Clean Diesel Fuel Additive/Emissions Trap System, Advanced Diesel Engine Combine To Better EPA's 2004 Air Standards; Tests Run With Major U.S. Engine Maker; Particulate Emissions Cut 90%, Fuel Economy Shown.

STAMFORD, Conn.--(BUSINESS WIRE)--Sept. 25, 1997--Clean Diesel Technologies (NASDAQ:CDTI), a development-stage company, Thursday announced that recent tests of its patented Platinum Plus fuel additive/trap system, conducted with an advanced diesel engine design of a major U.S. manufacturer, cut particulate emissions 90 percent while achieving a more than 50 percent reduction in nitrogen oxides (NOx) in relation to current standards.

The test results were measurably better than the NOx and particulate emission standards for 2004 proposed by the Environmental Protection Administration (EPA).

Those standards were proposed in 1995 under an agreement among the EPA, California Air Resources Board and diesel engine manufacturers.

According to CDT Chief Operating Officer James Valentine, testing was conducted on an advanced-model diesel engine fitted with exhaust gas recirculation (EGR), which, without the additive/trap system, effectively reduces NOx, but significantly boosts particulate emissions.

The test involved three evaluations for emission control and fuel economy: additive alone, with no aftertreatment; additive and particulate trap; and additive combined with a diesel catalytic oxidizer.

He said the latest results "confirmed earlier tests in the U.S., U.K. and the Netherlands showing our additive's ability to cut emissions significantly and improve fuel economy.

"This test also supports our ongoing R&D which demonstrates Platinum Plus' benefits for existing vehicles, whether or not they have been fitted with aftertreatment devices.

"Only a few months ago, Vice President Gore announced a joint industry/government research program to clean up both diesels now on the road and any new-generation vehicle engines," he said. "We believe we already have in hand a technology to help meet that commitment."

To that end, Valentine reported that the company plans to initiate U.S. field trials early next year, using additive/trap-equipped vehicles. He said that CDT also is in discussions with several oil companies that have shown interest in bulk blending of the additive.

Valentine added that, in addition to improving trap performance, "the additive presents an effective way to boost the performance of a diesel catalytic oxidizer in any vehicle equipped with such a device. Most new diesel passenger cars and buses are fitted with such oxidizers. On the other hand, simply by using the additive with bulk fuels, developing countries could almost immediately employ our additive technology to achieve 15 to 20 percent emission reductions without requiring expensive vehicle retrofits."

According to CDT Vice President of Technology Dr. Eric Balles, Platinum Plus was added to test-engine fuel at rates as low as one-tenth those required for other metallic additives. Those higher dosages of other additives, he said, "can lead to irreversible trap plugging and subsequent loss of fuel economy, as well as accelerated engine wear and increases in other harmful emissions."

He cited another problem frequently encountered with traps -- soot clogging. "We found that Platinum Plus consistently helps catalyse the combustion of soot collected in the particulate trap," Balles said, "passively regenerating the system and cleaning the trap."

He added that particulates from vehicles equipped with EGR are typically much drier and difficult to reduce with traditional diesel oxidation catalysts. However, the latest tests of Platinum Plus, which combines synergistically the effects of platinum and cerium, "also confirmed those synergies on an advanced engine fitted with an EGR and an oxidation catalyst.

"In addition to enhancing the EGR's reduction abilities," he said," the additive specifically improved particulate reduction from nine percent for the oxidizer alone to more than 25 percent for the EGR and oxidizer additive systems, while other emission reductions, including NOx, hydrocarbons and carbon monoxide, were simultaneously improved."

Balles indicated that Platinum Plus "would possible afford engine designers a wider range of control options when used in conjunction with advanced oxidizers and/or trap systems."

Clean Diesel Technologies is a development-stage company with patent-protected products that reduce emissions from diesel engines while simultaneously improving fuel economy and power. R&D efforts and products are grouped into two categories: Platinum Fuel Catalysts and NOx Reduction Systems. Platinum Plus is a registered trademark of Clean Diesel Technologies. -0-

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

CONTACT: Allen & Caron Inc.

Mark Alvino (investors)

212/698-1360

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Owen Daley (media)

714/252-8440

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Clean Diesel Technologies Inc.

James Valentine, COO

203/327-7050