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Des Moines Metropolitan Transit Authority to Convert Diesel Buses to O2Diesel(TM) Through CityHome(TM) Program

O2Diesel Corporation (AMEX: OTD) today announced that the Des Moines Metropolitan Transit Authority (MTA) has joined the CityHome(TM) program. CityHome is a major national clean air initiative designed to create a better quality of life for city residents by improving urban air quality. It allows the public transportation systems to significantly reduce diesel emissions by burning O2Diesel(TM) fuel at no additional cost to the transit systems.

MTA is the fourth public transportation system to join CityHome and represents the largest fleet conversion to date under the CityHome program. With an annual consumption close to one million gallons, the MTA plans to convert all 140 of its diesel-powered coaches and para-transit vehicles to O2Diesel's cleaner burning ethanol-diesel fuel in early August 2005.

Launched nationally on March 10 in Lincoln, NE, CityHome is an innovative partnership involving public transportation systems, O2Diesel and corporate sponsors. The sponsors make it possible for participating cities to offset the added cost of O2Diesel's ethanol-diesel fuel blend.

"Des Moines and the entire state of Iowa are virtually synonymous with ethanol production, and we are pleased to have MTA's commitment to convert its buses to O2Diesel's ethanol-diesel fuel," said Alan Rae, CEO of O2Diesel. "CityHome continues to prove itself as a valuable air quality and community relations program that benefits local residents. Additionally it allows municipalities to implement an alternative fuel program that begins to loosen the ties to traditional fuel sources by using locally produced renewable ethanol."

"The timing could not be better for the City of Des Moines and the MTA to embrace ethanol-diesel fuel blends for our bus fleet through the CityHome program," said Steve Spade, MTA General Manager. "Not only does CityHome help improve the quality of life for our citizens by reducing diesel fuel emissions, it also has a broader impact across the region by supporting Iowa's agricultural economy, while reducing dependence on foreign oil supplies."

The official press conference to launch the MTA CityHome Program and announce the sponsors will be held in August. Select MTA buses will also display CityHome bus wraps as part of the program.

More About O2Diesel: The Company and Its Fuel Technology.

O2Diesel Corporation (AMEX: OTD) is a pioneer in the commercial development of a cleaner-burning diesel fuel alternative that provides exceptional performance and environmental qualities for centrally fueled fleets and off-road equipment of all kinds. Engineered and designed for universal application, O2Diesel(TM) is an ethanol-diesel blend that substantially reduces harmful emissions without sacrificing power and performance. Extensive independent and government-recognized laboratory and in-use field tests have demonstrated the effectiveness of O2Diesel(TM) -- the introduction of this cost-effective, cleaner-burning diesel fuel is now underway in the United States and other global markets. For more information please refer to www.o2diesel.com.

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding O2Diesel Corp.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. "O2Diesel" and "CityHome" are trademarks of O2Diesel Corp.

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