Dynamotive Fast-Pyrolysis Plant To Be Built in China

1 December 2008

Canada-based Dynamotive Energy Systems Corporation has entered into a commercial agreement to support the development of a plant based on its advanced fast-pyrolysis technology in China. This will be the first Dynamotive plant to be built outside Canada.

The plant will be developed by Hubei Xinda Bio-oil Technology Co., Ltd. (Hubei Xinda) in co-operation with Great China New Energy Technology Services Co. Limited (GCNETS), the exclusive licensor for Dynamotive’s technology in China.

Dynamotive, under the terms of the agreement, will provide technical support for the development. Fees for the technical support have been agreed for at US$2,300,000. Construction will take place in China and will be the responsibility of Hubei Xinda.

The agreement with GCNETS and Hubei Xinda is the first of a number of potential agreements that are expected to be concluded in the region. GCNETS also worked closely with China National Offshore Oil Corporation (CNOOC), after being introduced by the Canadian Embassy in 2006 and has confirmed that negotiations are ongoing.

GCNETS is obligated to develop within five years a minimum of 15 plants in the region. Minimum license fees have been set at US$1,000,000 per plant developed. Further, the agreement between GCNETS and Dynamotive provides for up to 20% ownership of Dynamotive in the venture.

According to NDRC, China produces 900 million tons of agricultural residues each year. Using only one-third for fuel production, it would be sufficient to supply feed for two thousand 200 tpd BioOil plants. This output would help China meet its target to reduce its industrial fuel oil imports by 50%.

Dynamotive’s fast pyrolysis technology uses medium temperatures and oxygen-less conditions to turn dry, waste cellulosic biomass into BioOil for power and heat generation. BioOil can be further converted into vehicle fuels and chemicals. (Earlier post.)