AFS Completes Second Shipment to DaimlerChrysler Licensee, IDEM

    CALGARY, Jan. 30 -  Alternative Fuel Systems Inc. (CDNX:
ATF) ('AFS') announced today that it has shipped the second installment of
Sparrow Systems worth $825,000 to DaimlerChrysler licensee, IDEM.  The engine
manufacturer will install the Sparrow IM Systems at the factory for sales to
chassis manufacturers.
    The Sparrow IM is an electronic engine management system that enables
base diesel engines to operate cleanly and efficiently using natural gas. With
a fully integrated electronic spark ignition system, the AFS Sparrow is
designed to provide optimal performance under all operating conditions.
    AFS President John C. Anderson stated that he was "very pleased" with the
way the IDEM project was proceeding.  "Not only has AFS met all the customer's
delivery deadlines, we have also had quite notable success with the Sparrow's
performance and emissions results in this application", said Anderson.
    As part of the sales agreement with IDEM, AFS is providing emissions
consulting work to help IDEM meet its emission targets.  The Sparrow System,
which already provides significantly better emission results than the base
engine, creates even better emission results when combined with an AFS
designed catalytic converter system.  Using the Sparrow System and catalytic
converter, NO(x) was reduced 95%, from 14.40 g/kWh of the base diesel engine
to 0.71 g/kWh.  This is 90% below the 7.00 g/kWh specified for NO(x) under the
EURO II Emissions Standard.  Total hydrocarbons produced were lowered from
2.80 g/kWh to 0.04 g/kWh, well below the 1.10 stipulated under EURO II.  The
base diesel engine produced 8.98 g/kWh of CO whereas using the Sparrow, CO was
too low to be measured.  The EURO II Standard for CO is 4.00 g/kWh.
    "By creating a catalytic system designed to work with natural gas
engines, AFS was able to reduce emissions significantly while providing better
power and torque than the base diesel engine", said Anderson.  "Not only are
these emissions reductions far better than required under EURO II, they also
put IDEM in a great position to meet the more stringent EURO III Standards
scheduled for future implementation."
    Alternative Fuel Systems Inc. is an environmental technology company
providing innovative solutions to the global engine exhaust emissions problem.
AFS has developed and commercialized electronic engine management technologies
that enable diesel and gasoline engines to operate using natural gas.  AFS is
also at the forefront of research into exhaust aftertreatment technologies and
hydrogen-based engine systems.  AFS is headquartered in Calgary, Canada and
trades on the CDNX as ATF.
    The Canadian Venture Exchange Inc. has neither approved nor disapproved
of the contents of this news release.
    Visit our website at: http://www.afsglobal.com