Algae-derived biofuels gain traction as commercial viability increases

Algaculture, the farming of algae for fuel, is gaining traction globally as governments and private players look to leverage on the potential of algae as a biofuel. Concerns about depleting oil resources and the environmental impact of modern-day fuels has catalysed the research and development in algaculture globally.

At the forefront of harnessing algae as a source is the U.S. Department of Energy (DOE). Through articles and videos, the DOE is doing its bit to spread awareness on why algae is such an appealing substitute for other fossil fuels.

Factors driving commercial viability of algae as a biofuel

Although there are a host of food-based alternatives that can be used to generate biofuel, unlike algae, their utilisation puts additional pressure on land. The global demand for food is on an increase, on account of rising population and adverse impact on crops due to climate change. In contrast, algae can be grown on artificial ponds, arid lands, and even salty water.

The amount of oil produced from microalgae is comparatively higher than land crops. Further, algae grows faster than other biofuel alternatives, making it a feasible energy source for end-use industries.

In recent years, as development of alternative fuels has gained momentum, interest in algae has witnessed a resurgence. Research and development activities are gaining traction globally; however, the initiatives are more pronounced in the U.S. and Gulf Cooperation Council (GCC).

Algae biofuel market: challenges

Although the future looks promising for algae-derived biofuels, currently, the algae market is at a nascent stage. The infrastructure required to harness biofuel from algae needs a major overhaul. If algae has to become commercially viable, the cost of production will need to come down substantially. The cost to produce one tonne of algae is approximately US$ 4,500. However, the actual oil that can be used as a fuel in every tonne of algae is only around 28%. Therefore, the cost per gallon is on the higher side, making it difficult for companies to make it a lucrative endeavour.

High cost of photobioreactors is another challenging impeding the growth of the algae biofuel market globally. Currently, photobioreactors cost over US$ 100 per square metre. Owing to the capital intensive nature of the industry, new entrants are finding it difficult to raise the required capital.

Use of fuel derived from algae at lower temperatures is another concern that’s restraining the growth of the market globally. According to a research conducted by the U.S. Department of Agriculture, using algae biodiesel in low temperatures is not feasible and requires the addition of other fuels to improve the flow. Further, the research found that degradation of biofuels was quicker in algae fuel was faster as compared to other biofuels.

Another aspect of using algae as a biofuel is the use of phosphorous in its cultivation. Earth’s phosphorous reserves are forecasted to deplete in the next 50 to 100 years, and if algae is commercially cultivated, demand for phosphorous will further increase.

Developing algae as a biofuel will entail government support for funding and R&D. The DOE in the US is supporting the development through its Bioenergy Technologies Office. If algae has to become a reliable alternative to fossil fuels, “strain identification” will need to be much more accurate. Identifying algae that offer the maximum oil output and standardising the production mechanism will go a long way in commercialising algae biofuel.

The information presented in this press release is based on the report, “Algae Biofuel Prospects Market: Global Industry Analysis and Opportunity Assessment 2014-2020” You can request a free sample of the report at


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