DynaMotive Secures Option on 500,000 Tonnes of Wood Residue in Saskatchewan, Canada; Production Potential 2,140,000 Barrels of BioOil.

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--Feb. 11, 2003

DynaMotive Energy Systems Corporation (OTCBB:DYMTF) announced today that it has secured its first option on biomass stockpiles.

DynaMotive announced it signed an option for 500,000 tonnes of wood residue with L&M Wood Products of Saskatchewan. Fully processed the site should yield up to 2,140,000 barrels of BioOil (or 1,150,000 barrels of oil equivalent (BOE) . BioOil is a green house gas (GHG) neutral fuel that can effectively displace natural gas, diesel and heavy fuel in heat and power applications.

The wood residue is currently land filled and is a source of methane emissions, a gas that contributes to the green house gas effect. The combination of methane emissions reduction and the potential to displace fossil fuels in heat and power applications provides a unique opportunity to maximize the environmental benefits to the Province of Saskatchewan and enhance GHG credit potential of the reserve.

The biomass stockpile would also yield significant carbon dioxide, sulfur dioxide and nitrogen oxide credits. DynaMotive estimates that 325,000 tonnes of CO2e (carbon dioxide equivalents) credits will be generated from the biomass if the BioOil produced is utilized to displace natural gas. Substantially more CO2e credits would be generated if the BioOil displaces diesel, bunker oil or coal.

The option agreement establishes a supply price of CDN$ 0.01 per dry tonne of wood and a final option exercise determination date of December 31, 2003. The Company has estimated the fully burdened cost of processing at US $ 8.10 per barrel of BioOil (US$15 per BOE) based on a plant

producing 2,140 barrels of BioOil per day (1,000 BOE's). DynaMotive will be conducting a full economic evaluation of the biomass stockpile through the next two quarters to establish an exploitation program.

The Province of Saskatchewan supports research and development opportunities in the forest industry and innovative approaches to convert existing wood residues to viable resources. DynaMotive is in consultation with the Department of Industry and Resources of Saskatchewan with whom results of the evaluation on this initiative will be shared. The application of DynaMotive's technology is expected to provide a flexible solution to landfill and new wood residue production in the province.

Saskatchewan has significant biomass stockpiles. Currently 3.9 million tonnes are estimated to be in landfills. If processed, the land filled residue could yield 9 million BOE and 2.5 million tonnes of green house gas credits. Furthermore it is estimated that a residue excess of over half a million tonnes per annum is being produced (1.15 millions BOE potential per annum and 325,000 tonnes of GHG credits). The conversion of these residues into a usable fuel would contribute significantly to the Province and Federal Government's emission reductions targets established under the Kyoto Protocol.

The Kyoto Protocol establishes market based mechanisms that allow for emissions trading such as the Clean Development Mechanism, Joint Implementation Program and International Emissions Trading. It is estimated that the international carbon market could grow into a US$10 billion market in the next 8 years, creating considerable growth potential domestically and internationally for DynaMotive's technology.

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, the Company 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 in a wasteful and costly manner, and to economically convert them into a renewable and environmentally friendly fuel. Proven applications include forestry residues such as wood and bark, and agricultural residues such as sugar cane bagasse and corn stover. The Company has successfully demonstrated conversion of each of these residues into fuel known as BioOil, as well as valuable char, making these residues a renewable and environmentally friendly 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.