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Performance Toyota/Scion and Clear Channel Radio Join O2Diesel's CityHome(TM) Program in the Push for Cleaner Air in Lincoln, NE

O2Diesel Corporation (AMEX: OTD) today announced that Performance Toyota, part of the Performance Automotive Group and the Lincoln operation of media giant Clear Channel Radio have become sponsors for the CityHome program in Lincoln, Nebraska.

"In today's day and age, more and more people are concerned about the environment and improving air quality," said Thomas Ballard, general manager of Performance Toyota/Scion. "As one of the largest automotive retailers in the Lincoln metro area, we realize that most of our customers are also concerned about high gas prices, fuel economy and wasted resources. Performance believes that the use of 02Diesel is a major step toward improving the quality of life in Lincoln and other metro cities. That is why we signed on with their unique program to help provide marketing support for fueling our local transit system."

"Clear Channel Lincoln (KIBZ-FM "The Blaze" 104.1, KTGL-FM "The Eagle" 92.9, KLMY-FM My106.3, KZKX-FM "96KX" 96.9) is excited to be working with O2Diesel's CityHome on this wonderful project," said Julie Gade VP / Market Manager for Clear Channel Radio. "We believe in the CityHome program and look forward to helping spread the word about the new Ethanol-Diesel technology O2Diesel(TM) has developed. Clear Channel has always supported the efforts to create a safer and cleaner environment and we are eager to associate our efforts with a project that incorporates the benefit of clean, healthy air, which will boost the use of ethanol, while enhancing the quality of life in Lincoln."

Alan Rae, CEO of O2Diesel Corporation, said, "StarTran Lincoln was the first municipal bus fleet to convert all of its 67 bus fleet to O2Diesel(TM) and after 8 months of use we are very pleased with the benefits the fuel brings to the community, by way of improved air quality, while being embraced and supported by global friendly companies such as Performance Toyota and Clear Channel. This marks another step in our business plan to grow O2Diesel(TM) into the preferred nationally recognized brand of choice, with global appeal."

CityHome is a community clean air program that partners commercial sponsors with transit authorities allowing them to respond to the public demand for improved air quality in their community, by using O2Diesel's cleaner burning ethanol diesel fuel.

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 that provides excellent performance and environmental benefits for centrally fueled fleets and off-road equipment of all kinds. Engineered and designed for universal application, O2Diesel(TM) is an ethanol-diesel blend treated with the company's proprietary natural oil-derived stabilizing additive 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 .

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding O2Diesel Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation, the failure to obtain adequate financing on a timely basis and other risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements, as a result of either the matters set forth or incorporated in this report generally or certain economic and business factors, some of which may be beyond the control of O2Diesel. These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure to gain product approval in the United States or foreign countries for the commercialization and distribution of our products and failure to capitalize upon access to new markets. O2Diesel disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. "O2Diesel" and "CityHome" are trademarks of O2Diesel Corporation.

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