Mitsubishi Corporation, Japan’s Largest General Trading & Investment Company, Signs Comprehensive Letter of Agreement with Dynamotive

VANCOUVER, British Columbia--(BUSINESS WIRE)--Dynamotive Energy Systems Corporation (“Dynamotive”) (OTCBB:DYMTF), and Mitsubishi Corporation (“Mitsubishi”), Japan's largest general trading and investment company (sogo shosha) with over 200 bases of operations in approximately 80 countries worldwide, signed a letter of agreement (“LOA”) whereby development and strategic opportunities for cooperation are identified and protocols are established to jointly advance them.

The comprehensive LOA between Mitsubishi’s New Energy Business Unit, Business Innovation Group, and Dynamotive lays out the framework for exploring areas of cooperation in project development, finance, technology development, product research and application, and fuel supply and trading. It also recognizes Dynamotive's market potential in the field of cellulose based fuels providing it and its partners a unique opportunity for growth.

The Companies have worked cooperatively for the past 18 months, having previously signed a Memorandum of Understanding with Mitsubishi Canada Ltd. (“Mitsubishi Canada”, see announcement Dec. 20, 2005), and have identified projects and commercial opportunities that are earmarked for early development. Each opportunity described in the LOA is subject to negotiation of a definitive agreement between Dynamotive and the corresponding business unit of Mitsubishi.

Included in the project opportunities are the current development in Argentina (see announcement May 10, 2007) and other projects in Latin America, project development in China where Dynamotive has worked in cooperation with the National Development and Reform Commission (see announcement Dec. 12, 2006), project opportunities in the US where Dynamotive has an operating subsidiary and new project opportunities in Japan and South East Asia, among others that are introduced by Mitsubishi.

In addition, the LOA envisages project finance and supply of equipment by Mitsubishi in line with the previous MOU signed between Dynamotive and Mitsubishi Canada. Specifically, the Companies have agreed to initiate preliminary discussion for the refinancing of Dynamotive’s current plant and equity participation in West Lorne. This plant has an asset value of approximately U.S. $18 million, with the full output of West Lorne contractually committed.

Fuel supply and trading: the LOA framework establishes parameters for the possibility to supply BioOil® from Evolution Biofuels (Guelph Plant) to Mitsubishi for testing and market development purposes as part of an overall expansion strategy. Plant production is rated at 50,000 tonnes annually.

Technology licensing: Mitsubishi has requested the licensing of Dynamotive’s technology for small plant capacity (20 tonnes and under) for fabrication and marketing in Japan. Dynamotive is evaluating, as a result of this request, the opportunity to deliver a 15 tonne per day plant to Mitsubishi. Dynamotive currently has a plant of this capacity that could be refurbished for this purpose.

About Mitsubishi Corporation (“Mitsubishi”)

Mitsubishi Corporation is Japan's largest general trading & investment company (sogo shosha). Together, with its over 500 group companies, Mitsubishi employs a multinational workforce of approximately 54,000 people.

Mitsubishi has long been engaged in business with customers around the world in virtually every industry, including energy, metals, machinery, chemicals, food and living essentials.

Mitsubishi seeks to contribute to the enrichment of society through business firmly rooted in principles of fairness and integrity.

Mitsubishi’s New Energy Business Unit, Business Innovation Group, works on the development of new energy to supplement and replace fossil fuels, such as solar batteries, fuel cells, and biomass fuels. In addition, the group finances a variety of businesses by creating a clean energy fund.

About Dynamotive

Dynamotive Energy Systems Corporation is an energy solutions provider headquartered in Vancouver, Canada, with offices in the USA, UK and Argentina. Its carbon/greenhouse-gas-neutral fast pyrolysis technology uses medium temperatures and oxygen-free conditions to turn dry, waste cellulosic biomass into BioOil for power and heat generation. BioOil can be further converted into vehicle fuels and chemicals. The final stages of the commissioning process at the Guelph plant and the reconstruction of the West Lorne plant may be seen by viewing photographs regularly posted on the company’s website at www.dynamotive.com.

About BioOil®

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. They have been EcoLogo certified, having met stringent environmental criteria for industrial fuels as measured by Environment Canada’s Environmental Choice Program. BioOil can be produced from a variety of residue cellulosic biomass resources and is not dependent on food-crop production.

Forward Looking Statement

Statements in this news release concerning the company’s business outlook or future economic performance; including the completion of definitive legal agreements, consortiums, teaming agreements, 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 disclosure filings with the Securities and Exchange Commission.