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DynaMotive Technologies Announces Second Stage Bagasse-to-BioOil Program

18 July 2000

Partners with Cosan Bom Jesus and Shipment of Bagasse-based BioOil to Engine Partners for Testing

    VANCOUVER - DynaMotive Technologies Corporation today announced that it has 
agreed with Brazilian sugar producer Cosan Bom Jesus to commence second stage 
testing of bagasse as a feedstock for the production of BioOil. Preliminary 
production runs earlier this year have proven DynaMotive's capabilities to 
produce BioOil from bagasse - an abundant, solid pulp material remaining after 
the extraction of juice from sugar cane. BioOil produced during this program 
has been shipped to engine partners for testing. The second stage test program 
to be conducted in Vancouver BC in the 3rd and 4th quarters of 2000 aims at 
optimizing technical design for bagasse-based BioOil pyrolysis plants. Bagasse 
will be supplied from one of Cosan's sugar mills in Brazil for this program.

    Commenting on this development, DynaMotive President and CEO Andrew
Kingston said, ``DynaMotive is taking a progressive and systematic approach
with regards to the optimization and market creation for bagasse-derived
BioOil. Initial tests have been very encouraging and as a result, we have
embarked on this second phase of testing. During this stage, DynaMotive will
concentrate on optimizing the design for a bagasse-fed BioOil pyrolysis plant
and further validating the applications, fuel quality and chemical composition
of BioOil made from bagasse. The BioOil produced will be shipped to our engine
partners for further testing and to other potential users with a view to
establishing a market for this emerging greenhouse gas neutral fuel.''

    Sr. Jorge Coury, Executive Director, Usina Santa Helena Mill/Grupo Cosan
Bom Jesus, said, ``We are encouraged by the progress achieved by DynaMotive in
the renewable fuels arena and particularly in their demonstration that they
can successfully produce quality BioOil from bagasse. We believe that BioOil
could play a significant role in the development of a further revenue source
for the sugar industry. The launching of the second phase testing program as a
precursor for the development of bagasse-specific technology is a critical
step in the development program. We will work closely with DynaMotive to
achieve the desired objectives in the 3rd and 4th quarters of this year.''

    Grupo Cosan Bom Jesus is one of the world's largest producers of sugar
and ethanol fuel and is also one of the largest sugar exporters in the world.
Its five large sugar mills located in the State of Sao Paulo, Brazil process
over 52,000 tonnes of sugar cane per day. Grupo Cosan employs over 6,000
people in its agricultural sector and 2,000 additional staff in its corporate,
research and engineering departments.

    DynaMotive Technologies is a world leader in the development of
technology to produce BioOil clean fuels for power generation in gas turbines,
diesel engines and boilers. BioOil is produced using a patented technology
that converts low value forest and agricultural wastes into a liquid fuel.
Unlike fossil fuels, liquid BioOil is clean burning, low in SOx and NOx
emissions, greenhouse gas neutral and can be produced economically from
renewable biomass waste materials.

    Sugar cane production worldwide represents a major opportunity for
DynaMotive. Approximately 1,340 million metric tonnes of sugar cane were
processed in 1999, with world sugar production reaching a record 134 million
tonnes in the same period. This equates to approximately 375 million tonnes of
bagasse waste, 50% of which is typically burned. Major sugar producing
countries include Brazil, Australia, Cuba, South Africa, China, Thailand,
Indonesia and India amongst others. Sugar production is also significant in
tropical and subtropical islands in the Caribbean, South Pacific and Indian
Oceans where production of BioOil from sugar cane bagasse could help reduce or
displace fossil fuel imports for power generation purposes.

    A commercial BioOil production plant processing 100 tonnes of dry bagasse
per day would produce approximately 22,000 tonnes or 4.8 million US gallons
(18.3 million litres) of BioOil per annum, displacing 2.7 million US gallons
(10.3 million litres) of diesel oil and providing 30,000 tonnes of green house
gas (GHG) credits.