O2Diesel Corp., a pioneer in the development of a cost-effective, cleaner burning diesel fuel for centrally fueled fleets, today announced that Comlurb, the municipally owned trash collection company serving Rio De Janeiro, Brazil, has begun using O2Diesel's proprietary ethanol-diesel fuel blend, known as O2Diesel™, in its fleet of trash hauling vehicles.

Comlurb's use of O2Diesel™ represents the first time that ethanol-diesel fuel has been used in a commercial on-road truck application in Brazil.

Brazil is the world's largest producer of ethanol, and every gallon of gasoline sold in the country contains a minimum of 20% of this renewable fuel which is produced from sugar cane. Ethanol has been used as a motor fuel in Brazil for over 30 years.

Comlurb, one of several municipal fleets, was selected by Rio de Janeiro as the pilot fleet to verify the suitability of O2Diesel™ for all municipal captive fleets. The initial verification process is expected to last approximately three months, and involve 15 diesel-powered trucks. Comlurb operates 300 diesel powered vehicles consuming around 2 million gallons of diesel fuel annually. The O2Diesel™ fuel used by Comlurb is blended and delivered by state-owned Petrobras/BR, the largest oil and fuel distribution Company in Brazil.

"O2Diesel began forging relationships in Brazil several years ago, and we are pleased to see the results of our efforts starting to validate O2Diesel™ in the Brazilian market," said Alan Rae, President and CEO of O2Diesel. "With its nearly 7 million residents, and more than 10,000 diesel-powered buses, the air quality in Rio de Janeiro could benefit substantially from wide spread use of O2Diesel™. Brazil is recognized globally as a world leader for ethanol fuel implementations, which we believe makes Brazil an important market for O2Diesel Corp."

In 2004 the University of Sao Paulo published an environmental impact study which estimated the substantial health benefits of converting half the diesel fleet in the city of Sao Paulo to O2Diesel™. A copy of this report can be downloaded from www.o2diesel.com/links.php .

In January 2005, O2Diesel received approval from Brazil's National Petroleum Agency ("ANP") to become the first and only government-approved alternative diesel fuel in the country. According to a recent New York Times article, domestic ethanol consumption in Brazil is expected to increase 50 percent in the next five years, signaling a growing commitment to ethanol fuel.

SOURCE:  O2Diesel Corporation