Cielo Announces Update to Capital Allocation Plans; Continues to Execute Corporate Strategy

Revised Plan Addresses Current Inflationary Environment
Shifts Focus to Research & Development Demonstration Facility

VANCOUVER, BC / ACCESSWIRE / May 12, 2022 / Cielo Waste Solutions Corp. (TSXV:CMC; OTCQB:CWSFF) ("Cielo" or the "Company"), a waste-to-fuel environmental technology company, today announced a revised capital allocation plan to meet its commercial waste-to-fuel facility development goals. The fiscally prudent measure to pause Aldersyde Phase II development is being taken to mitigate the inflated cost of materials, equipment, labour, and services in the current market. Recently issued pre-construction cost estimates of approximately $18MM to $20MM represent an increase of at least fifty percent, with further escalation a distinct probability. The revised plan will continue to focus near-term capital investment on the previously announced 60-litre per hour ("lph"), research and development demonstration ("R&D") facility. This change will reduce exposure to the inflationary cost environment while progressing the Company in the quickest and most cost-effective way to the design of a large-scale commercial facility. Crucially, this path forward will generate data for detailed economic models that will capture waste infeed composition, production volume, pricing, and capital costs to facilitate near-term design of full-scale commercial facilities.

Mr. Gregg Gegunde, Chief Executive Officer and Chief Operating Officer, commented: "Market conditions have changed, and we have responded with an updated capital allocation plan to stay on course with our strategy. We are focusing on the planned 60-lph facility to obtain the data required to continue developing our proprietary technology using multiple waste infeeds to produce fuel. With this data in hand, and by leveraging the engineering completed by Stantec, Cielo will be well placed to design and construct a full-scale commercial facility."

Corporate Strategy Remains Unchanged

Cielo's strategy continues to be the commercialization of its waste-to-fuel technology. The near-term focus is to profitably produce diesel, naphtha, and kerosene from multiple feedstock waste materials. The 60-lph facility is expected to achieve a number of goals to facilitate Cielo's strategy:

• Provide production yields and distillate composition for various infeeds including wood, plastics, rubber, and organic materials;
• Permit analysis to optimize chemical reactions and conversions with added flexibility to operate at an increased range of temperatures and pressures, and the ability to operate multiple reactors;
• Shorten timelines for data capture and demonstrable project economics; and
• Through its smaller scale, allow for more expedient and cost-effective modifications and configurations.

The Aldersyde Facility has been useful to identify the limiting conditions that have historically prevented continuous production. This has given the technical team significant verified data to support the basis for the design of the 60-lph facility. As discussed in the April 18, 2022 press release, the distillate quality and the historical vapor line plugging issues with the existing Aldersyde Facility are understood and have been resolved. The Company anticipates validation of a continuous steady-state production regime by mid-June. The new waste management technology system has exceeded expectations by maximizing the recirculation of the carrier fluid, therefore reducing waste disposal costs and carrier fluid consumption. The Company continues to operate the Aldersyde Facility as the reactor waste solids separation system is further refined and optimized.