Alternative Fuel Systems Inc. (CDNX: ATF) (“AFS”) announced today that
the company has been awarded two more patents in the United States for its innovative
products. The latest patents were issued for the Sparrow electronic fuel management
system and for its Reverse Flow Catalytic Converter (“RFC”). The AFS
Sparrow system enables gasoline or diesel base engines to operate powerfully and
efficiently using 100% natural gas and is already in fleet use around the world.
The RFC is part of a joint project between AFS and Matros Technologies to develop
an exhaust aftertreatment product to combat the unique problem of diesel engine
exhaust. The RFC is designed to reduce harmful emissions by up to 80% including
NOX, PM, and Hydrocarbons. The original version of the RFC is currently undergoing
fleet and durability testing. Present U.S. regulations require new aftertreatment
systems to have a minimum 100,000 mile capability without degradation. Development
of a second version of the RFC, with advanced features, is also underway.

In recent engine tests, the Sparrow demonstrated increased power and torque
and reduced emissions in combination with the new Sparrow ignition system. Power
and torque increased more than 10% over the complete base diesel engine operating
spectrum. Emission tests indicate the Sparrow’s ability to meet EURO III emission
levels, which is a significant achievement over most commercially available
natural gas fuel management and ignition systems.

Alternative Fuel Systems Inc. is an environmental technology company providing
innovative solutions to the global engine exhaust emissions problem. AFS has
developed and commercialized electronic engine management technologies that
enable diesel and gasoline engines to operate using natural gas, and is at the
forefront of research into exhaust aftertreatment technology. AFS is headquartered
in Calgary, Canada and trades on the CDNX as ATF.