July 2, 2002

News Release: New fuel cell stack for mobile applications up to 5 kW

Palcan Fuel Cells Ltd. (TSX Venture Exchange - PC)
VANCOUVER, July 2 /CNW/ - Palcan announced today that it has achieved its
target for release of a new fuel cell stack which optimizes system performance
for vehicle and portable products in the 1 kW to 5 kW range. The new water
cooled stack achieves excellent power density while retaining Palcan's
philosophy of low fuel pressure to achieve the most favorable combination of
cost, size and efficiency within a complete fuel cell system.

Palcan's new stack targets a wide range of applications requiring a
compact and efficient PEM fuel cell power system. Markets include scooters,
forklifts and neighborhood electric vehicles as well as portable and backup
power systems. Palcan will offer the stacks separately or integrated into the
company's line of PalPac(TM) Power Products.

The first commercial demonstration of the new stack is scheduled for this
fall within the collaborative agreement with Celco Profil of Italy. Celco's
electric scooter is presently being modified in Palcan's shop to prepare for
installation of the fuel cell system.

"This is a significant milestone for our R&D group which compliments our
air cooled systems and keeps us on schedule for the expansion of our stack and
PalPac(TM) lines up to the 5 kW level. We now have a solid and unique base of
optimized core technology with an even wider range of markets available for
near term commercial product launch," stated Palcan President and CEO Jim
McBeth.

About Palcan
Palcan is a leading developer and manufacturer of proton exchange
membrane (PEM) fuel cells and metal hydride hydrogen storage products.
Palcan's proprietary and patent pending technologies form the core of the
PalPac(TM) Power Products a unique and integrated fuel cell power system.
Palcan's PalPac(TM) fuel cell systems are a reliable and clean environmental
alternative to replace batteries and small internal combustion engines in
global consumer and commercial products such as electric scooters, personal
neighborhood vehicles and many portable power products. The company's
manufacturing and research and development facilities are located in Burnaby,
British Columbia.

Palcan Fuel Cells Ltd.

"signed"

Jim McBeth
President

Certain matters discussed in this press release may contain forward-
looking statements that may involve risk and uncertainties. Investors are
cautioned that all forward-looking statements involve risks and uncertainties,
including but not limited to; product development delays, the ability to
attract and retain business partners, competition from other fuel cell
manufacturers, competition from existing power technologies, and the ability
to provide the capital required for product development, operations and
marketing. Investors are encouraged to review the Company's filings on SEDAR
at www.sedar.com

The TSX Venture Exchange has in no way passed upon the merits of the news
release.
%SEDAR: 00005098E

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For further information: please contact: Palcan Fuel Cells Ltd., Daniel
Gallagher, Corporate Communications, Tel: (604) 422-8868, E-mail: mailto:
This email address is being protected from spambots. You need JavaScript enabled to view it., URL: http://www.palcan.com

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