H2Diesel Announces Successful Completion of First Biofuel Test

HOUSTON, Oct. 9  /PRNewswire-FirstCall/ -- H2Diesel Holdings, Inc. (OTC:HTWO) (BULLETIN BOARD: HTWO)  and Dynegy Inc. today announced the successful completion of the first of three biofuel tests in their test program at Dynegy's Oakland Power Plant in Oakland, California.  The test was in the planning stages for several months and was performed on one of the plant's six Pratt and Whitney FT4 gas turbine engines.

The testing was conducted by initially firing the engine on distillate fuel oil, then switching to H2Diesel's 100 percent renewable biofuel.  A battery of performance and emissions tests was then conducted.

Formal test data are being evaluated, but preliminary results indicate no fuel-related shortfalls in engine output or efficiency and NOx emissions that were significantly lower than when firing distillate fuel oil.

"We are very pleased with the results of our Oakland test program," said David A. Gillespie, president and CEO of H2Diesel.  "These results will allow us to continue to fine tune and customize our renewable biofuel product to better meet the needs of our utility and independent power producer customers."

Randy Hickok, Dynegy's Managing Director of Western Assets, stated, "The initial results of our test program using H2Diesel biofuel are promising.  We are looking forward to further validation of H2Diesel's renewable biofuel technology."

Further tests will include additional customized fuel formulations using H2Diesel's proprietary blending technology.  Additional testing will focus on further optimizing emissions of NOx and CO as well as combustion tuning to enhance cold engine starts.

About H2Diesel Holdings, Inc.

H2Diesel is a development stage company that holds an exclusive license for North America, Central America and the Caribbean to proprietary technology for the manufacture of an alternative biofuel from domestically produced vegetable oils that is intended to be marketed as a heating fuel, fuel for power generation, or alternatively, as a new class of biofuel or fuel additive. H2Diesel believes its biofuel can be used directly for home heating and power generation and also potentially as a motor fuel. The Company further believes its proprietary biofuel will provide a cheaper, renewable alternative energy source with significantly lower emissions than traditional fuels and a cleaner and more efficient alternative to heating oil.  H2Diesel's business model calls for establishing biofuel production facilities directly and through sublicensing of its technology to qualified licensees.

This news release contains forward-looking statements. These forward- looking statements concern the Company's operations, prospects, plans, economic performance and financial condition and are based largely on the Company's beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results expressed or implied by such forward looking statements. The risks and uncertainties related to our business include all the risks attendant a development stage business in the volatile energy industry, including, without limitation, the risks set forth under the caption "Risk Factors" in the Company's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006.

  CONTACT:

  David Gillespie, President & CEO           Rob Schatz
  H2Diesel Holdings, Inc.                    Wolfe Axelrod Weinberger
  713-973-5720                               Associates, LLC
                                             212-370-4500


DATASOURCE: H2Diesel Holdings, Inc.



CONTACT:  David Gillespie, President & CEO of H2Diesel Holdings, Inc.,

[phone]; or Rob Schatz of Wolfe Axelrod Weinberger Associates, LLC,

for H2Diesel Holdings, Inc., [phone]

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