Alternative Fuel Systems Announces Patented Reverse Flow Catalytic Converter; Revolutionary Catalytic Converter.

CALGARY, Alberta--(AutomotiveWire)--March 16, 1998--Alternative Fuel Systems (VSE:ATF.) (AFS) has introduced a patented reverse flow catalytic converter that has applications for all internal combustion engines including gasoline.

The revolutionary catalytic converter has been jointly developed by AFS and Matros Technologies of St. Louis. The catalytic converter, along with other advanced technologies developed by the Calgary-based company, firmly positions AFS on the cutting edge of the fight to reduce engine emissions, which include greenhouse gases, by providing immediate solutions to pollution problems. This also moves AFS into new markets.

The unique character of the reverse flow converter has brought invitations for AFS personnel to present technical papers at 1998 automotive conferences including the prestigious Society of Automotive Engineers (SAE) International Congress in Detroit, February 23-26, the International Conference and Exhibition for Natural Gas Vehicles in Cologne, the FISITA World Automotive Congress in Paris, and conferences on catalysis in Russia and Italy.

AFS has also developed innovative fuel injection systems for converting gasoline and diesel engines to cleaner burning compressed natural gas (CNG) and propane (LPG).

Four dynamics directly impact emissions from internal combustion engines; the type of engine used, the type of fuel, the method for managing the fuel, and the treatment of engine exhaust.

First, engine emissions can be reduced by changing the type of engine. With hundreds of millions of internal combustion engines powering commercial and consumer vehicles around the world, however, this may be the most impractical method for bringing immediate change.

Second, the fuel can be changed. Compressed natural gas (CNG) is available on a global basis, is easy to manage, is significantly less expensive than other fuels, and is the safest of all fossil fuels. It generates much lower carbon dioxide emissions than other hydrocarbon fuels. Carbon dioxide was a primary issue during the recent conference in Kyoto, Japan.

Next, you can manage the method for delivering fuel to the combustion chamber. AFS responded to this issue by developing two advanced technology fuel injection systems; the AFS Eagle, a multi-point diesel dual fuel management system, and the AFS Sparrow, used for converting gasoline engines to CNG or LPG. Both are simple to install, do not reduce engine power, and increase operational efficiency.

The final challenge has been to develop an after-treatment method for reducing exhaust emission levels to meet stringent local and world standards.

AFS has met this challenge with a catalytic converter which uses a unique process for increasing the temperature within the converter. Increasing the converter temperature significantly reduces emissions to acceptable levels or lower by greatly enhancing the catalytic process. A U.S. Patent has been accepted and a Global patent has been applied for targeting specific countries.

The story began in 1995 when Ed Mirosh, AFS vice president of Marketing, was at a petroleum conference in Houston giving a technical presentation on diesel dual-fuel technology. In the audience was Dr. Yuri Matros, an expatriate Russian scientist who had emigrated to the United States.

Matros's experience included conversion of low heat, high volume exhaust gas streams from chemical plants using a reverse flow concept involving immense catalysts and reversing valves. By modeling these reactions, he was confident he could adapt the process for treating low heat, low volume exhaust gases from engines. The two began a dialogue which resulted in a program of testing and mathematical modeling leading to a patent application in 1996.

Mirosh and AFS engineer Dr. Ming Zheng fine tuned the concept. Further testing was conducted by a University of Alberta team of research scientists, led by Dr. David Checkel, and partially funded by the National Research Council of Canada. No hydrocarbon fuel is completely emissions free, but the AFS reverse flow catalytic converter comes close to eliminating methane and carbon monoxide from the exhaust of hydrocarbon fueled vehicles.

The advanced technology AFS Eagle dual-fuel system has been tested in pilot projects in cities like Tokyo, Sao Paulo, Osaka, Seoul, and Pusan. In Mexico City a project was launched in late December to convert microbuses and other vehicles from gasoline to CNG using the AFS Sparrow. 10,000 vehicles per year over a 10-year period will be converted at a cost of $2,000 each.

Cities like Mexico City, Cairo, Manila, Jakarta, Bangkok, and Santiago, must respond to critical pollution issues caused by vehicular emissions which contribute more than 70% of total air pollution within urban areas. The Mexico City project will provide a model for other cities around the world facing similar pollution problems.

The implications of the hi-tech AFS CNG injection systems as well as the revolutionary reverse flow catalytic converter can hardly be understated. Significantly reducing engine emissions will directly impact global warming caused by emission gases. The innovative Sparrow and Eagle technologies along with the revolutionary reverse flow catalytic converter firmly position AFS on the cutting edge of global efforts to reduce engine emissions. AFS is listed on the Vancouver Stock Exchange, trading symbol ATF Vancouver. -0-

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

CONTACT: Alternative Fuel Systems

Jo-Anne Cappis, 403/262-1833