Alternative Fuel Systems Inc. and Isuzu-General Motors Australia Limited Complete the First Stage of a Multi-Vehicle Dual Fuel Installation.

CALGARY, Alberta--(BUSINESS WIRE)--Sept. 27, 1999--

Alternative Fuel Systems Inc. (AFS) completes the dual fuel conversion on six of thirteen ISUZU-General Motors (IGM) vehicles, as part of their first major order received from Australia. Warranty coverage provided by IGM on these vehicles is the first of its kind given by one of the big three automotive corporations for diesel to dual fuel conversions. "The backing by warranty of a major automaker on the AFS equipped engines is a key step towards our strategic goal of becoming the preferred global alternative fuel management system provider to engine manufacturers" commented Gerry Klopp, Chief Scientific and Operating Officer.

As announced in the AFS June 30 press release, the City of Unley selected the AFS proven diesel dual fuel (DDF) system for application with the ISUZU 6SD1-TC engine over all competing technologies. On September 5, 1999 the Mayor of Unley and members of council witnessed the Honorable Robert Hill, Minister of the Environment and Heritage, unveil the 5 state-of the-art side-loading compressed natural gas (CNG) powered waste collection vehicles. Unley Mayor, Michael Keenan says the council is happy with the system. "It's a revolutionary new way of moving heavy vehicles around and we are the trial and we expect to be a success, and from here, right across Australia."

The Unley project was procured by IGM's distributor throughout the greater Adelaide area, North East ISUZU (NEI), a leader in truck sales with forty-five percent of the market share. Through an exclusive agreement with AFS, NEI is the only authorized installer of AFS DDF management systems in Australia. All other IGM distributors operating outside the NEI territory will be supplied with IGM warranty covered NEI trucks equipped with the AFS DDF system.

The sixth system has been ordered by Collex, Australia's second largest waste collection company for use in the Adelaide area. The seventh system has been ordered by GL, Australia's largest NG distributor, for testing in the Sydney area. An eighth unit is to be used for marketing in the Sydney area by another authorized ISUZU distributorship. The five remaining systems are to be assembled and shipped in October for use on the 500 new series ISUZU ( 175 HP ) truck.

The potential original equipment manufacturer (OEM) domestic market in Australia for IGM new trucks of this class is in excess of 2500 units annually.

Here in Canada, the ISUZU 6HHI truck equipped with the AFS Eagle II system which recently met low emission vehicle standards (LEV) in Japan will be on display as part of the B.C. Gas Exhibit at the Union of British Columbia Municipalities (UBCM) Convention held at the Vancouver Convention and Exhibition Center September 28th through September 30th. As announced in the AFS April 27 press release, the remarkable pollution reduction levels achieved on the AFS Eagle II equipped ISUZU 6HHI engine were 15 percent to 91 percent below the stringent 13 mode LEV standards set in Japan.

AFS designs, develops and markets advanced technology fuel management and exhaust treatment systems that permit diesel and gasoline engines to operate on clean burning, environmentally friendly compressed natural gas. The innovative Sparrow and Eagle Technologies along with the revolutionary Condor (reverse flow catalytic converter) have positioned AFS on the cutting edge of global efforts to reduce engine emissions.

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