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Algae-based Biofuel: Pros And Cons

RP Siegel | Thursday April 12th, 2012 | 10 Comments

There is no perfect energy source. Each and every one has its own advantages and compromises. This series will explore the pros and cons of various energy sources.  Learn about other forms of energy generation here.

Algae–based biofuel is a new energy source that has been getting a lot of attention lately. Certain types of algae contain natural oils that can be readily distilled into a vegetable oil or a number of petroleum-like products that could serve as drop-in replacements for gasoline, diesel, and jet fuel.

But because it’s a bio-fuel, it is essentially carbon-neutral because the carbon emitted when it is burned had just recently been absorbed as food, which means that the net CO2 emission is essentially the same as if the algae had never been grown. That does not include CO2 utilized in production. Industry claims assert that algae-based bio-diesel has a GHG footprint that is 93 percent less than conventional diesel. Some algae production is sited near sources of CO2 such as power plants, in a kind of symbiotic relationship. Algae-based fuel yields considerably more energy per unit area than other bio-fuels. It can also be grown on land otherwise unsuitable for agriculture. The technology is quickly moving out of the lab and into commercial scale production. A number of companies developing refineries include Solazyme, Sapphire Energy (which just last week announced another $144 million in funding) and OPXBIO. Aviation trials with several airlines including United and Qantas have been successfully completed using fuel blends of up to 40 percent algae-derived fuel.

Algae was initially raised in large shallow ponds which produced about 5,000 gallons per acre-year and required a fair amount of water to compensate for evaporation. More recently, companies have migrated to vertical photo bio-reactors (PBRs) that are gravity fed, with no evaporation, and in which 85 percent of the water is recycled along with excess nutrients and CO2.

Here is a list of pros and cons for algae-based biofuels.


  • Bio-based fuel with essentially carbon neutral combustion
  • Drop in replacement for petroleum-based liquid fuels
  • Inherently renewable
  • Absorbs carbon dioxide as it grows
  • Both waste CO2 and wastewater can be used as nutrients
  • Higher energy per-acre than other bio-fuels
  • Can be grown on land unsuitable for other types of agriculture
  • Scalable: Study found that 17 percent of U.S. oil imports could be met with algae
  • Investments are being made
  • Production is presently scaling up (Navy buying 100,000 gallons this year)
  • Research has been underway for 50 years


  • Need to be grown under controlled temperature conditions
  • Requires a considerable amount of land and water
  • Cold flow issues with algal biofuel
  • Some researchers using genetic engineering to develop optimal algae strains
  • Requires phosphorus as a fertilizer which is becoming scarce
  • Fertilizer production is carbon dependent
  • Relatively high upfront capital costs
  • Not clear yet what the ultimate cost per gallon will be. Presently too high.

In summary, algae-based bio-fuel is a promising energy source that is in the latter stages of development. A number of issues related to the ultimate cost of the product need to be resolved, but there is a good deal of research money going into this as production is beginning to scale up. Land issues can be addressed using marginal land. Water can be recycled in reactors. Cold flow issues might result in the fuels being blended with other fuels or possibly additives. Fertilizer issues could be addressed using waste streams, thereby recycling the critical nutrients. Time will tell, though I believe this is an important technology to watch.


Learn about the future of biofuels here.

What about other energy sources?

[Image credit: xalamay: Flickr Creative Commons]


RP Siegel, PE, is the President of Rain Mountain LLC. He is also the co-author of the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water. Now available on Kindle.

Follow RP Siegel on Twitter.


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  • http://twitter.com/AlgaeObserver Algae Observer

    Algae are definitely promising, but we still need time to get the fuels from algae economically
    feasible. Concerning “carbon neutral” – this is only true when the process is optimized along the whole value chain! Sadly major investments are only done in the US. Europe is still asleep on that…

    • Jan van Beilen

      Apart from the fact that biomass yields are much lower than claimed (in reality not much higher than regular agriculture) and that costs are very high (at least 10, but often over 100 times more expensive biomass production costs, especially in closed systems), algae simply doesn’t deliver net energy: the energy content of the fuel is lower than all inputs needed for cultivating, feeding, harvesting and processing, and building the infrastructure (all life-cycle analysis papers say essentially the same).

      So Europe is wise to hold back, now that first generation biofuels have been shown to produce more GHG-emissions than fossil fuels. Many biodiesel and bioethanol plants will close as the EC is more and more likely to decide that biofuels don’t deliver on their promises by any measure.

  • dduggerbiocepts

    The article exaggerates the positive side and glosses over the negatives:

    Algae and other biofuels are not carbon neutral – especially at commercial scale. They are dependent on very large  amounts of NPK fertilizers which are made using… petroleum (N is made with natural gas and P – phosphorous and K potassium are dependent on petroleum fuels in their mining processes. This is the same NPK that food crops depend and compete for along with biofuels. Some biofuel experts calculate that a global biofuel industry would quadruple our current NPK demand – shortening the time until we economically run out of critical nutrients like phosphates. http://seekingalpha.com/article/182522-taking-stock-of-phosphorus-and-biofuels

    The assumption that the algae biofuel nutrients can be recycled while technically possible hasn’t proven to be practical economically. Efforts at recycling processed algae nutrients show that they can’t just be put into the next algae bio-reactor system without fouling the living algae in those systems and transferring potential pathogens (a biosecurity “no-no” to start with). In addition, most of the nutrients have undergone chemical changes and the “used” nutrients in the algae remains are no longer bio-available – and have to be reprocessed using industrial techniques – much like the original NPK fertilizer to make the nutrients once again bio-available. This is something most biofuel producers are not going to be technically and economically prepared to do because of a general lack of economies of scale these processes require. Reprocessing “used” nutrients for recycling also takes even more energy – which is currently 85% supplied by fossil fuels – another missing calculation in basic biofuel economics and carbon neutrality calculations. Because of lack of economies of scale – the recycled nutrients currently could actually cost algae producers more than buying fresh NPK – which further underlines biofuels dependence on NPK.

    Not understanding algae and other biofuels dependence on petroleum linked NPK fertilizers also makes it difficult to understand that their production economics are also linked to petroleum. As peak petroleum and peak phosphate become more pronounced over the next 30 years in the form of rising fuel and fertilizer costs – so will the costs of biofuels making them even more difficult to compete with other energy sources. This is the insanity of trying to avert the affects of a peak petroluem and peak phosphate crises using a process dependent on… peak petroleum and peak phosphates. This isn’t just my opinion – every major mass balance study done to date (MIT, Rand, U of K and others) have concluded that any at scale biofuel industry sufficiently large to offset our current global energy demands – would be dependent on NPK. (http://krex.k-state.edu/dspace/handle/2097/6243).

    Those who think biofuels will get us off foreign energy dependence really haven’t looked at the problem in depth and for the long term. The US and has very limited NPK component reserves which are increasingly being depleted by our food production- particularly phosphates. Recent phosphate reserves analysis show that 85% of the global phosphate reserves are in Morocco and Western Sahara – where we will eventually have to go for the phosphates in our NPK. So, biofuels gets us off our of our dependence on oil in the ME… and then – makes us dependent on fertilizer from N Africa. Biofuels are a risky and a poor use of basic commodities that our growing human population’s critical food stocks depend upon. Especially considering that this energy production could just as well and more economically be accomplished with solar, wind, tide, and safer thorium nuclear power. (http://www.mdpi.com/2071-1050/3/10/2027/)

    • RP Siegel

       Thanks ddugger. I did cover your two points about carbon neutrality and phosphorus in the text, though clearly with a different emphasis. For clarity, I modified the pros and cons list to more clearly reflect this. Thanks for your input.

  • dduggerbiocepts

    I appreciate the acknowledgment. The economic confluence of affects between peak oil prices and phosphate reserve quantification (economically feasible/mine-able phosphate reserves decline with increase fuel prices – meaning less phosphates and higher NPK prices) – and the real economics of industrial biofuels is probably worth an entire article or even a book – as something totally over looked by enlarge regarding biofuels.

  • http://pulse.yahoo.com/_AWDKOFZWBN765S22EN6T5GXQKE Tom

    I don’t think we are smart. We will definitely run out of phosphorous the way we get it. There is a ton of wastewater out there that is loaded with phosphorous and needs to be cleaned. Algae can do that. There is a lot of CO2 out there and it needs to be capture and stored somewhere. Algae can do that. I believe the technology is out there. It’s just going to take someone who can find the right formula and put it together in a cost effective way. I believe that day is coming. It has to. The world will run out of oil sooner rather than later.

  • http://pulse.yahoo.com/_AWDKOFZWBN765S22EN6T5GXQKE Tom

    I will add this study about the feasibility of waste water for algae biomass.


  • asdf

    that was deep manaaahaaan.

  • Ken Skaggs

    I think algae fuel is amazing. Unlike ethanol, it doesn’t require the same space our food needs to grow- it can be grown indoors. Maybe Exon-Mobile or Bill Gates will build some tall buildings to make it in. They are both heavily invested in it. See: http://freightraters.com/2012/12/algae-fuel-could-be-huge-the-future-of-biofuels/ With investors like those, I’d call that validation.

  • http://www.evjart.com madeinhawaii

    I thought Phosphorous and Nitrogen are byproducts of sewage reprocessing? Now, if we could simply skim the algae there when it blooms instead of having to remove the phosphorous, wouldn’t that mitigate a few steps?