The US Department of Defence is the largest consumer of diesel and distillate fuels in the United States. So O2Diesel investors ought to be pleased that the DoD is now testing O2Diesel's proprietary fuel blend.

This piece of good news comes after a terrible decline since last May's great biofuel sell-off. 2006 results showed the company still to be a long way from profitable - sales of just $250,000 and a loss of $13 million.

Nevertheless, it is still rated as a speculative buy by J M Dutton.