Clean Diesel Technologies Reports 2004 Fourth Quarter and Year-end Results

STAMFORD, CT (March 29, 2005) … Clean Diesel Technologies, Inc. (CDT) (EBB:CDTI & AIM:CDT/CDTS), a developer of chemical and technological solutions to reduce harmful engine emissions, today announced its results for the fourth quarter and year ended December 31, 2004. CDT reported an increase in Platinum Plus® additive and hardware revenue for the fourth quarter of 2004 and year-to-date over prior year periods. Total revenue for the fourth quarter was $194,000 with a net loss of $1,207,000, or $0.07 loss per share. This compares to total revenue of $89,000 and a net loss of $1,089,000, or $0.08 loss per share, for the same quarterly period in 2003. For the year ended December 31, 2004, total revenue was $722,000 with a net loss of $4,143,000 or $0.26 loss per share. In the comparable 2003 period, revenue was $567,000 with a net loss of $3,245,000 or $0.26 loss per share.

The fourth quarter increase in Platinum Plus fuel borne catalyst (FBC) and Platinum Plus Purifier (hardware) revenue is attributable to initial sales of CDT's Environmental Protection Agency (EPA) verified system to several east coast fleets and continued growth of FBC sales in the US underground mining industry. CDT expects to build on the fourth quarter revenue as its FBC gains increased recognition in the US, Europe and Asia for improving after-treatment devices such as filters and diesel oxidation catalysts (DOC's) and the retrofit markets expand. Sales of the FBC and hardware to beverage delivery, refuse and off-road vehicles were delayed in the fourth quarter as a result of requirements for automatic and on-board additive dosing technologies development and installation.

Dr Bernhard Steiner, Clean Diesel Technologies CEO, commented: "The fourth quarter of 2004 saw increased European activity for the Company with the establishment of a UK representative office, Clean Diesel International LLC, in December and the first European Platinum Plus FBC orders for diesel particulate filters."

Steiner also announced, "Clean Diesel International, in conjunction with its partner Dinex, was listed on the UK Energy Savings Trust Cleanup register for the Platinum Plus FBC in combination with a Silicon Carbide diesel particulate filter (DPF) from Dinex. Also late in 2004 Clean Diesel International's local Danish partner Daugbjerg, received Danish approval for the Platinum Plus FBC/DPF system. As a result Daugbjerg has been awarded two contracts for the FBC/DPF system as part of Copenhagen's DPF retrofit program."

In the US CDT has initiated a development program targeted at integrating the Platinum Plus FBC into advanced engines designed to meet strict 2007 particulate emission standards. These standards will require the use of diesel particulate filters on new engines and the FBC should help the filters from plugging during low temperature operation in city driving.

CDT's US licensee for the ARIS® urea injection system received additional orders for the patented ARIS injector for mobile NOx reduction including an award from the State of Texas to verify the system with the EPA. Together CDT and Combustion Components Associates are approaching several European exhaust manufacturers about incorporating the ARIS injector into their NOx control systems for new and existing vehicles.

Activity for application of the ARIS system for diesel stationary power generation is expected to expand in Japan due to the recent initiatives under the Kyoto agreement.

Expenses increased in the fourth quarter and the full year primarily due to the increased personnel costs associated with the European operations as well as the hiring of a new CEO. CDT has also increased its sales and marketing activity in the quarter and the year. Incremental financial advisory fees in the third quarter associated with a potential stock registration also impacted the full year expenses.

Full financial information is included in the Company's Form 10-K filed with the Securities and Exchange Commission (www.SEC.gov).

CLEAN DIESEL TECHNOLOGIES, INC. STATEMENTS OF OPERATIONS (Unaudited) (in thousands of US$ except per share data)

	Three months ended December 31			Twelve months ended December 31
	2004	2003		2004	2003
Revenue
Additive Revenue	100	58		299	212
Hardware Revenue	89	24		369	161
License and Royalty Revenue	5	7		54	194
Total Revenue	194	89		722	567
Costs and Expenses
Cost of Revenue	121	51		455	219
General and Administrative	1,201	840		3,962	2,695
Research and Development	162	266		506	855
Patent amortization and other expense	29	29		90	58
Loss from operations	(1,319)	(1,097)		(4,291)	(3,260)
Foreign Currency Exchange Gain	101	-		101	-
Interest Income	11	8		47	15
Net Loss	(1,207)	(1,089)		(4,143)	(3,245)
Basic and Diluted Loss per Common Share	(0.07)	(0.08)		(0.26)	(0.26)
Weighted Average Number of Common Shares Outstanding - Basic and Diluted	17,128	12,721		16,071	12,721

BALANCE SHEETS (in thousands of US$ except per share data)

	December 31, 2004		December 31, 2003
ASSETS Current Assets
Cash and Cash Equivalents	4,265		6,515
Accounts receivable, net	145		115
Inventories	387		320
Other Current Assets	71		73
Total Current Assets	5,513		7,023
Patents, Net	418		274
Fixed assets, net	200		126
Other Assets	27		18
Total Assets	5,513		7,441
LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES:
Deferred Compensation and Pension Benefits	-		441
Accounts Payable and Accrued Expenses	391		427
Total Current Liabilities	391		868
Stockholders' Equity
Preferred Stock, par value 0.05 per share, authorized 80,000 shares, no shares issued and outstanding
Common Stock, par value 0.05 per share, authorized 30,000,000 shares, issued and outstanding 17,165,868 and 15,679,387 shares respectively	858		784
Additional Paid-in Capital	38,431		35,813
Accumulated Deficit	(34,167)		(30,024)
Total Stockholders' Equity	5,122		6,573
Total Liabilities and Stockholders' Equity	5,513		7,441

About Clean Diesel Technologies, Inc.

Clean Diesel Technologies, Inc. is a specialty chemical company with patented products that reduce emissions from diesel engines while simultaneously improving fuel economy and power. Products include Platinum Plus® fuel catalysts, the Platinum Plus Purifier System, and the ARIS® 2000 urea injection systems for selective catalytic reduction of NOx. Platinum Plus and ARIS are registered trademarks of Clean Diesel Technologies, Inc. For more information, visit CDT at www.cdti.com or contact the Company directly.

Clean Diesel International LLC is located in Surrey England, south of London.

Certain statements in this news release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known or unknown risks, including those detailed in the Company’s filings with the Securities and Exchange Commission, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.