DynaMotive's BioOil Matches Natural Gas Performance in Lime Kiln Tests Opening Commercial Opportunities in the Pulp & Paper Sector.

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--June 25, 2003

DynaMotive Energy Systems Corporation (OTCBB:DYMTF) announced today that initial tests carried out under the direction of Professor Paul Watkinson of the University of British Columbia (UBC) established that DynaMotive's BioOil performance is comparable to that of natural gas, confirming the potential for use of BioOil within the pulp and paper industry. The Company further disclosed that it is in discussions with a number of pulp producers who are interested in the technology and could potentially host the full-scale trials when pilot testing is completed later this year.

BioOil is greenhouse gas neutral, does not produce SOx (sulfur dioxide) emissions during combustion and produces approximately half the NOx (nitrogen oxide) emissions in comparison with fossil fuels. Integrated production and use of BioOil in pulp and paper facilities has the potential of reducing energy costs while cutting greenhouse gas emissions.

Substitution of BioOil for fossil fuels in pulp mill kilns represents a significant market opportunity. In Western Canada alone, 22 kraft pulp mills consume approximately 16 million GJ (giga joules) of fossil fuels (2.6 million BOE) each year in their lime kilns. This energy consumption is equivalent to the BioOil produced by 11 commercial scale BioOil facilities each processing 800 green tonnes of wood residue per day. The global opportunity within the pulp & paper sector alone is estimated to exceed 160 full-scale BioOil plants.

"We are pleased with the results of the initial tests. As anticipated, the initial stages of the test program have shown BioOil lime kiln temperature profiles and emissions profiles similar to natural gas. The fully calcined lime characteristics obtained with BioOil were comparable on a macroscopic and a microscopic level to those achieved with natural gas. We look forward to obtaining detailed quantitative comparisons of the performance of BioOil and natural gas to open up a variety of opportunities for application of BioOil as a greenhouse gas neutral alternative to natural gas and other fossil fuels," said Professor Watkinson of UBC. "The tests were conducted at our facilities with the co-operation of DynaMotive technical staff and UBC research staff. We are excited about the results obtained and look forward to continued co-operation with DynaMotive."

DynaMotive's President and CEO Andrew Kingston said, "This is a further step in our BioOil validation program. Establishing early market opportunities for our technology and fuel is critical to our future success. In the last three years, we have validated BioOil as a fuel for power generation and combined heat and power applications with Orenda turbines, combustion characteristics in furnaces with CANMET, lumber kiln applications with Canfor and now lime kiln applications with the assistance of UBC. BioOil is rapidly establishing its potential as a credible alternative to fossil fuels. Naturally, we are very excited about the results and would like to acknowledge the highly skilled technical teams led by Professor Watkinson and DynaMotive's Warren Johnson."

Partial funding of this program is provided by Industry Canada through Technology Partnerships Canada (TPC) and the Industrial Research Assistance Program (IRAP) of the National Research Council of Canada.

DynaMotive is an energy systems company that is focused on the development of innovative energy solutions based on its patented fast pyrolysis system. Through the application of fast pyrolysis, DynaMotive has shown how to unlock the natural energy found in the world's abundant organic resources that have been traditionally discarded by the agricultural and forest industries and to economically convert them into a renewable and environmentally friendly fuel. DynaMotive has successfully demonstrated conversion of these residues into fuel known as BioOil, as well as char and in doing so establishing these residues as a renewable, environmentally friendly and cost competitive energy reserve.

Forward-Looking Statement 

Statements in this news release concerning the company's business outlook or future economic performance; anticipated profitability, 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" as that term is defined under the Federal Securities Laws. Forward-looking statements are 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, future capital needs, changes and delays in product development plans and schedules, customer acceptance of new products, changes in pricing or other actions by competitors, patents owned by the Company and its competitors, and general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission