Alternative Fuel Systems Inc. ('AFS') announced today that in an effort to make a contribution to the dramatic reduction in the effects of engine pollution around the world, it is undertaking a research program to develop a new internal combustion engine hydrogen fuel management system, which will allow internal combustion (I.C.) engines to run efficiently using hydrogen as a fuel. AFS has incorporated a new company, H2 Fuel Inc., a wholly owned subsidiary of AFS, to capitalize the new development effort. AFS has achieved zero to extremely low levels of NO(x) and hydrocarbons operating a 6-cylinder inline 11-litre diesel engine on 100% hydrogen and on a combination of hydrogen mixed with natural gas. These emissions were achieved using a specialized proprietary developmental system