O2Diesel Corporation Retains Alliance Advisors to Initiate a Proactive Investor Relations Program

Market Wire, September, 2005

O2Diesel Corporation (AMEX: OTD), a pioneer in the commercial development of a cost-effective, cleaner burning diesel fuel for centrally fueled fleets, today announced that it has retained Alliance Advisors, LLC, an affiliate of Hayden Communications, to initiate a proactive and targeted investor relations campaign. Alan Sheinwald, President of Alliance Advisors, and his team will be advising the Company in all facets of a new investor communications program. The company's objective is, through the development of long-term investor relationships, to increase the awareness of OTD as an investment opportunity to the appropriate members of the professional investment community.

Alan Rae, CEO of O2Diesel Corporation, commented; "Right now we are at an exciting point of our commercial development. We continue to verify the benefits and applicability of O2Diesel(TM), our proprietary ethanol diesel fuel blend, through an expanding number of commercial applications in a wide range of diesel powered equipment. The U.S. has diesel consumption in excess of 50 billion gallons per year and growing, Europe is not far behind, and Brazil will consume around 12 billion gallons this year. With recent global increases in fuel prices, and a growing push for renewable alternatives, we believe that our ethanol-blended diesel fuel could position OTD to become a leader in the development, marketing, and delivery of cleaner-burning diesel alternatives in several global markets." Mr. Rae continued, "As part of our growth strategy it is our intention to implement a comprehensive and proactive investor relation strategy and we are very pleased to be working with Alan Sheinwald and his colleagues at Alliance Advisors in helping achieve this."

Mr. Sheinwald commented, "Based on today's national and international current events, O2Diesel's new clean fuel solution could not be more timely. Industry experts believe the acceptance of this fuel alternative will grow dramatically in the coming years. O2Diesel has already commenced commercialization in the United States and Brazil and we look forward to working with Alan Rae and his team to build the awareness and support for OTD in the public market place."

About Alliance Advisors

Alliance Advisors, LLC, an affiliate of Hayden Communications, Inc., assists public companies with market valuations under $100 million by developing and executing investor communications programs dedicated to interfacing with critical corporate investors in a timely and accurate manner. Clients receive the treatment of a larger organization, while Alliance provides the guidance and preparation for exposure required of an emerging public company. As Alliance clients achieve operational consistency, their investor relation campaigns are transitioned to the reach of the broader national institutional investment community.

About O2Diesel: The Company and Its Fuel Technology

O2Diesel Corporation (OTD) and its subsidiaries are pioneers 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 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 that 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.