October 21, 2010

NYSERDA Awards $1.3 million to Clean Diesel Technologies to Install Diesel Emission Reduction Technology on New York City Ferries

Funding Will Help Improve Air Quality in New York Harbor and Comfort of Ferry Riders

ALBANY, NY (October 21, 2010) — Clean Diesel Technologies, Inc. (“CDTI”) (NASDAQ: CDTI), a clean tech emissions reduction company, today was awarded $1.3 million in funding from the New York State Energy Research and Development Authority (NYSERDA) to supply technology to NY Waterway, New York City’s largest private ferry fleet, in order to significantly reduce diesel emissions from the NY Waterway ferry fleet.

The award was made through the New York City Ferry Emission Reduction Program, which is administered jointly by NYSERDA and the New York City Department of Transportation. The program is funded in part by a $4.8 million grant from the Federal Transit Administration for the purpose of evaluating and implementing emissions control technologies on private ferries operating in New York Harbor.

Over the next several months, CDTI will supply and manage the installation of diesel oxidation catalysts (DOC's) to more than 20 private ferry vessels operated by NY Waterway. DOC's will mitigate the release of harmful greenhouse gases into the New York City/New Jersey air basin as well as improve the air quality around ferry docking ports and enhance comfort of ferry passengers and crew.

“Public-private partnerships like the Ferry Emission Reduction Program are critical to helping improve our environment,” said Francis J. Murray Jr., President and CEO of NYSERDA. “The economic and environmental investments announced today will help mitigate the environmental impact of the City's ferry operations, improve local air quality, and help achieve the ambitious environmental goals set by Governor Paterson and Mayor Bloomberg.”

“Reducing our carbon footprint means becoming more efficient in our operations, whether it's from using cleaner fuels in our Staten Island Ferry fleet or recycled asphalt to repair our streets,” said DOT Commissioner Janette Sadik-Khan. “Thanks to Mayor Bloomberg’s PlaNYC initiative, New York’s transportation network is already one of the greenest in the world, and this grant will help private operators stay competitive as we continue our work to create a more sustainable City.”

“CDTI is pleased to be participating in this extremely important project,” said Michael Asmussen, CDTI President and CEO. “We thank NYSERDA for taking a leadership role in addressing unregulated marine emissions sources and believe the benefits will be significant both now and in the future. CDTI shares the view that the marine segment represents an important target for the reduction of harmful emissions and, therefore, is investing in the development of product solutions to address the problem.”

Arthur Imperatore, Sr., Chairman of NY Waterway and Paul Goodman, CEO of Billybey, stated that, “we are pleased to be participating in this NYSERDA program. We are constantly looking for ways to reduce the environmental impact of our vessels and we thank NYSERDA, FTA, and DOT for their supportive efforts. This is a prime example of the very constructive public/private partnership that exists between governmental agencies and NY Waterway, a private operation that is an integral part of the regions mass transit intermodal network.”

NY Waterway is New York City's largest private ferry fleet and is the largest private ferry operator in the country. The NY Waterway fleet is owned by Port Imperial Ferry Corp. and Billybey Ferry Company.

Following the DOC installation, a sample of vessels will undergo an evaluation period that will simulate normal passenger operation. The aim of the evaluation is to measure and verify emissions reductions prior to resuming normal operations. The evaluation period is anticipated to last 12 months. Each vessel will be inspected by the U.S. Coast Guard for approval before returning to service.

Emissions of many tons of NOx, an ozone-forming compound, as well as particulate emissions (soot) from marine engines into New York's air shed is mostly unregulated. Today's announcement follows a successful three year, $216,000 demonstration of diesel oxidation catalyst (DOC's) technology on three test vessels. DOC's fitted on test vessels were proven to significantly reduce diesel particulate matter and other harmful emissions. Installation of DOCS is being expanded to cover a larger portion of New York City’s private ferry fleet.

Diesel oxidation catalysts, which also are installed on school buses, delivery trucks, and other commercial vehicles, provide significant environmental and public health benefits. They include reduced NOx emissions and particulates, improved air quality, and a healthier ferry ride for passengers and crew on the boats.

For more information, please visit www.cdti.com or NYSERDA.ny.gov.

About Clean Diesel Technologies, Inc.

Clean Diesel Technologies, a cleantech company, provides sustainable solutions to reduce emissions, increase energy efficiency and lower the carbon intensity of on- and off-road engine applications. Clean Diesel’s patented technologies and products allow manufacturers and operators to comply with increasingly strict regulatory emissions and air quality standards, while also improving fuel economy and power.

The Company’s solutions significantly reduce emissions formed by the combustion of fossil fuels and biofuels, including particulate matter (PM), nitrogen oxides (NOx), carbon monoxide (CO) and hydrocarbons (HC)—without increasing secondary emissions, such as nitrogen dioxide (NO2). As a result, they are effective for: OEMs, Tier 1 suppliers and retrofit providers; businesses seeking solutions and expertise upon entering the emissions control market; operators requiring compliant emissions solutions; fuel, biofuel and additive suppliers seeking low emissions and energy efficient products; and regulators creating public policy. Clean Diesel’s solutions, therefore, are ideal for on-road vehicles and applications in a wide range of industries, including construction, mining, agriculture, port/freight handling, locomotive, marine and power generation.

Clean Diesel develops and manages intellectual property from original concept to full-scale commercial deployment. Building on almost 200 granted and pending patents, its offerings include ARIS® selective catalytic reduction (SCR); the patented combination of SCR and exhaust gas recirculation (EGR); hydrocarbon injection for emissions control applications; Platinum Plus® Fuel-Borne Catalyst (FBC); the PurifierTM family of particulate filter systems; and its wire mesh particulate filter technologies. The Company was founded in 1995 and is headquartered in Bridgeport, Connecticut. A wholly-owned subsidiary, Clean Diesel International, LLC is based in London, England.

Safe Harbor

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 U.S. 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.

Contact:

John Wynne, Clean Diesel Technologies
(203) 416-5290, jwynne@cdti.com

Jeffrey Gordon, NYSERDA
(518) 862-1090 ext. 3544, jrg@nyserda.ny.gov