The supply agreement follows on from the development agreement signed with Volvo Bus Corporation in July 2010 which stated that Clean Air Power and Volvo would jointly develop the installation of Dual-Fuel systems provided by Clean Air Power on existing bus engines to make it possible for buses from Volvo to run on Dual-Fuel in the future.

The 11 Dual-Fuel systems will be fitted directly onto the buses on the Volvo production line and these buses are expected to be in service in Sweden by July 2011. Once in service, the 11 vehicles will be the first Volvo buses to operate on both biogas and diesel as part of a Swedish government-backed project.

Using diesel technology increases environmental efficiency by up to 30-40% compared with current gas-operated buses. The project is receiving support from the Swedish government who are contributing almost SEK 24 million (US$3.5 million) of funding towards the project through the Swedish Energy Agency.

Further to this agreement, the Company is in follow-on discussions with Volvo Bus Corporation regarding the joint development of Dual Fuel engines for the next generation of Volvo Buses and bus chassis.

This supply agreement is separate from the supply agreement signed with Volvo Powertrain in July 2010, and represents a further extension to the relationship which began in 2007.