KleenAir Receives Highest U.K. Government Funding Level

IRVINE, Calif.--March 25, 2004--KleenAir Systems Inc. (OTCBB:KAIR) announced that the Energy Savings Trust (EST) in the United Kingdom, in their restructuring of their emission control funding grants, has created a new category for KleenAir products and awarded that category the highest level of grant funding at a subsidy of 75 percent.

This category is called SCRF, which consists of a combination of KleenAir's Selective Catalytic Reduction systems (SCR) combined with its particulate reduction system (F). Because the combination system addresses both NOx and particulates, this combination achieves the greatest level of emission reduction in a single system. The current listing is in conjunction with Dinex Exhaust Ltd., KleenAir's European systems integrator.

"Our long-term goal has been often stated as creating a system that addresses all the key pollutants of automotive exhaust," said Lionel Simons, president, "and it is gratifying that our focus on testing and commercializing such a system has now paid dividends which should result in significant orders in the near future."

Other technologies have been downgraded from the previous general 75 percent level. For example, LPG systems are now listed at 50 percent, engine re-powers at 50 percent, Diesel Oxidizing Catalysts at 25 percent, Particulate Filter retrofits at 60 percent. On the other hand, SCRF upgrades are listed at the 75 percent subsidy level.

The immediate programs for which the company anticipates applying are the London Taxi upgrade and London bus retrofit programs for which KleenAir's SCRF systems have been in place for some time. Funds will be made available as of April 1, 2004 under the new U.K. budget for EST that was previously suspended in October 2003.

KleenAir is at the cutting edge of automotive emission reduction technology, including Selective Catalytic Reduction (SCR), Diesel Particulate Filters, Diesel Oxidizing Catalysts and advanced catalytic technology that significantly reduces nitrogen oxides, carbon monoxide, hydrocarbon and particulates. These pollutants have been shown to be a major contributor to heart and lung disease.

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The statements contained in this release and statements that the company may make orally in connection with this release are not historical fact and are forward-looking statements within the meaning of the private securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements, as such statements involve risks and uncertainties that could significantly impact the company's business and the actual outcome and results may differ materially.