Naturally Advanced Technologies Announces Updates on its Crailar(R) Fiber Technology

The company also Announces Plans to Commence Construction of First Crailar(R) Manufacturing Facility in Craik, Saskatchewan.

(PORTLAND, Ore.) - Naturally Advanced Technologies Inc. ("NAT" or the "Company") (OTCBB: NADVF), a developer of proprietary technologies for processing and production of environmentally sustainable natural fibers, today announced its progress regarding commercialization of its CRAILAR(R) fiber technology, as well as plans for the construction of its first CRAILAR(R) production facility in Craik, Saskatchewan.

The Company has confirmed its intention to commence building its first CRAILAR(R) manufacturing facility in Craik, Saskatchewan, in 2008, and this week commenced geo technical surveys on the future site. The Craik facility will be designed as a primary processing facility using the patent pending decortication technology co-developed with the Alberta Research Council. Decortication is the technical term for mechanically stripping the outer fiber of the hemp stalk from the inner core fiber. Secondary processing using the F-Series technology is also expected to occur at the same facility. Management expects that the Craik facility will have a nameplate capacity of producing 52 million kilograms (114M pounds) of feedstock fiber per year. A Montreal-based engineering firm has been hired to design the process flow and building specifications. A second engineering firm has been hired to conduct geotechnical surveys in Craik, which are already underway. The Company expects engineering plans and specifications will be finalized in Q2, 2008. The Company plans for the building to be constructed using Canadian Green Building Council construction guidelines wherever possible and that most of the utilities used in the manufacturing processes will come from renewable resources. The facility will be built on the 80 acres of land provided by the town of Craik to NAT in 2005.

The Company's Proof of Concept facility in Ottawa, based at the National Research Council of Canada's Institute for Biological Sciences facility, where the first CRAILAR(R) enzymatic process research and development technology was conducted, has completed initial commercialization trials, and moved into fiber processing for bulk spinning and testing. The trials are being conducted with hemp fiber grown specifically for CRAILAR(R) F-Series, which is expected to yield positive benefits in fiber applications and performance characteristics. Using the CRAILAR(R) technology platform for processing and production of sustainable bast fibers such as hemp, the Company's objective is to develop fiber that is a more environmentally sustainable alternative to organic cotton.

Spinning trials are being conducted by an independent third party in the USA, and initial results are in line with the Company's objectives of creating a certifiable organic and sustainable fiber, from seed to yarn. Final applications for CRAILAR(R) F-series are expected to include apparel, home furnishings, carpeting and basic composites.

In addition, the Company has begun the manufacturing of production equipment planned to be used in the Company's first manufacturing facility in Craik, Saskatchewan. The production plant equipment is scheduled to be constructed in Montreal, Canada, where the first full scale production trials are expected to be conducted in conjunction with the NRC team that developed the CRAILAR(R) enzymatic process. After completion of the bulk CRAILAR(R) fiber trials, which are scheduled to be used for knitting and weaving developments in Q2, 2008, management anticipates that the production line will be moved to the facility in Craik in preparation for the first CRAILAR(R) production to commence in Q1, 2009.

Naturally Advanced Technologies Inc. ("NAT" or the "Company") is committed to unlocking the potential of renewable and environmentally sustainable biomass resources from hemp and other bast fibers. NAT, through its wholly owned subsidiary CRAILAR(R) Fiber Technologies Inc., is developing proprietary technologies for production of bast fibers, cellulose pulp, and their resulting by-products, in collaboration with Canada's National Research Council and the Alberta Research Council. CRAILAR(R) technology offers cost-effective and environmentally sustainable processing and production of natural, bast fibers such as hemp and flax, resulting in increased performance characteristics for use in textile, industrial, energy, medical and composite material applications. The Company is also a provider of sustainable, environmentally friendly fibers and fabrics through its apparel division HTnaturals. Founded in 1998 in response to the growing demand for environmentally friendly, socially responsible clothing, NAT adheres to a "triple bottom line" philosophy, respecting the human rights of employees, the environmental impact of the Company's operations and fiscal responsibility to its shareholders.

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act of 1934 and the provisions of the Private Securities Litigation Reform Act of 1995 and is subject to safe harbor created by these sections. Actual results may differ materially due to a number of risks, including, but not limited to, technological and operational challenges, needs for additional capital, changes in consumer preferences, risks associated with: market acceptance and technological changes; dependence on manufacturing and material supplies providers; international operations; and competition.