Dynamotive Energy Systems Corporation (OTCBB:DYMTF) announced today (6th March) that it has started the commissioning of its biofuel plant in Guelph, Ontario, Canada, a process that is on target 11 months after start of fabrication.

The joint ventured Guelph plant, is designed to process 200 tonnes per day of cellulosic biomass (recycled wood) and produce 175 tonnes (37,000 gallons) of biofuel per day (12.2 million gallons a year) with the equivalent energy content of 550 barrels of conventional oil. Total development costs for the plant are currently estimated at US$ 16.5 million. Full operations are scheduled for the second quarter. 

Unlike ethanol and biodiesel, the biofuels produced by Dynamotive will be aimed at the industrial fuels market. This market accounts for approximately 25% of hydrocarbon usage and is a major contributor to greenhouse gas emissions.

"The Guelph plant will help draw international attention to renewable BioOil and Intermediate BioOil as being viable and highly economical replacements, on a potentially enormous scale, for mainstream industrial fuels whether in the US, China, Europe or the smallest nations which have little or no fossil fuel but abundant cellulosic biomass residues which are the raw materials from which our fuels are made," said Andrew Kingston, President and CEO of Dynamotive.

"Biodiesel and ethanol target mobile fuels. Dynamotive's fuels target, initially, the industrial market which is largely untapped. We believe we have a great competitive edge in this market as well as being able to target ethanol and syn-diesel production through further processing of our fuel."

"We believe that our BioOil and Intermediate BioOils can be shown to be cost competitive with hydrocarbon-based industrial fuels.

"The attractive economics of BioOil partly derive from the simplicity of the process, heat transformation of biomass into a liquid and char and the fact that residual cellulosic biomass can be processed at smaller, distributed plants that are significantly less costly to build and operate than other biofuel production facilities that require large scale operations to be economical," said Kingston.

"A main contributor to the cost competitiveness is the fact that Dynamotive's fuel is produced from residual or waste biomass and not from agricultural products that otherwise have food value."

The company has tested over 120 types of biomass to date. This provides it with great flexibility in tackling the growing sustainable fuels market, even providing opportunity to process residues from biodiesel and ethanol production processes.

Dynamotive has developed and tested BioOil and Intermediate BioOil in a number of industrial applications with major companies and has shown equivalent performance to natural gas, heating oil and diesel with same heat input (equivalent thermal input). Further, BioOil, Intermediate BioOil and char produced at Dynamotive's West Lorne plant have received Environment Canada's EcoLogo Certification through the Environmental Choice Program. Information on tests and the EcoLogo program are available at the Company's website www.dynamotive.com.

Kingston added that at a second stage of development Dynamotive will aim to further process BioOil and Intermediate BioOil into synthetic diesel and ethanol and, in doing so, further expand the market appeal for its technology and fuels.

"Production of syngas from BioOil and Intermediate BioOil is a preliminary step towards the development of mobile fuels and has been successfully demonstrated by the company."

Dynamotive has developed the technology and fuels over the past 10 years and demonstrated scaleability through six increasingly larger plants. It has invested over US$ 50 million to reach this stage. Today, the Company has developed two commercial plants in Ontario, Canada, Guelph and West Lorne, and is planning further production facilities for Australia, China, Europe, South America and the United States in addition to further plant modules of 200 tonnes per day capacity at the Guelph site.

Guelph's output biofuel - Intermediate BioOil - will be suitable for most of the industrial uses now addressed by petroleum-based #2 or #6 heating oil, such as industrial power, heating, paper manufacturing and aluminum smelting.

The company said it also expects to restart production near the end of the second quarter, of its West Lorne, Ontario plant that is currently being upgraded (after two years of operating as a commercial demonstration plant) to 130 tonnes per day of biomass processing capacity. The plant will produce Light BioOil and Char. The output of the plant will be mainly for electricity generation and for specialty products as BioOil has a number of high value components that can be extracted.

"Our Intermediate-Grade BioOil is an excellent substitute for fossil fuels, especially for use in industrial boilers, kilns, smelters and other applications. BioOil pumps well, ignites and burns readily when atomized, and it can be used by industrial customers with little adjustments necessary to combustion equipment."

"According to the Energy Information Administration, a statistical agency of the United States Department of Energy, nearly 25% (24.35%) of all U.S. petroleum consumption is used by industrial boilers and similar equipment.

"Focusing on that huge market makes BioOil the natural, renewable choice for industry," Kingston continued, "and, we believe, it will become a necessary supplemental biofuel to complement ethanol and biodiesel - fuels which are more focused on transportation usage."