Dynamotive to partner with Australian firm

Feb. 28, 2011, Vancouver – Vancouver-based Dynamotive
Energy Systems and Australian firm Renewable Oil Corporation (ROC) have established directions
for a joint approach to developing a biofuels business in Australia. The
companies have agreed non-binding heads of terms and have agreed to negotiate
final terms exclusively with each other. ROC, through one of its directors, has
made a monetary advance to secure the exclusivity period for negotiations
(through March 31st 2011) and extension of the current license in Australia.

Key terms:

• A joint venture would be established
  whereby Dynamotive would contribute 50% of the license for Australia and its
  know-how on development and construction of pyrolysis units, as well as access
  to its facilities and partnerships.
• ROC would acquire from Dynamotive the
  balance of the master license (50%), valued at $500,000, and make payments to
  Dynamotive over an agreed period of time.
• The joint venture would also benefit from a
  license to build and operate a pilot pyrolysis and upgrading unit, with license
  terms to be agreed, to include license fee and royalties per plant.

This agreement builds on a range of
activities by the parties over several years and the past twelve months in
particular. These include progress with the upgrading of Dynamotive’s pyrolysis
oil to mobile fuels for a range of transport applications, investigation of
pyrolysis oil as a fuel for large diesel engines suitable for marine and power
applications, and work by ROC in Australia to shortlist sites that offer stable
and competitively priced supplies of wood feed for commercial plants. ROC is
also working with a national research organization to develop a program aimed
at final commercialization of a major farm forestry program that has the
potential to provide sustainable biomass for dozens of biofuel plants.

Dynamotive and ROC will now work on
finalizing details of the joint venture and the business plan for process
demonstrations and commercial plants in Australia.