06/12/2004

• Innovative product delivers over 5% cut in fuel consumption and emissions
• Technology could transform fuel performance of Britain’s transport industry

Stagecoach Group is to roll out the use of the next-generation fuel additive Envirox™ across its entire UK bus fleet after the success of a 12-month commercial evaluation.

The Perth-based international transport group announced today (6 December 2004) that its tests of the product in the north west of England and London had delivered more than a 5% cut in fuel consumption and an associated decrease in vehicle emissions.

Last year, Stagecoach signed an agreement with Cerulean International Ltd, the Oxford-based subsidiary of the nanomaterials company Oxonica Ltd, to trial the product in up to 1,000 vehicles across the country.

Now the fuel additive will be rolled out over the next six months across Stagecoach’s 7,000-strong bus fleet, which operates from the Highlands of Scotland to south-west England.

Brian Souter, Stagecoach Group Chief Executive, said: “We are extremely excited about the potential of this product, not just for our business, but for the whole of the public transport and logistics sector.

“Fuel is one of the biggest costs in the transport industry and the savings this product is able to deliver will help us continue to provide value-for-money bus services that attract people to public transport. It will also help improve the environmental impact of our operations and the quality of life in our towns and cities.

“Stagecoach is committed to playing its part in building a sustainable environment. Along with our trials of hybrid electric bus technology, this innovation is further evidence that we are leading the transport industry in developing new ideas.”

Dr Kevin Matthews, Oxonica Group Chief Executive said: “Oxonica is developing nanotechnology that addresses real market needs and Envirox is the first example which we are commercialising through our wholly-owned subsidiary Cerulean International.”

Stuart Anderson, Business Director of Cerulean, said: “Cerulean is working to introduce Envirox in a number of national markets around the world. We are delighted that Stagecoach has recognised the value of the benefit that the product brings and are excited by the opportunity within the UK transport market.”

Nanotechnology research is a key technology of the 21st century and is used to design and build materials at the atomic scale. Scientists work in nanometres, each of which is 1/80000th of the diameter of a human hair.

The fuel additive Envirox™ is based on a well-known oxidation catalyst widely used in catalytic converters. The material has been re-engineered using Oxonica’s nanotechnology expertise to allow it to be delivered as a fuel-borne catalyst, leading to a cleaner burn within the combustion chamber, resulting in improved fuel efficiency and lower emissions. No engine modifications are required to use the product, it has no impact on lubricant performance and the optimum dose rates are low.

Stagecoach has invested around £70 million this year in new state of the art bus fleets with reduced emissions. All new Stagecoach vehicles meet tough Euro III emissions standards and all buses use low sulphur fuel. Trolley buses and electric buses have been used in the company’s New Zealand business as part of efforts to cut the impact of operations on the local environment.

A futuristic hybrid electric bus was showcased by Stagecoach across the UK earlier this year to encourage local authorities to introduce the environmentally-friendly vehicle in their areas. The £200,000 vehicle has the advantage of being able to run emission-free in densely populated areas and the battery-powered technology means it is extremely quiet on the road. Stagecoach has already signed an agreement to operate the vehicles on a route in Newcastle from late spring in 2005.

ENDS

For further information, please contact:

Steve Stewart, Stagecoach Group, tel + 44 (0) 1738 4421111, + 44 (0) 7764 774680, or e-mail: steven.stewart@stagecoachgroup.com

Ben Willey, Buchanan Communications tel: +44 (0) 207 466 5000 or e-mail: benw@buchanan.uk.com

Notes to Editors

• Stagecoach Group is a leading international transport operator, with bus and rail operations in the UK, the United States and New Zealand.
• More than two million people a day travel on Stagecoach bus services in the UK, which cover around 100 towns and cities from the Highlands of Scotland to the south west of England.
• Cerulean International Ltd is a wholly owned subsidiary of Oxonica Ltd, a high-technology company working in the field of applied nanotechnology - science on the atomic scale.
• Oxonica was created in 1999, to commercialise intellectual property developed over seven years at the University of Oxford by Professor Peter Dobson and Dr Gareth Wakefield. Oxonica has gone on to add further intellectual property to its portfolio, and currently has in excess of 35 patent families.