Clean Diesel Technologies Reports first Quarter Results.

STAMFORD, Conn.--(BUSINESS WIRE)--May 18, 1998--Clean Diesel Technologies Inc. (Nasdaq:CDTI), a development-stage company, Monday reported results for the first quarter ended March 31, 1998.

The company recorded a net loss of $741,000, or 29 cents per share, during the quarter compared with a net loss of $961,000, or 38 cents per share, for the same year-earlier period. According to the announcement by Clean Diesel Chief Executive Officer Jeremy D. Peter-Hoblyn, the company cut by about half its R&D expenses and reduced G&A expenses.

It has turned its resources primarily to a stepped-up market development program as a two-year series of successful tests in the United States and Europe of its Platinum Plus(R) bimetallic fuel additive and NOx control technologies have wound down. Overall, those tests have demonstrated substantial reductions in diesel exhaust particulates, hydrocarbons and NOx, while increasing the efficiency of various engine particulate traps and filters. Earlier this month, CDT announced results of Platinum Plus tests at Delft Technical University, Netherlands, which showed diesel soot filter performance improvement and lowering of emissions by 95 percent at estimated costs of two to five cents per gallon.

Peter-Hoblyn said that the company "continues to benefit from our cooperative technology agreements with major U.S. engine and emission control equipment manufacturers. As the efficacy of our technologies is repeatedly proved in extensive manufacturer- and university-level testing, we hope to move to an aggressive commercial marketing phase here and overseas by the end of the calendar year."

He added that the company expects to complete later this month the bridge loan totaling $1.25 million previously announced from Stamford-based Fuel-Tech and London-based SG Associates Ltd. and that these monies should enable CDT to fund its requirements until late 1998. The company is actively seeking additional funding sources and continues to believe, though it cannot guarantee, that it will be successful, Peter-Hoblyn said.

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: PFCs and NOx Reduction Systems. Platinum Plus is a registered trademark of Clean Diesel Technologies.

Certain statements in this media 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. -0-

                 CLEAN DIESEL TECHNOLOGIES INC.
                 (A Development-Stage Company)
                   STATEMENTS OF OPERATIONS
                        (Unaudited)
                                                      Period from
                              Three Months Ended     Jan. 1, 1992
                                   March 31,            through
                               1998       1997       March 31, 1998
Sales                       $     --   $ 40,000      $   199,000
Costs and expenses:

Cost of sales                     --     23,000          132,000
General and administrative   451,000    496,000        5,493,000
Research and development     236,000    457,000        5,553,000
Patent filing and
 maintenance                  56,000     75,000          994,000

Loss from operations         743,000  1,011,000       11,973,000
Interest income              (13,000)   (64,000)        (594,000)
Interest expense              11,000     14,000          215,000

Net loss during
 development stage          $741,000   $961,000      $11,594,000

Basic and diluted loss
 per common share           $   0.29   $   0.38              N/A

Average number of common
 shares outstanding        2,517,000  2,512,000              N/A

CONTACT: Allen & Caron Inc.

Mark Alvino (investors)

212/698-1360

Owen Daley (media)

949/252-8440

or

Clean Diesel Technologies Inc.

James Valentine, COO

Scott Schecter, CFO

203/327-7050