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Hybrid Fuel Systems Issues Fuel 2 Independent Emissions Report; 78.9% PM and 22.9% NOx Reductions Exceed Corporate Targets

TAMPA, Fla.--Jan. 7, 2005--Hybrid Fuel Systems, Inc., ("Hybrid" or the "Company") (OTCBB:HYFS) today announced the independent certified emission results for its Fuel 2(TM) dual-fuel Emission Control technology. The Fuel 2(TM) kit converts medium and heavy-duty diesel engines to operate in a dual-fuel diesel/natural gas mode. The emission readings contained in a report provided to Hybrid by an independent lab titled Emission and Fuel Consumption Data Obtained in Accordance with CARB Retrofit Verification Protocol for On-Road Heavy-Duty Engine Applications to Verify Particulate and NOx Reductions When Operating with The Hybrid Dual Fuel System Using a 2001 Model E7-350 Mack Diesel Engine - January 5, 2005 ("Summary Report") are as follows: 

Calculations        
   are in              
 grams per   Displacement            
   brake      of Diesel    
 horsepower-    with      Non Methane   Carbon  Nitrogen 
    hour     Natural Gas  Hydrocarbon  Monoxide  Oxides  Particulates
 (g/bhp-hr)    (grams)      (NMHC)       (CO)    (NOx)        (PM)
------------ ------------ ----------- --------- -------- ------------
Hybrid's
 Fuel 2(TM)        71.20%      0.211     0.217    3.310        0.019
------------ ------------ ----------- --------- -------- ------------


The emissions report was obtained as part of a process under which the Company is trying to verify their Fuel 2(TM) kit as an Emission Control Device (Verification). In the case of the Verification program currently underway, the granting authorities have published reductions in certain emissions in order to qualify as an Emission Control Device. Principally, this verification process is geared toward reductions in Nitrogen Oxides or NOx and Particulates or PM. The following chart includes the target reductions sought by the granting authority followed by the certified results achieved by our Fuel 2(TM) dual-fuel technology. 

                                                          PM      NOx
----------------------------------------------------------------------
Emission reduction verification targets                    25%     15%
----------------------------------------------------------------------
Hybrid's Fuel 2(TM) emission reduction measurements      78.9%   22.9%
----------------------------------------------------------------------

"While these first official results are very encouraging, it represents only the first step in verifying our technology as an emission control device," said CEO Mark Clancy. "However, these initial results clearly define our product against our two main technology competitors: dedicated conversions and emission traps. Previously, the only reliable means to convert to a natural gas/diesel dual fuel mode was to replace the engine. This is typically a $40,000 capital expense and the new engine must be compatible with an existing fleet. Our Fuel 2(TM) kit retails for $4,500 and can be applied to most existing medium and heavy duty diesel engines," continued Mr. Clancy. "Fuel storage tanks, catalyst and linkage are expected to cost approximately $5,000 taking the total typical cost of a Hybrid conversion under $10,000. Our other technology competitor are emission traps such diesel oxydation catalysts (DOC) and diesel particulate filters (DPF). DOCs capture only about 20% of particulates verse our Fuel 2(TM) 78.9% reduction and while DPF can capture up to 90% of particulates, they require ultra low sulfur diesel to be effective. More importantly, neither DOCs nor DPFs offer any form of fuel savings. Our Fuel 2(TM) kit allows the diesel engine to run on either compressed or liquefied natural gas and diesel. The trends indicate that pump price disparity wherein natural gas is generally cheaper than diesel will continue to grow making natural gas environmentally attractive as well as representing a meaningful fuel savings," concluded Mr. Clancy.

Hybrid was formed in 1996 to commercialize retrofit systems for the conversion of diesel stationary or vehicular engines to non-petroleum based fuels such as natural gas. The Company's technology is based on a series of patents and one patent pending. For more information contact CEO Mark Clancy or visit the Company's website at http://www.hybridfuelsystems.com.