The Market Potential for the Production of BioOil in Taiwan and China

Dynamotive Energy Systems Corporation, a leader in cellulose based fuels technology, announced it has signed a cooperation agreement with Marketech International Corporation (MIC) to jointly review the commercial feasibility and, if warranted, develop and construct the first two commercial BioOil plants in Taiwan. The Companies also entered into a memorandum to explore further cooperation to develop BioOil projects in the Greater China area.

Dynamotive and Marketech acknowledged the market potential for the production of BioOil in Taiwan and China in the agreement, as well as recognizing the need to respond to the rising cost of fossil fuels and the reduction of green house gases which further enhance the potential for deployment of Dynamotive’s technology in these markets.

Taiwan

The companies have agreed to work together on an exclusive basis to investigate the feasibility of jointly developing and constructing two BioOil plants initially. Financing for the plants will be provided for locally. Dynamotive as part of the development agreement may, at its option, capitalize technology license and engineering services for up to 10% of project ownership.

The first potential plant would process 100 metric dry tons per day of prepared distiller grain at a facility located in an island off the coast of Taiwan. BioOil produced will displace high cost diesel oil being imported currently by the host company. Feasibility studies for the development have been completed with favourable determination by the parties.

The second potential plant is for a key agricultural producer in the country. The plant would process 100 metric tons per day of prepared sugar cane and other residuals.

Current planning envisages that Dynamotive will deliver pyrolysis modules (to be fabricated in any of three locations: Canada, U.S. or Argentina) and MIC as the local partner will deliver the balance of the plant, including feedstock preparation equipment, non-core equipment, construction and installation. Upon securing the projects, both parties agreed to enter into a further contract to define rights, obligations and warranties of each party for continued operations in this market.

China

Dynamotive and MIC agreed to collaborate on the feasibility of developing one BioOil plant utilizing Dynamotive’s technology to convert agricultural residues into BioOil in the People’s Republic of China. The companies will work together on negotiating commercial agreements for engineering, equipment fabrication, equipment supply, and project investments. Based on the successful completion of the first project and the resulting goodwill, Dynamotive will further evaluate geographic opportunities within China to be developed jointly with MIC.

As a professional technology service provider based in Taipei, Taiwan, MIC has gained broad-based experience in new and developing energy industries. In 2006, MIC started the construction of a petrochemical plant in the Mailiao Industrial Zone, and in 2007 MIC entered the solar cell industry. The biomass to liquid arena is a further step in MIC’s strategy to penetrate the renewable energy sector.

“MIC is ready to promote the construction of a BioOil Plant and will cooperate with Dynamotive Energy Systems Corporation in Taiwan and mainland China in the future,” said Mrs. Margaret Kao, the Chairman and CEO of MIC.

Richard Lin, Chairman of Dynamotive Energy Systems stated, “In selecting MIC, we have a capable local partner to take advantage of market opportunities and the new trend towards renewable energy in greater China.”

The foregoing joint initiatives are subject to definitive agreements both for the initial feasibility study collaboration and a determination that one or more plants are technically, financially and legally capable of construction, that will require the negotiation of further agreements and securing financing on acceptable terms.

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