Pyrolysis oils present several challenges to overcome as they are typically high in water, solids and acids and do not meet the specifications of fossil fuels. Dynamotive R&D venture with Dr. Radlein have started the development of a unique process which was demonstrated at the Company’s research laboratory to upgrade pyrolysis oil which could potentially overcome these challenges and could provide an economically viable process to upgrade BioOils to synthetic hydrocarbons. The Company recognizes that the development of synthetic fuels requires specific expertise which IFP has in this field.

The memorandum establishes progress milestones through 2010. Subject to satisfactory completion of the milestones, Dynamotive and IFP may enter into definitive agreements thereafter.

Information on the upgrading process under development is available at www.dynamotive.com.

About IFP
IFP is a world-class public-sector research and training center, aimed at developing the technologies and materials of the future in the fields of energy, transport and the environment. It provides public players and industry with innovative solutions for a smooth transition to the energies and materials of tomorrow – more efficient, more economical, cleaner and sustainable. For details, please visit its website at http://www.ifp.fr/

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.

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.

According to the International Biochar Initiative , “ Biochar is a 2,000 year-old practice that converts agricultural waste into a soil enhancer that can hold carbon, boost food security and discourage deforestation. The carbon in biochar resists degradation and can remain viable in soils for hundreds to thousands of years. Biochar is produced through pyrolysis or gasification — processes that heat biomass in the absence (or under reduction) of air. The process creates a fine-grained, highly porous charcoal that helps soils retain nutrients and water.”

While intensive study of biochar-rich dark earths in the Amazon (terra preta) has led to a wider appreciation of biochar’s unique properties as a soil enhancer, it is intriguing to speculate whether there might be similar effects on productivity in our temperate region soils, but little testing of these materials has been done as yet.

A start to finding the answer to this question is a field plot that has been established on a farm near Shakespeare. The local farmer supplied the test field plot, biochar application support and GPS mapping; Dynamotive Energy Systems Corp. supplied CQuest ™ Biochar made from its fast pyrolysis process; and Staff from the Ontario Ministry of Agriculture, Food and Rural Affairs will be assisting in the monitoring and interpretation of the data from the plot. Large enough strips to accommodate conventional harvesting equipment have been laid out in the field, alternate strips have received CQuest biochar and the entire plot will be monitored over the next growing season to determine if there are any differences in the growth or yield of the grain corn crop that will be planted in the field.

Tom Bouchard, Chief Operating Officer from Dynamotive commented, “Many studies are underway regarding biochar efficacy as a soil enhancement, but each soil type, climate and crop variation provides a new opportunity to generate useful field data. We are pleased to be working with OMAFRA and progressive farmers in Ontario to continue adding to the body of knowledge regarding biochar.” Keith Reid, Soil Fertility Specialist from OMAFRA added, “While many questions remain about the best way to use biochar for the greatest benefit here in Ontario, the process of finding the answers has begun.”

For details, please visit the Ministry’s website Here.

Contact:
D. Keith Reid, M.Sc., CCA-Ont., Soil Fertility Specialist
Tel: 519.271.9269

Key results include increases in biomass produced with biochar amended soils versus non-treated control areas. In the case of soybean in 2008, a 20% increase in grain yield was shown and for a forage mixture in 2009 a 100% increase in fresh biomass was obtained. Other parameters showing increases with CQuest Biochar included earthworm, nematode and mycorrhizal root colonization, supporting the hypothesis that biochar may serve as a refuge for soil microbes. Surface soil water infiltration was also greater in biochar amended soil.

The results of these trials reinforce other research pointing to potentially important advantages for the use of biochar as an agricultural soil amendment, both for economic and environmental reasons. Barry Husk, President, Blue Leaf Inc. commented: “This study makes a significant contribution to the growing body of knowledge regarding the positive impacts that biochar can have as a soil amendment. “Tom Bouchard, Chief Operating Officer, Dynamotive added, “We are pleased that Barry and the BlueLeaf team continued the study over a 2 year period. This enabled the collection of longer term data regarding how one relatively light application (at the initiation of the trials) of CQuest biochar behaves as a soil amendment under real world conditions.“

Full details of the Blue Leaf Report is available Here.

About Blue Leaf Inc.

BlueLeaf is a social purpose private corporation active in environment issues related to water and agriculture.

Contact:
Barry Husk, President
bhusk@blue-leaf.ca
www.blue-leaf.ca

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.

“In light of the recent accelerated activity in the biomass to energy market, from project proliferation to technology scale ups and consolidation throughout the supply chain, as well as recent expressions of interest by third parties in possible transactions with the company, it is now appropriate to initiate an external process to formally explore strategic alternatives,” stated Andrew Kingston.

The Company said, it does not intend to disclose developments regarding the review of strategic alternatives, other than the retention of its investment bank, Cascadia Capital, unless and until an agreement has been reached.

About Cascadia
Cascadia Capital is an independent, national investment bank located in Seattle.  Founded in 2000, Cascadia provides corporate finance and m&a services to companies in the following sectors:

Sustainable Industries, including clean technology and renewable energy,
Information Technology, including cloud storage, governance, risk and compliance and internet and new media
Middle Market, including business services, consumer products, retail, food and beverage

For more information on Cascadia, please visit www.cascadiacapital.com.

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.

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.

Increased sales of BioOil® during the quarter, combined with the Company’s aggressive cost cutting measures (previously disclosed) have resulted in significant reduction in losses.

Losses for the Quarter ended September 30, 2009 were reduced to $1.1 million, or $0.004 per share, compared with net loss of $2.8 million or $0.01 per share in the third quarter of 2008. Dynamotive’s net loss for the nine months ended September 30, 2009 was $4.3 million, or $0.02 per share, compared with a net loss of $7.1 million, or $0.03 per share for the nine months ended September 30, 2008.

Excluding stock-based compensation, the net loss for the third quarter ended September 30, 2009 was $0.9 million, compared with a net loss of $2.4 million for the same quarter in 2008. Dynamotive’s net loss for the nine months ended September 30, 2009 was $3.5 million, compared with a net loss of $5.4 million for the same period in 2008.

Total non-cash expenses for the third quarter were $0.2 million in 2009 ($0.4 million in 2008) and for the nine months ended were $0.8 million ($1.7 million in 2008), resulting from non-cash compensation and other non-cash charges

During the 3rd Quarter, the Company continued its development activities in BioOil upgrading and advanced discussions with strategic partners in regard to joint development and marketing of its BioOil production and upgrading processes.

Independent tests continued on upgraded BioOil A and B further confirming the capacity to upgrade pyrolysis oil to synthetic hydrocarbons.

The Company continues to prioritize third party developments. Further details can be found in the Management Discussion and Analysis section of the financial statements which can be accessed through SEDAR and are also available on the Company’s website www.dynamotive.com.

The Company has funded its operations through product sales, loans by Directors and Management and equity contributions by strategic partners. The Company continues to have a working capital deficiency at quarter end which the Company is seeking to correct through asset sales and possible new equity financing in respect of which there can be no assurances given at this time. Further details can also be found in the Management’s Discussion and Analysis section of the financial statements.

At quarter end, the Company’s CFO’s contract expired. The Company’s Audit committee is working together with management in securing a replacement for Mr. Richardson. Mr. Richardson continues to act as a consultant to the Company.

The Investor Conference call is scheduled for Monday 14^th December at 10:00 AM Eastern Standard Time, following instructions: from North America – 1.800.346.7359 and from International – 1.973.528.0008 using Passcode – 621884  and via webcast at this link – http://www.visualwebcaster.com/event.asp?id=64618

Highlights during the Quarter:

• Announced in August the receipt of orders of BioOil from a US based client over a period of six months. Deliveries of BioOil have been completed to schedule and are continuing at the time of writing.

• The Company received an order extension for a further 9 shipments of BioOil from its US based client to be delivered over a period of 3 months which takes planned deliveries of BioOil from the plant to April 2010

• Filed Q2 results and the Company continued to implement its strategy to reduce costs, promote sales of product and licensing of its strategy, product R&D, asset utilization and development of strategic alliances to service market opportunities.

• CQuest Biochar test program in partnership with BlueLeaf Inc. provided a mid-season update on BlueLeaf’s commercial farming field trial utilizing Dynamotive’s CQuest Biochar begun and reported in 2008, that such findings further support the economic potential for CQuest Biochar as soil enhancer.

• Second year harvest results are expected to be available within 60 days of writing and will be published when available.

• Updated commercial targets for 2009/2010; the Company’s 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. In addition, Dynamotive has a technology that has been proven at commercial scale and it retains robust technical capabilities.

• Announced that the Company successfully applied the BioOil upgrading process to BioOils produced from a variety of feedstocks. The feedstocks from which the BioOils were produced included sugar cane bagasse, bark rich forest trimmings, softwoods and palm fronds. BioOils upgraded were of widely varying quality and in some instances had been in storage for several years. The results enhance the prospects of the BINGO process in that they demonstrate its robustness and versatility. Furthermore, they open the possibility of upgrading BioOils from a variety of biomass sources into a single uniform hydrocarbon product.

Summary financial results are presented as follows:

Unaudited Consolidated Statements Of Loss and Comprehensive Loss

(expressed in U.S. dollars)

As previously advised, the Company will continue to timely reporting quarterly results and material events as they arise. Following up on the last shareholder/investor conference call in September 2009, the Company will hold it’s next conference call via audio webcast on Monday, December 14, 2009, at 10:00 AM Eastern; following instructions: from North America – 1.800.346.7359 and from International – 1.973.528.0008 using Passcode – 621884  and via webcast at this link – http://www.visualwebcaster.com/event.asp?id=64618. In addition, the Company will provide project and other updates on the Company’s website.

® BioOil is a registered trademark of DynaMotive Energy Systems Corp.

The plant operated dry biomass input capacities of 100 metric tons per day (> 75% of nominal capacity) and peak feed rates of 116.8 metric tons per day (90 % of nominal capacity) for a number of days.

Dynamotive’s West Lorne plant is capable of processing up to 130 tonnes per day of biomass and is located within a wood flooring manufacturing facility in Ontario, Canada.

BioOil® is a registered trademark of DynaMotive Energy Systems Corp.

The products from Stage 1 of the BINGO upgrading process (UBA) were similar in density, oxygen content, TAN (total acid number), molecular weight distribution, among other physico-chemical properties, to those produced from hardwoods.

Analysis of second stage upgraded BioOil samples (UBB) from hardwoods have been previously provided to 3 independent refiners in Europe and in the Far East established the potential for development of synthetic hydrocarbon fuels showing gasoline, jet, gasoil and vacuum gasoil fractions.

The results enhance the prospects of the BINGO process in that they demonstrate its robustness and versatility. Furthermore, they open the possibility of upgrading BioOils from a variety of biomass sources into a single uniform hydrocarbon product.

The upgrading process addresses several critical issues in the development of sustainable fuels from biomass.

Food vs. Fuel: The Company converts residual biomass from agricultural and forestry and/or dedicated non-food crops through a thermochemical process into BioOil and Biochar. BioOil and Biochar plants can coexist with existing forestry and agricultural facilities, providing an additional benefit to operations.

Yield: Dynamotive’s pyrolysis process converts roughly 85% of the total biomass feed into useful solid (char) and liquid (BioOil) fuels. The balance is utilized to provide energy to the process.

Yields of Diesel/Gasoline from BioOil through the Stage 2 upgrading process of 37% have been achieved at bench-scale. The net overall yield from whole biomass to diesel/gasoline is approximately 25%, which to the Company’s knowledge is the highest ever reported.

Update on Upgraded Bio Oil Analysis
Dynamotive Energy Systems Corporation announced that analysis completed independently by two refiners have corroborated initial results published earlier. The distillation of the samples provided showed presence of gasoline, jet, gasoil and vacuum gasoil fractions.

SIMDIST (simulated distillation) Approximate fractions.
Gasoline (15C – 145C) 20 %wt
Jet (145C – 230C) 31 %wt
Gasoil (230C – 375C) 31 %wt
Vacuum Gasoil (375C – 560C) 18 %wt

Demonstrating a significant upgrading of the crude BioOil to the UBB, Analysis further confirmed that the most highly refined oil, UBB, has oxygen content of less than 0.1% and it reached a level of conventional oil products. Elemental analysis (CHONS) of Upgraded BioOil B (UBB) Carbon 87.7 Hydrogen 12.2 Oxygen 0.01 Nitrogen <0.01 Sulfur 0.0001

Dynamotive is continuing its research and development efforts in BioOil upgrading and has completed basic design on the development of a second pilot plant to further advance the process.

Cautionary Notes:
Although Dynamotive believes the yield and technical data described herein are reasonable estimates based on its current knowledge, it cautions that these results were achieved at bench-scale levels only. While Dynamotive believes the process can be scaled-up using conventionally available upgrading equipment, until such upgrades are in place on a large scale and have operated for a longer term, these estimates may be subject to material adverse changes.
® BioOil is a registered trademark of DynaMotive Energy Systems Corp.