Orbital and Major Car Company Achieve ULEV II Emissions and Improved Fuel Consumption With Lean Burn DI Technology

    PERTH, Australia, Aug. 7 Orbital today
announced that it has passed another critical milestone in the development of
its Orbital Combustion Process (OCP) direct injection technology.  In a joint
development program with a major car company, a test vehicle achieved the
stringent ULEV II emissions standards in combination with a significant
improvement in fuel economy.  The emissions results have been verified
independently at the customer's vehicle emission laboratory.
    After only 8 weeks of vehicle calibration development, the test vehicle
achieved a fuel economy improvement in excess of 12% over the Federal test
cycle while meeting the ULEV II emissions requirements.  The ULEV II standards
are one of the most stringent emissions requirements proposed in the United
States and are due to come into force starting in 2004.  The testing was
carried out on a US sedan fitted with its standard 4-cylinder engine utilizing
Orbital Direct Injection (DI).  The vehicle inertia test weight was 1474 kg.
    Commenting on the results Orbital CEO Kim Schlunke stated "We have been
working very successfully with this customer over the last few years, and this
vehicle result represents, in our experience, a unique capability for direct
injection technology with respect to Federal emissions requirements.  To take
full advantage of this capability the United States government needs to commit
to lowering the sulphur levels in the fuel, as already committed to in Europe.
The precedent for low sulphur fuels as a technology enabler for similar after-
treatment systems has already been set in the US with the introduction of low
sulphur diesel fuel already legislated for in 2004.  We see the move to low
sulphur gasoline as inevitable as all catalyst systems are somewhat sulphur
sensitive, especially in the stringent US emissions environment.  In the
interim Orbital have developed a conventional catalyst solution as part of the
global strategy for OCP introduction."
    Importantly the test results were achieved with minimal changes to the
baseline engine to incorporate the OCP spray guided direct injection system,
and with no changes to the baseline vehicle specification.  The catalyst was
developed in conjunction with Johnson Matthey, one of the world's leading
producers of automotive catalysts.
    Mr. Schlunke noted that the test vehicle did not include all of the latest
developments of the OCP system.  "With the incorporation of these latest
developments this single technology change could deliver fuel economy benefits
of up to 20%, while cost effectively meeting the foreseeable emissions
requirements of the United States, Europe and Japan.  With further engine and
vehicle related enhancements we will exceed the threshold to qualify for
Alternative Motor Vehicle Credits under the new US energy bill."
    "This supports Orbital's strategy of developing a global technology that
delivers improved fuel economy and meets the toughest future emissions
standards in the world, so that it can be applied to the next generation of
global engine platforms.  We expect that the total number of engine platforms
will be rationalized and our customers are looking for truly global technology
solutions," said Mr. Schlunke.
    Improved fuel economy is particularly important to Orbital's automotive
customers as they look to future requirements for greenhouse gas reduction in
the global market.  In the US, Orbital's technology could enable the major
automotive companies to significantly boost their Corporate Average Fuel
Economy (CAFE).  Importantly these fuel consumption improvements can be
achieved without downsizing the vehicle.  Vehicle downsizing is a proposed
solution to improving CAFE, however the safety issues of smaller vehicles in
the US market are considered unacceptable in the current climate.  In Europe
the major automotive companies have already committed to a vehicle fleet
average CO2 target, which will require on average a 35% reduction from current
fleet fuel consumption figures by 2008 and will inevitably require DI gasoline
engines as part of that reduction.
    The approval last week by the US House of Representatives of a new energy
bill that incorporates tax credits for motor vehicles using Alternative Lean
Burn Technology will assist in the take up of lean burn direct injection
technologies such as that developed by Orbital.  Under the bill Alternative
Lean Burn Technology motor vehicles will attract a tax credit starting at
US$1000 if they achieve in excess of 125% of the 2000 model year city fuel
economy and meet other criteria.
    Orbital is a leading international developer of engine technologies using
direct in-cylinder fuel injection and lean-burn systems for enhanced fuel
economy and lower emissions.  The company serves the worldwide automotive,
marine, recreational and motorcycle markets.  Headquartered in Perth, Western
Australia, Orbital stock is traded on the Australian Stock Exchange (OEC), the
New York Stock Exchange (OE) as well as the Berlin (ORE) and Frankfurt (OREA)
Exchanges.

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