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Alternative Fuel Systems Announces Results of ``Forklift Exhaust Emissions Study''

28 July 1999

Alternative Fuel Systems Inc. Announces Results of One Year ``Forklift Exhaust Emissions Study''

    CALGARY, ALBERTA--July 27, 1999--

Molson Canada Leads the Way by Participating in Test of AFS NG
Sparrow Technology At Edmonton Brewery

    Alternative Fuel Systems Inc. (AFS) Tuesday announced receipt of results of a one year study commissioned by ATCO Gas of Edmonton, Alberta and Gas Technology Canada, to determine whether or not there is a significant difference in exhaust emissions produced by propane powered and NG powered fleets of forklifts.
    ATCO Gas, formerly Northwestern Utilities and Canadian Western Natural Gas Company Ltd., is the largest natural gas distributor in Alberta.
    The "Forklift Exhaust Emissions Study" was conducted by independent contractors at the Molson brewery in Edmonton. Molson's Health and Safety Manager Peter Rochefort said, "Molson Canada is pleased to be the first company to use the new computerized natural gas conversion systems for forklifts from Alternative Fuel Systems. This type of leading innovation has allowed us to not only improve working conditions but also to enhance efficiency in our Edmonton brewery."
    Long term tests conducted at Molson's Edmonton brewery indicate the use of a positive pressure closed loop natural gas system can substantially reduce emissions when compared with open loop propane systems. The study found that the most toxic emissions, NOx and CO were reduced 77% and 76% respectively in Sparrow converted forklifts compared with "just-tuned" propane forklifts. After a period of operation reflecting normal usage, Sparrow-converted forklift emissions were reduced by 97% (CO) and 84% (NOx) when compared with propane systems. All nine 5 tonne front lift Toyota units at the Molson brewery have now been converted with Sparrow systems.
    The results of the Molson study mirror four recent case studies reported by the American Gas Research Institute at U.S. firms which independently chose NG powered forklifts to improve air quality while retaining performance and lowering costs. The improvement in air quality after conversion was dramatic. Non-methane hydrocarbon emissions and CO2, the major greenhouse gas that contributes to global warming, are also substantially reduced compared with gasoline or propane fueled vehicles. Savings in other locations varied by fleet size, ranging from US$7,600 to US$43,000 per year, including added benefits in lower preventative maintenance and equipment repair expenses for NG fueled engines.
    In addition to lowering emissions, NG benefits include improved safety and economics. For the same fuel dollar spent, an NG powered vehicle can travel (on average) 78% further than a gasoline powered vehicle and 36% further than one using propane. NG has an excellent safety record and provides convenient time-saving refueling, using a sealed system with no need to connect and reconnect bottles/tanks. There is no noticeable loss of acceleration or engine performance. Cost reductions in fuel, ventilation equipment and possible fines, plus increased worker productivity, lead to a short payback of the cost of conversion. The AFS Sparrow has very tight fuel control, reliability, and built in self-diagnostics in a compact package that makes for ease of installation.
    There are an estimated 1.6 million forklifts operating in North America. The average cost of an AFS Sparrow NG System is CDN$1800. The indoor engine market includes sweepers and ice resurfacers, which will be additional targets for commercial NG conversion.
    AFS designs, develops and markets advanced technology fuel management and exhaust treatment systems that permit diesel and gasoline engines to operate on clean burning, environmentally friendly compressed natural gas. The innovative Sparrow and Eagle Technologies along with the revolutionary Condor (reverse flow catalytic converter) have positioned AFS on the cutting edge of global efforts to reduce engine emissions. AFS has successfully won contracts in Mexico, China, Iran and Australia and is engaged in ongoing negotiations in many regions of the world including India, Japan, Chile and Europe.
    AFS is listed on the Vancouver Stock Exchange, trading under the symbol ATF.

For Further Information Contact:

Alternative Fuel Systems Inc. Jo-Anne Cappis Investor Relations 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.