Cooperation between the parties follows positive results achieved in preliminary testing which was conducted in 2009. Preliminary tests concentrated on establishing the suitability of BioOil use for the specific application as well as technical reviews of Dynamotive’s pyrolysis technology which included visits to the Company’s BioOil production facilities in Canada by MES experts.

MES and Dynamotive recognize that responding to global warming, protecting bio diversity, power generation and access to energy are global issues that must be addressed through the application of sustainable practices. The parties expect a growing trend in carbon reduction through the use of biofuels and growing customers interest in biofuels. As such the Companies envisage the following activities to be conducted in 2010.

Testing and evaluation to determine the suitabiltiy of DynaMotive BioOil as a mixing (blend) component and/or an alternative fuel in slow and / or medium speed diesel engines at MES facilities.

Commercial testing in field initially in stationary power plants applications and at second stage in marine applications.

Following these activities and subject to satisfactory results, the parties intend, through good faith negotiations, to enter into a definitive agreement to formalize their collaboration. The parties would utilize best endevours to enter into such agreements by September 30th, 2010.

The Definitive Agreement will contain, among other things, terms for use of facilities, covenants and other terms and other customary conditions.

About Mitsui Engineering and Shipbuilding Co. LTD.
Mitsui Engineering and Shipbuilding Co. LTD. is renown for applying their high technology capability to bring to the world of environment-related products and services to contribute to the achievement of a sustainable society. Their 100th Anniversary Vision is “Towards the Hopeful Future with the Credible Technology beyond 100 Years”. They are focusing in reduced greenhouse effect gases, higher fuel efficiency and lower energy consumption in their main fields of shipbuilding, diesel engines and cranes. They have also broadened into the biomass power plants business. For details, please visit its website.

About Dynamotive
Dynamotive Energy Systems Corporation is an energy solutions provider headquartered in Vancouver, Canada, with offices in the USA and Argentina. Its carbon/greenhouse gas neutral fast pyrolysis technology uses medium temperatures and oxygen-less conditions to turn dry, waste cellulosic biomass into BioOil for power and heat generation. BioOil can be further converted into vehicle fuels and chemicals. Photographs of the Guelph and West Lorne plants may be seen on the Company’s website.

Forward Looking Information

Statements in these new releases and audios concerning the company’s business outlook or future economic performance; including the anticipation of future plant start-ups, partnerships, consortiums, teaming agreements, government assistance, other anticipated cash receipts, revenues, expenses, or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements”. Forward-looking statements are by their nature subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stored in such statements. Such risks, uncertainties and factors include, but are not limited to, changes in energy prices, availability of capital, and the company’s ability to access capital on acceptable terms or any terms at all, changes and delays in project development plans and schedules, customer and partner acceptance of new projects, changes in input pricing, competing alternative energy technologies, government policies and general economic conditions. These risks are generally outlined in the company’s 20F and other disclosure filings with the Securities and Exchange Commission.

Forward Looking Information

Statements in these new releases and audios concerning the company’s business outlook or future economic performance; including the anticipation of future plant start-ups, partnerships, consortiums, teaming agreements, government assistance, other anticipated cash receipts, revenues, expenses, or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements”. Forward-looking statements are by their nature subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stored in such statements. Such risks, uncertainties and factors include, but are not limited to, changes in energy prices, availability of capital, and the company’s ability to access capital on acceptable terms or any terms at all, changes and delays in project development plans and schedules, customer and partner acceptance of new projects, changes in input pricing, competing alternative energy technologies, government policies and general economic conditions. These risks are generally outlined in the company’s 20F and other disclosure filings with the Securities and Exchange Commission.

The going-forward plan builds on Dynamotive’s competitive advantage and position in the green fuels market place. Dynamotive is one of only two companies with the demonstrated capacity to build multi-hundred ton/day biomass fast pyrolysis plants and is alone in having operational commercial plants in this size range; it has technology that has been proven at commercial scale and it retains robust technical capabilities.

Dynamotive has developed a product mix that provides multiple outlets for its plant outputs and a leading edge R&D program that has clear path to show the technology is mobile fuel chemical extraction capable.

In the mobile biofuel sector, Dynamotive has developed a proprietary research path as described above and is well positioned to service other processes. Dynamotive’s products can also be an input to emerging gasification and syngas technologies for the production of mobile fuels as has been proven in gasification tests on BioOil Plus™ conducted in Germany.

Further, Dynamotive believes its plants can be commercially viable at significant lower throughputs than competing technologies and provide flexibility in configuration, being able to produce BioOil® and ship product for further processing in other locations.

The combination of 12 years’ experience in process, technology and product development, coupled with plant operating experience and project development provide an advantage that the Company will capitalize on.

Dynamotive has substantially completed its capital investment program – more than $100 million in development, its development of 4 plants through 5 generations of technology, and has a product and project pipeline that meets market needs and an asset base that it can leverage to ensure financial viability. The Company is now positioned to increase revenue generation and be on its way to commercial viability in the near term.

The Company aims to achieve commercial viability by increasing product sales and technical services, licensing of plants which combined with continued cost cutting and restructuring of operations makes this goal achievable in the foreseeable future.

The cornerstone of Dynamotive’s commercial strategy is to focus its resources on core activities while levering strategic relationships to continue to develop its technology and product portfolio while maintaining and increasing its presence in the market place through development partnerships.

Based on the commercial plan, corporate operations will be focused on a) commercial activities: development of strategic alliances, marketing, licensing of technology, project and technical support and administration and compliance b) research and development based in Waterloo, Ontario and c) plant operation and demonstrations of the technology at West Lorne, Ontario.

Strategic Alliances

The Company is in discussions with potential partners in the energy sector; having completed its foundation work on technology and products, the Company offers today 12 years of development in process, technology, products and applications including a path to the production of mobile fuels from pyrolysis oil.

The Company has the assets, the know-how and a product mix that positions it uniquely in the bio-energy space; its plants provide flexibility in configuration and product mix as well as commercial viability at scales that are far smaller than other 2nd generation biofuel alternatives.

The Company has received co-operation of leading players in the energy sector both conventional and alternative for the analytical phase of its upgrading process as well as its product development and technology path.

It is a stated objective of management to continue in this path and to seek strategic alliances to accelerate development and market penetration.

Marketing / Licensing

Management’s focus is that of supporting development efforts by the Company’s partners, having established a project pipeline and knowledge base, the Company will prioritize third party developments.

The Company has agreements in place with Renewable Oil Corporation (ROC) in Australia and with Prius Developments SA in Switzerland. Under the marketing agreements in place and being negotiated, ROC will take the responsibility for development in Australia, New Zealand and Asean Countries.

ROC is currently developing projects in Australia and is supporting third party projects in Indonesia and Malaysia amongst others.

Prius Developments SA currently represents Dynamotive in France, Italy, Switzerland, Austria and Denmark.

Prius Developments SA is developing projects in Switzerland with a first project currently at the financing stage and is supporting project inquiries by third parties in the energy and biomass sector in its territories.

Based on the same principle of development, Dynamotive is in negotiations with parties for developments in US (Arkansas next lead project), Latin America (Argentina which currently is at financing stage) and China with the objective to have third party development structures in place in 2010 in these markets.

Management expects to complete the licensing of two new plants within 12 months; additional projects have reached financing stages in 3 different jurisdictions, and the Company is further supporting development efforts by its agents and joint venture parties in other regions. The Company has seen increased interest in its technology in the past 6 months which can be attributed to increase in oil prices and implementation of mandates in the use of renewable fuels and the Company’s success in product development as well as in increased sales.

Project Development and Technical Support

Dynamotive renewed its strategic alliance with Tecna SA. Through this agreement, the Company provides engineering and technical support to its marketing partners and licensors providing clients access to world class engineering capabilities. Tecna will act as Owner Engineer and technical advisor. This agreement allows Dynamotive to concentrate its resources on Technology and Product R&D while ensuring full technical support for its operations worldwide.

Technology

Dynamotive’s West Lorne Plant is operating consistently and at progressively higher output levels, operating consistently at 70% to 90% capacity. The product output is of consistent quality too. Shipments are being made regularly to clients. Sales are expected to progressively increase as the market and clients get further acquainted with the products.

The plant engineering is sound and is replicable. Multiple plant demonstrations have been made to energy, engineering and biomass firms in support of marketing efforts. This trend is continuing to grow with further diligence visits planned through year end.

Product

Dynamotive has developed multiple product lines, BioOil, BioOil Plus, BioOil Fuel Oil Blends and Upgraded BioOil A and B as well as Char. Each product meets specific requirements.

BioOil: Heat and Power application, Chemical base.

BioOil Plus: Gasification – Syngas.

BioOil Fuel Oil Blend: 5% and 10% blend – displacement of Fuel Oil / Bunker in existing installations.

Upgraded BioOil A and B: Mobile Fuel Applications.

Char: Briquetting, Pellets, Agricultural Application.

Dynamotive is today selling BioOil and Char in the market place; the Company sees a growing trend in demand for its base products (BioOil and Char) and has started marketing BioOil Fuel Oil blends.

Sales targets from its West Lorne plant are $ 1.5 million for the next 12 months. This is based on current contracts being extended and new contracts for bio fuel blends, and char being completed.

Research & Development

Research and development differentiates Dynamotive, our research and technical teams are experienced and are comprised of experts in the field. Our product research team has been pivotal in developing a BioOil that is stable and that can be stored and transported with confidence. Dynamotive BioOil has been stored for periods exceeding two years and successfully combusted. The capacity to store and transport BioOil is key in our commercial strategy, as it allows for flexible configuration of plants and the opportunity to ship product worldwide. Dynamotive has shipped BioOil from Canada to Europe, Asia, Australia, the US and Latin America.

Our team has further developed BioOil Plus as a means of increasing energy density and has this fuel used in thermal applications as well as an input to gasification processes. Dynamotive BioOil Plus was successfully tested for the production of syngas. This product provides the following advantage over direct gasification of biomass, higher energy density 14/1 vs. raw biomass and ease of use at the gasification line. Further, being a stable product it can be produced at remote locations, shipped and stored prior to use.

BioOil Fuel Oil Blends: Dynamotive’s research team has demonstrated 5 and 10% blends of BioOil and Fuel Oil. This product is intended to be utilized in stationary applications and rail and maritime uses. The Company aims to position the product as a blending agent undercutting palm oil, biodiesel and ethanol in this market. This product allows for partial displacement of hydrocarbon fuels without the need for dedicated combustion systems.

Mobile Fuels: Dynamotive’s research team has developed a two stage process to upgrade BioOil to mobile fuels. The process developed by Dr. Radlein is unique and has been replicated and been steadily improved over the past year. The process is described on our website under the BINGO heading. The process has significant advantages over other upgrading processes having higher end product yields from biomass than competing processes and is projected to be financially viable at significantly lower throughputs than competing technologies. Dynamotive continues its development program and has received support from leading energy firms in the analytical aspect of this product.

Char: Dynamotive has pioneered work on the development of agricultural applications for BioChar, Dynamotive’s CQuest™ BioChar is currently being used on a number of locations in the US and in Canada. Very positive results have been achieved to date with Blue Leaf Inc. (reports are available on our website) on the first year and second year crops. Further, the Company has supported and continues to support the US Department of Agriculture BioChar program, results of which are expected for first year crops at the end of 2009.

Financial / Compliance / Communications

Although the Company’s financial position in part due to the economic downturn been adversely affected, the Company has been able to continue operations through loans by Directors and Management and equity contributions by strategic partners.

The Company has taken aggressive steps to reduce non essential activities and costs, as a result of this, cost of operations have been reduced by approximately 50% on a year-to-year basis. Total cost of operations for Q4 2009 through Q3 2010 is expected to be $ 4.5 million +/- 10% including West Lorne plant operations. In the same period, the Company projects sales for West Lorne – product and technical demonstrations should reach $ 1.5 million, being a net contributor to offset Corporate expenses. Dynamotive projects that it can complete two licenses in the period further narrowing the need for outside financing. The Company today has a working capital deficit that it aims to cover through longer term loans by management and additional equity raises.

Debt management: The Company has $ 36 million in the carrying value of assets and total debt of $ 11.5 million (including provisions, contingent liabilities and loans by Directors and Management ) the Company also presented a plan for the re-allocation of assets including the potential sale of one of its plants. Through the potential sale of Guelph currently under negotiation, the Company believes it should be able to meet its creditor obligations.

Compliance / Communications

The Company is currently listed in the Nasdaq Bulletin Board and is reporting in British Columbia, the Company is up to date on all its filings and will continue its reporting duties as required by US SEC (foreign issuer) and BC SEC. The Company’s charter (available on our website) describes the duties and disclosure requirements by insiders and officers of the Company. Insider share trading reports can be accessed through SEDI: www.sedi.ca.

Communications: The Company will continue to timely reporting quarterly results and material events as they arise and proposes to have investor conference calls each quarter.  On Monday, September 21, 2009, the Company will hold its first shareholder/investor conference call at 11:00 AM Eastern; following dial-in instructions: from North America – 1.877.440.5804 and from International – 1.719.325.4765 using Passcode – 3546411. In addition, the Company will provide project and other updates on the Company’s website.

About Dynamotive

Dynamotive Energy Systems Corporation is an energy solutions provider headquartered in Vancouver, Canada, with offices in the USA and Argentina. Its carbon/greenhouse gas neutral fast pyrolysis technology uses medium temperatures and oxygen-less conditions to turn dry, waste cellulosic biomass into BioOil® for power and heat generation. BioOil® can be further converted into vehicle fuels and chemicals. Photographs of the Guelph and West Lorne plants may be seen on the company’s website.

About BioOil® Biofuel

BioOil® is an industrial fuel produced from cellulose waste material. When combusted it produces substantially less smog-precursor nitrogen oxides (‘NOx’) emissions than conventional oil as well as little or no sulfur oxide gases (‘SOx’), which are a prime cause of acid rain. BioOil® and BioOil Plus™ are price-competitive replacements for heating oils #2 and #6 that are widely used in industrial boilers and furnaces. BioOil® can be produced from a variety of residue cellulosic biomass resources and is not dependent on food-crop production.

Forward Looking Information

Statements in this news release concerning the company’s business outlook or future economic performance; including the anticipation of future plant start-ups, partnerships, consortiums, teaming agreements, government assistance, other anticipated cash receipts, revenues, expenses, or other financial items; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements”.  Forward-looking statements are by their nature subject to risks, uncertainties and other factors which could cause actual results to differ materially from those stored in such statements.  Such risks, uncertainties and factors include, but are not limited to, changes in energy prices, availability of capital, and the company’s ability to access capital on acceptable terms or any terms at all, changes and delays in project development plans and schedules, customer and partner acceptance of new projects, changes in input pricing, competing alternative energy technologies, government policies and general economic conditions.  These risks are generally outlined in the company’s 20F and other disclosure filings with the Securities and Exchange Commission.

The delegation was coordinated by Ms. Meera Bawa – Canadian Embassy Regional Office of the Trade Commissioner Service in Vancouver, BC and with Ms. Sandrine Caduc – Trade Commissioner, Innovation, Science & Technology located in Paris, France. The pyrolysis mission included representatives from IAR-Pole, COOPENERGIE® Picardie, Diester Industries, ETIA engineering, Institut Français Pétrole, French Atomic Energy Commission (CEA), and Maguin S.A.S.

The delegation was organized by Mr. Denis Trottier, Délégué Commercial/Trade Commissioner, Service Industries/Capital Projects & Natural Resources/Energy/Construction, Canadian Embassy in Paris, France. The fifteen member group included representatives from Germany’s Südzucker Group (French Subsidiary), Cristal Union, HONORE SAS, LYVEN, MAGUIN-INTERIS, SAINT LOUIS SUCRE, Soufflet Group, SYRAL, TEREOS, Union des Distilleries de la Méditerranée (UDM), and Union Nationale des Groupements de Distillateurs d’Alcool (UNGDA).

Dynamotive officials provided a PowerPoint Presentation and a tour of the facility. The Company would like to thank Mr. Trottier for coordinating the delegations visit to West Lorne.

Supporting Information:

PowerPoint Presentation

Mr. McMillan earned a B.S. degree in chemical engineering from Texas A&M University in 1979, and comes from Eastman Chemical Company after a 28 year career. Mr. McMillan has a strong background in profit and loss management, strategic planning, and operations. He also led a major business development initiative in the late 1990’s that successfully established a new $200 million chemical manufacturing complex in Southeast Asia. In 1999, he assumed global responsibility for an $800 million business segment within Eastman, leading the development and execution of strategies that resulted in a major improvement in corporate performance.

Andrew Kingston commented, “David McMillan brings to Dynamotive USA an enormous breadth of experience and expertise. His unique qualifications will greatly enhance the company’s ability to establish itself as a major force in the U.S. market.” He added, “David has a proven track record of success spanning three decades. We are fortunate to welcome him as a member of our corporate leadership team. In the past year, Dynamotive has expanded its senior management team attracting high caliber individuals to its international and corporate operations. Mr. McMillan joins Mr. Raul Parisi who is responsible for corporate development in Argentina and Latin America and, most recently, Mr. Tom Bouchard who joined Dynamotive as corporate Chief Operating Officer. We are delighted to have added this expertise.”

Mr. Bouchard, age 47, brings extensive experience from the process manufacturing industry including materials, quality control and packaging industry segments. For over 20 years at General Electric, he successfully held numerous operational and general management positions in its plastics business in the U.S., Canada and Europe. Most recently he was the VP & GM – Americas for Consumer Solutions at MeadWestvaco and prior to that Mr. Bouchard was the CEO of MetricVision Inc., where he led the successful turnaround and sale of this venture-capital-backed manufacturer and marketer of laser-based quality control products. A member of the Potomac Officers Club, Mr. Bouchard also serves on the board of directors of Sigma Space Corporation and Segmented Sensor Technologies, Inc. He earned a Master of Science degree in Management from Purdue University and a Bachelor’s degree in Chemistry from Williams College.

Andrew Kingston commented, “Tom Bouchard’s track record in making things happen is one of his many strengths and DynaMotive is fortunate to have him join the team,” He added: “Tom holds the academic credentials and has the top-drawer, hands-on experience to help us take Dynamotive to the next level of operations and market penetration. We welcome him aboard and look forward to his contribution.”

Dynamotive has established a new subsidiary, First Resources Corporation, to develop ethical, environmental and social solutions by joining First Nations’ heritage and values with leading edge technology. It is the culmination of more than two years of joint work with First Nations led by Johnna Sparrow Crawford of the Musqueam Band in British Columbia, who joins the Board of the newly established subsidiary and as spokesperson for the Company. The Company’s management team is led by Caroline Forester as Manager First Nations Business Development.

Dynamotive President and CEO, Andrew Kingston, said “Dynamotive is fully committed to developing relationships and substantial projects with First Nations and extending our activities to other aboriginal communities in the Americas. “We want to be part of the drive towards sustainability and we believe that, through interacting with the very people whose oldest values in life have been to respect and live in harmony with the resources offered by Mother Earth, we will be able to better achieve this objective. It has been a pleasure to work with Mrs. Sparrow Crawford and I would like to thank her and all who have supported this development over the past two years.”

First Resources’ Director, Johnna Sparrow Crawford, said “I am very proud and excited to be part of a company that is pledged to helping to bring economic prosperity, positive environmental change and a leading edge technology to native communities throughout Canada.

“This is a wonderful opportunity to demonstrate to the world that given the chance, First Nations people, ‘the original stewards of this land’, can be full partners in helping re-dress the imbalance to the environment that has been wrought by excessive industrialization and thus help ensure that future generations are not blighted by it.”

Forester said First Resources has already started working with First Nations communities in Western Canada. “We are in discussions with a number of them and have outlined projects that we believe have significant potential based on locally-based wood waste resources.”

Canada has over a billion acres of forest that represents nearly 10% of the world’s forests. The majority is publicly owned. About 80% of First Nations are located within commercial forest areas.

In the US, the Bureau of Indian Affairs (BIA) is responsible for the administration and management of 55.7 million acres of land held in trust by the United States for American Indians, Indian tribes, and Alaska Natives. There are 561 federally recognized tribal governments in the United States. Developing forestlands, leasing assets on these lands, directing agricultural programs, protecting water and land rights, developing and maintaining infrastructure and economic development are all part of the agency’s responsibilities.

BioOil produces substantially less smog-precursor nitrogen oxides (‘NOx’) emissions than conventional oil as well as little or no sulfur oxide gases (‘SOx’), which is a prime cause of acid rain. BioOil and Intermediate BioOil are price-competitive replacements for heating oils #2 and #6 which are widely used in industrial boilers and furnaces. They have been EcoLogo certified, having met stringent environmental criteria for industrial fuels as measured by Environment Canada’s Environmental Choice Program.