International Fuel Technology, Inc. (OTC BB: IFUE - news), a clean fuel formulation company, announced today that it has completed final research and development steps on its fuel additive formulae. The testing at Southwest Research Institute (SwRI) showed that fuel blends containing IFT's proprietary additive formulae enabled heavy-duty diesel engines to achieve greater fuel economy and lower rates of harmful emissions as compared to engines using base diesel fuel. The tests also showed IFT's additive formulae significantly enhanced engine lubricity, effectively replacing lost lubricity resulting from use of ultra-low sulfur fuels, which are expected to start replacing existing diesel fuels as early as 2004 or even sooner.

Jonathan R. Burst, Chairman and CEO stated "The ability to blend diesel fuel with substances known to reduce emissions such as ethanol, water or biodiesel has come at the expense of economic effectiveness. The testing at SwRI clearly evidences the ability of our additive formulae to bring these two objectives together. Equally important, the results of the additive-only blend represent an immediate opportunity to enter the market with a product that will work with state-of-the-art fuel blends such as ultra-low sulfur diesel and synthetic diesel."

The objective of the testing program performed at SwRI was to use several different fuel mediums including ethanol, biodiesel, and additive-only to create finished fuel blends to determine the impact of the additive formulae on fuel economy and engine emissions. The following table highlights the results of these tests.

Characteristics
IFUE Fuel Blend Fuel Economy Emissions Lubricity

Performance Diesel
(Additive-Only) Increases fuel economy by 7% Lowers levels of PM, CO2 and NOx 44% greater lubricity; excellent for ultra-low sulfur diesel

Enhanced E-Diesel
(Ethanol/Diesel) Increases fuel economy by 3% PM decrease of 45%, also lower CO2 and NOx Brings lubricity up 35% countering effects of ethanol

Enhanced Biodiesel No loss of fuel economy or power Eliminates NOx increase from soy-based biodiesel, also lower CO2 and PM Superior lubrication for blending with ultra-low sulfur diesel

Aqueous Diesel
(Water/Diesel) No loss of fuel economy or power Lower levels of PM, CO2 and NOx Overcomes lubricity problem

''We are very pleased with the results achieved at SwRI,'' said Ian Williamson, Director of Technical Development. ''Our objective was to create a fuel additive technology that positively alters the chemistry inherent in conventional diesel fuel, and based upon our testing with SwRI and earlier field trials, we have achieved this goal.''

The importance of these results can be seen by extending them onto normal use patterns for vehicle engines. A heavy-duty diesel truck engine operating for 1,500 hours annually (equal to 50,000 miles at an average fuel economy of 5 miles per gallon) using a fuel blend with IFT's Performance Diesel fuel blend (additive with EPA No. 2 diesel fuel), would save approximately 600 gallons of fuel per year. In addition, use of Performance Diesel could eliminate 5.25 tons of carbon dioxide (a critical element in reducing global warming) per year per vehicle.

The testing protocol at SwRI used the Air Resources Board of California (CARB) reference engine, a 1991 Detroit Diesel Corporation Series 60 heavy-duty diesel engine (rebuilt to 1994-model specifications). The engine performance tests were conducted using the Environmental Protection Agency (EPA) Federal Test Procedure transient cycle, and the emissions were evaluated according to the California Code of Federal Regulations Title 40 requirements for heavy-duty engines. To get a representative picture of use of different fuel mediums against base diesel fuels, the testing used both EPA diesel No. 2 and CARB-equivalent diesel, which has a significantly lower sulfur content.

Testing completed prior to the SwRI program also evidenced the ability of IFT's additive formulae to completely emulsify or put into solution, water that forms in the fuel system. This is a critical element in the effectiveness of IFT's various fuel blends as it eliminates the potential for problems with cold weather starts and inconsistent engine performance from fuel line problems.

''This is an important milestone in the evolution of IFT as we now stand ready to actively place fuel blends using our additive formulae in the commercial marketplace,'' said Burst. ''With the ability to deliver finished fuel blends that reduce fuel consumption, several of which incorporate alternative, renewable substances, IFT can also play an important role in the effort to reduce dependence on foreign oil supplies. We are especially pleased to be in this position at such a time when the need for economic and social balance is so crucial.''

Licensing Opportunities

Directly related to the announcement that the primary development activities of IFT's proprietary products are completed, the Company stated it is ready to seek licensing partners for the sale and distribution of finished fuels containing the fuel additive formulae.

William Lindenmayer, President of IFT, said, ''We have been in early stage discussions with several potential distributors over the past few months, but have been held back from seeking any specific commitments pending our final test results from SwRI. However, now that we are able to clearly evidence the economic and emissions benefits of our products, we are eager to seek out those companies with which we will have the best fit.''

Supporting the effort to source license partners will be a series of fleet trials designed to showcase both the potential value and ease of adoption of IFT's fuel additive formulae. IFT is already in discussions with several fleet owners who represent a cross-section of diesel engine use including trucking, school busses, off-road construction, and marine applications.

The markets IFT expects to initially concentrate on are the U.S., Brazil and Europe. ''Because the economic and emissions problems associated with the use of diesel fuel are felt on a global scale, it makes sense to try and set up partnerships in a number of key markets at the same time,'' according to Lindenmayer. ''At this point we see no insurmountable barriers to securing the necessary sales and distribution channels in any of the markets we are pursuing."

International Fuel Technology, Inc.

International Fuel Technology, Inc.

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