HyPower Develops Hydrogen Technology to Power Vehicle from Water.

WILMINGTON, Del. -- HyPower Fuel Inc. (OTCPK:HYPF) is pleased to announce that the company has equipped a Volkswagen GTi with its H2 Reactor (H2R) hydrogen system that can produce sufficient hydrogen on board, on demand to power the vehicle using only water. The H2 Reactor uses the process of electrolysis to convert water into a hydrogen/oxygen gas which is then used to power its original internal combustion engine.

HyPower believes that its H2 Reactor's electrolysis process is the most efficient to date with an unprecedented ratio of hydrogen production to electrical input. Currently the H2 Reactor requires 1 watt hour to produce 1 liter of hydrogen. This is approximately 2 to 2.5 times more efficient than the current performance of competing technologies.

"This is an extremely significant advance in that a vehicle with a standard internal combustion engine can be powered with hydrogen produced onboard as needed. Other hydrogen vehicles require special storage tanks to supply the highly compressed gas to the engine. This is not yet a practical application as there are simply very few available refueling stations for these vehicles," said Mr. Doug Bender, President of HyPower.

"We have now successfully created a situation where a car could run on water and produce virtually no harmful emissions or greenhouse gases. We will continue to beta test the H2R system to strive for increased efficiency," Mr. Bender added.

Management is quick to point out that these are preliminary laboratory results using prototype H2R units and will require considerable improvements before any practical transportation application can become a reality. The company plans to host a number of live demonstrations in early 2007 with independent experts in attendance to monitor and verify resulting data.

"This new technology, used in conjunction with this vehicle is to us like the Kittyhawk was to the Wright brothers. It didn't fly very far but it was a start and paved the way to modern aviation as we know it today," exclaimed Doug Bender.

About HyPower Fuel, Inc.:

HyPower Fuel, Inc. is a category leading company in the energy technology sector, focusing on providing innovative alternative energy through hydrogen production and hydrogen related products. HyPower has successfully commercialized the integration of hydrogen production and hydrogen insertion technologies using electrolysis to improve the overall performance and efficiency of the internal combustion engine while burning gasoline, diesel, natural gas, liquid propane, ethanol, methanol or a combination of fossil fuels and biofuels. HyPower's signature product, the Hydro Power Pak (HPP), has demonstrated a significant impact on the performance of engines while at the same time increasing fuel economy, significantly reducing harmful emissions, inducing a cleaner more efficient burn, and increasing torque and horsepower. The HPP results in greater productivity, less carbon residue and sludge build-up and overall increased operating efficiency. HyPower is also engaged in the research and development of hydrogen production technology and biofuel products.

For more information please contact Investor Relations at [phone] or visit: www.hypowerfuel.com.

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