AB Volvo receives support for field test of DME technology for heavy vehicles

AB Volvo receives support for field test of DME technology for heavy vehicles

The Swedish Energy Agency has granted AB Volvo SEK 12.8 M in support for field
testing of the third-generation DME technology for heavy vehicles. The field
tests with the 14 trucks is part of a project comprising demonstration of the
entire technology chain, from biomass to fuel in the trucks and also includes
distribution and tanking stations for DME. The first trucks are scheduled to be
placed in traffic at the end of 2009.


In addition to AB Volvo, Chemrec, Delphi, ETC, Haldor Topsoe, Preem and Total
are participating in the project as partners. Chemrec, ETC and Preem are also
receiving support from the Energy Agency.

The support now being granted by the Energy Agency supplements the support being
sought from the EU's Seventh Framework Program (FP7), in which contract
negotiations are in the final phase.

In June 2006, the Swedish Energy Agency granted AB Volvo SEK 62 M in support for
development of third-generation DME technology. It is this technology that will
be tested in the field trials. AB Volvo is also investing major funds in the
projects.

Volvo's own studies have shown that DME has potential to become a highly
competitive renewable alternative to today's fossil fuels. DME is characterized
by high energy efficiency and very low exhaust emissions, due among other
factors to soot-free combustion.  DME is handled as a liquid in pressure
vessels, at low pressure, similar to LPG.  DME is produced through gasification
of biomass or fossil raw materials. The gas that is formed, synthetic gas, is
then catalyzed to produce DME. DME is already used today as propellant gas in
spray cans. Since 2004, DME has grown rapidly in the energy sector. In just a
few years, China has increased world production of DME tenfold, primarily as
household energy. 

April 2, 2008

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66 11 27 or +46 705 59 11 49

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AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 13.30 p.m. April 2, 2008.

The Volvo Group is one of the world's leading manufacturers of trucks, buses and
construction equipment, drive systems for marine and industrial applications,
aerospace components and services. The Group also provides complete solutions
for financing and service. The Volvo Group, which employs about 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. Annual sales of the Volvo Group amount to about SEK 285 billion.
The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden.
Volvo shares are listed on OMX Nordic Exchange Stockholm.