Clean Air Power Launches Subsidiary to Bring Dual-Fuel Technology to the UK Heavy Goods Vehicle Market

SAN DIEGO & LEYLAND, Lancashire, UK--Jan. 2, 20041, 2004--

Collaboration with Foden Trucks Further Underscores Clean Air's Commitment to the UK

Clean Air Power, the premier global technology company delivering affordable, clean power to diesel markets, today announced the formation of Clean Air Power Ltd. and its new production facilities in Leyland, UK. The new company was formed exclusively to produce and market Clean Air's Dual-Fuel(TM) system to UK and European markets. The company's Dual-Fuel technology enables diesel engines to operate on natural gas and diesel fuel simultaneously, achieving impressive gas/diesel substitution rates and significantly lower emissions, while maintaining diesel engine performance.

Clean Air Power is the only company in the world to offer a Euro IV-compliant heavy-duty diesel engine. In cooperation with Foden Trucks, a division of Paccar UK, Clean Air specifically designed its Dual-Fuel system for Foden's Alpha Range of heavy-goods trucks. The Dual-Fuel engine, available through the Foden dealer network, is supported by Foden's extensive service dealer network. According to Eric Hansen, managing director of Foden Trucks, "We have already seen the success of Clean Air's engine technology in meeting strict European emissions standards without sacrificing engine power or efficiency. This is what our customers have been asking for and we are excited to work in conjunction with Clean Air to deliver it."

Since introducing its patented Dual-Fuel technology to the UK market in 2003, more than 100 Dual-Fuel conversions have been completed for customers including William West Transport, LondonWaste, ACC Distribution (Co-op), Warburtons, and Charnwood Truck Services. The Energy Savings Trust (EST), a UK-government-funded organization set up to achieve the sustainable and efficient use of energy in the UK, currently supports Clean Air's engine technology with a 60 percent grant for truck owners who purchase Dual-Fuel installations in the 2003 fiscal year. The EST has indicated significant grant support will be available for the 2004 fiscal year, starting in April.

"We are committed to growing our company in the UK," said Dan Kabel, president and CEO of Clean Air Power. "The UK and continental Europe are major markets for Clean Air in 2004. Our technology specifically addresses heavy-duty truck owners' needs to take advantage of government incentive programs, fuel prices and reduced emissions."

About Dual-Fuel(TM) Technology

Clean Air Power's Dual-Fuel technology enables diesel engines to operate with the low emission benefits of natural gas while retaining the inherent power, efficiency, low cost and long life of compression ignition engines. Dual-Fuel engines operate on both natural gas and diesel fuel simultaneously. During normal operation, the majority of the fuel burned is natural gas, while diesel fuel serves as a pilot for combustion. This combination of fuels produces substantially less oxides of nitrogen (NOx), particulate matter and greenhouse gasses than engines burning only diesel fuel without sacrificing diesel engine performance. Dual-Fuel technology combines the benefits of a diesel engine (quick response to load change, reliability, high efficiency and low cost) with the benefits of a natural gas engine (low emissions and typically lower specific fuel price) to provide a high performance, low emission, cost-effective, cleaner system that may also reduce fuel costs.

About Clean Air Power

Clean Air Power, Inc. is the only global technology company that delivers affordable, clean power to the diesel markets today by enabling natural gas and diesel to burn simultaneously. Today, Clean Air Power's Dual-Fuel(TM), FuelSolution(TM), MicroPilot(R), after treatment, and subcomponent products provide diesel engine performance while lowering emissions. Since 1991, Clean Air Power has focused on achieving impressive natural gas substitution rates while maintaining diesel engine power. With more than 4,000 heavy-duty vehicle and power generation installations worldwide, Clean Air Power leads the industry in meeting even the most stringent emissions regulations without sacrificing diesel's formidable power or efficiency. For more information, visit the company's website: www.cleanairpower.com.