sale, an increase of $200 million will be provided to SDTC over the next two years, and $800 million in the following five.

SDTC makes non-repayable investments to groups of companies that collaborate to develop / demonstrate new technologies that reduce atmospheric pollution and green house gas emissions.

NO BROAD INCREASE IN REFUNDABLE SR&ED

Unfortunately the budget did not extend refundable SR&ED benefits to all companies. However this issue -- along with a formal method of "assigning"SR&ED benefits to a creditor -- remains the subject of intense lobby pressure by technology industry groups.

NB: The above information is of a general nature and may be subject to change or re-interpretation as budget legislation proceeds through the parliamentary process. The reader is cautioned to consult his / her professional tax advisor for an interpretation of these topics in the context of their specific circumstances of business.

For more information contact: www.hydrogenthermochem.com

HTC Purenergy provides Carbon Management solutions to industry worldwide, from its head office in Regina, Saskatchewan. HTC is a public company, listed on the Toronto Stock Exchange Venture Exchange, trading as “HTC”. The latest corporate news is available on our website at www.htcenergy.com.

The TSX Venture Exchange Inc. does not take any responsibility for the adequacy or accuracy of the information contained in this news release.

For more information contact:

Jeff Allison,

HTC Purenergy

Telephone: (306) 352-6132

Fax: (306) 545-3262

E-mail: jallison@htcenergy.com

HTC Purenergy corporate developments can be followed on http://www.htcenergy.com/ and is traded under the symbol HTC