Clean Diesel Technologies Inc. Raises $5.2 --pound- 3.6- Million and Lists On AIM.

Business Editors

STAMFORD, Conn.--(BUSINESS WIRE)--Dec. 27, 2001

Clean Diesel Technologies Inc. (EBB:CDTI)(AIM:CDTS)(AIM:CDT) announced that it has raised $5.2 ((pound)3.6) million by public offering in the United Kingdom and all its stock is now listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

The company has issued 2,580,664 new Common Shares at $2 ((pound)1.40) per share in this placement. These Placing Shares are placed in reliance on Regulation S under the U.S. Securities Act and because they are subject to transfer restrictions for a period of time, may not be resold to persons in the United States or to U.S. persons but may otherwise be traded in the United Kingdom without other restrictions.

These shares are allocated ticker CDTS. Over a period of up to two years the U.S. transfer restrictions expire and the CDTS designation will disappear and the Placing Shares will also then trade under the ticker/symbol, CDT.

At the same time, holders of the Convertible Preferred Stock have converted the entire holding of Preferred Stock into 5,934,829 Common Shares; these shares and the existing 2,698,787 Common Shares are not subject to any transfer restriction and are allocated ticker CDT on AIM and will continue to trade in the United States on the Electronic Bulletin Board under the symbol CDTI.

Following the placing and conversion there are now a total of 11,214,280 Common Shares in issue. At the placing price the market capitalization is $22.5 ((pound)15.7) million.

Chief Executive Jeremy Peter-Hoblyn commented: "The additional funds will be used to substantially increase the company's marketing and sales, to accelerate the commercialization of the company's products and technologies and to pay down the $1 million loan note leaving the company with no debt.

"We chose to list on AIM because of its commitment to advancing the success of its listed companies and, more importantly, because some 75% of our shares are held by British investors. Moreover we are already actively marketing our technologies in the European and international markets and completed the first license agreements in Europe and Japan in 2001.

"The company will continue to market through licensees and distributors in order to make its products and technologies widely available in the important market that is developing worldwide for emissions control technology for diesel engines both new and retrofit.

"Use of the company's products together with technologies now available, make diesel engines as clean or cleaner than petrol or natural gas fired engines whilst diesel engines continue to be 30 to 40% more fuel-efficient."

About Clean Diesel Technologies

Clean Diesel Technologies is a specialty chemical and energy technology company with patented products that reduce emissions from diesel engines while simultaneously improving fuel economy.

Products include Platinum Plus(R) fuel borne catalysts which reduces engine out emissions of particulate (PM), carbon monoxide (CO) and hydrocarbons (HC) whilst improving fuel economy and are also effective for regeneration of diesel particulate filters and the ARIS(TM) 2000 urea injection systems for selective catalytic reduction of NOx.

Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (USA). Such forward-looking statements involve known or unknown risks, including those detailed in the companies filings with the Securities Exchange Commission and the London Stock Exchange, 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.

Note to Editors: Platinum Plus is a registered trademark of Clean Diesel Technologies Inc.