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Alternative Fuel Systems Inc. Announces Completion of New Engine

24 February 1999

Alternative Fuel Systems Inc. Announces Completion of Breakthrough Technology to Meet the World's Most Stringent Diesel Engine Emission Standards

    CALGARY, Alberta--Feb. 23, 1999--Alternative Fuel Systems Inc. (AFS) has successfully completed the next generation Dual Natural Gas/Diesel System designed for OEM (original equipment manufacture) use with new state-of-the-art, all-electronically controlled diesel engines.
    The new AFS Eagle II (DDF-EGR-RFC) incorporates two important patented technologies, Exhaust Gas Recirculation (EGR) and the Reversing Flow Catalyst (RFC), into the AFS Diesel Dual Fuel (DDF) System to meet tough new EPA, CARB, LEV and Euro III standards.
    In Japan the AFS Eagle II is currently being installed in ISUZU's high-tech all-electronic 6HHI bus/truck engine, with final JARI (Japanese Automotive Research Institute) certification to follow shortly. JARI certification is a prerequisite to application for Japanese government subsidies and support.
    The Eagle II reduces elevated emissions such as NOx (Oxides of Nitrogen), PM (particulate matter), THC (total hydrocarbon) and CO (carbon monoxide) to levels previously unachievable in the diesel engine. The Eagle II test results exceed Japan's tough 13 mode LEV (low emission vehicle) Standards.



                        AFS Eagle II Emission
                     Results Exceed LEV Standards
                        (Grams/Kilowatt Hour)

                               LEV        AFS
                    CO         7.4        1.1
                    NOX        3.6        3.2
                    THC        2.9        2.4
                    PM        0.20      0.056



    "This stunning breakthrough technology is the result of very close cooperation between AFS, ISUZU Motor Company, Zexel Fuel Injection Co., Matros Technologies Inc., Johnson Matthey and Engelhard Corp.," states Paul Newman, AFS Vice President of Engineering. "By applying AFS technologies, the auto industry's newest all-electronic diesel engines can now expect to meet tough new Environmental Protection Agency (EPA), California Air Resources Board (CARB), Japanese Low Emission Vehicle (LEV) and Euro III emission regulations."
    The latest technology developments follow years of road tests, in which hundreds of thousands of kilometers have been logged by AFS's research and development team, AFS's Asian partner ECOS (Nippon Ecology Works System), ISUZU and SENKO. AFS and ECOS believe the time has now arrived for AFS to target major OEMs. Successful integration of AFS systems at the OEM level will establish a major new marketing arena for the company.
    AFS continues to commercialize its patented technologies allowing heavy duty diesel engines to run on cleaner burning gaseous fuels, such as natural gas. This is achieved without compromising power, torque, fuel efficiency and most important, driver friendliness.
    According to Gerry Klopp, President and CEO of AFS, "This latest, highly significant development will assure the dominant role of the diesel engine -- the workhorse of the automotive industry for a century -- will continue well into the new millennium."
    AFS designs, develops and markets advanced technology fuel management systems which permit diesel and gasoline engines to operate on compressed natural gas. The innovative Sparrow and Eagle technologies along with the revolutionary reverse flow catalytic converter (RFC) have positioned AFS on the cutting edge of global efforts to reduce engine emissions.
    AFS has successfully won commercial contracts in Mexico and China, and is engaged in ongoing negotiations in many other regions of the world including India, Japan, Thailand, Chile, and Europe.
    AFS is listed on the Vancouver Stock Exchange, trading symbol ATF.
    For further information please contact:

Alternative Fuel Systems Inc. Gerry Klopp President and CEO 403/262-1833 403/237-7441 FAX E-mail: afsweb@telusplanet.net Web site: www.altfuelsys.com

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