PROXY                                                                     PROXY

                       Solicited by the Board of Directors
                         CLEAN DIESEL TECHNOLOGIES, INC.
                 Annual Meeting of Stockholders - June 10, 1998

         The undersigned hereby appoints Ralph E. Bailey, Jeremy D. Peter-Hoblyn
and Lee K. Tinto, and each of them, with full power of substitution, proxies for
the undersigned and authorizes them to represent and vote, as designated on the
reverse side, all of the shares of Common Stock of Clean Diesel Technologies,
Inc. (the "Company") which the undersigned may be entitled to vote at the Annual
Meeting of Stockholders to be held at the Stamford Sheraton Hotel, One First
Stamford Place, Stamford, Connecticut 06901 at 10:00 a.m., on Wednesday June 10,
1998, and at any adjournments or postponements of such meeting, for the
following purposes and with discretionary authority as to any other matters that
may properly come before the meeting all in accordance with and as described in
the Notice of Meeting and accompanying Proxy Statement. The Board of Directors
recommends a vote for all nominees for election as director and for proposals 2
and 3. If no direction is given, this proxy will be voted for all nominees and
for such proposals.

             IMPORTANT - TO BE SIGNED AND DATED ON THE REVERSE SIDE

                            . Fold and Detach Here .





1. Election as Directors of Ralph E. Bailey, Douglas G. Bailey,
John A. de Havilland, Charles W. Grinnell, Jeremy D. Peter-Hoblyn
and James M. Valentine.

FOR all nominees                   WITHHOLD
listed above (except               AUTHORITY
as marked to the                to vote for all
contrary)                     nominees listed above



(Instruction: To withhold authority to vote for any individual
nominee, write that nominee's name on the line provided below.)

- --------------------------------------------------------------------------------


2. Approve the appointment of Ernst & Young LLP as independent auditors for the
year 1997

FOR         AGAINST       ABSTAIN


3. Approve the amendment of the certificate of incorporation of the Company to
increase the authorized common shares of the Company from 5 million to 15
million.

FOR         AGAINST       ABSTAIN



                                  Dated _________________________________, 1998


                                  _____________________________________________


                                  _____________________________________________
                                    (Signature of Stockholder)

                                  Please sign exactly as name appears. If acting
                                  as attorney, executor, trustee or in other
                                  representative capacity, sign name and title.