Investments Spark Speculation on Algal-Biodiesel

John Davis

Recent multi-million dollar investments in algae-biofuel companies ($200 million IPO for PetroAlgae and $52 million to help commercialize Solazyme) is fueling some speculation of its own on how soon algae-based biofuels, in particular, biodiesel, might be available for consumers and when it would be commercially competitive.

This article from Biofuel Digest breaks down the “bears” and “bulls” views of these investments, as well as the Digest’s take on these developments:

A significant number of voices in the community continue to caution that algal biofuels are 10 years away, or likely to arrive at commercial scale only in the waning years of the existing Renewable Fuel Standard. However, we see increasing numbers of signs of commercial traction in the higher priced co-products area, such as nutraceuticals.

With the global market for algae nutraceuticals at 5000 tonnes per year and not showing immense growth signs, algal producers will need to establish new markets rather than simply aim to use technology to flood existing markets with low-cost product. The nature of that transitional set of end products?

Food-grade oil may be one path.

The other: well, let’s spell it out in three words. United States military.

The article goes on to point out the U.S. Navy or Air Force are working actively to have as much as half of their fuel come from renewable energy as early as 2016. The authors also did their history, making parallels to the British Navy’s conversion in the late 19th and early 20th centuries from coal to oil … and how that move helped put the Brits on top of the world’s navies at the time. It also led to the rise of the Anglo-Persian Oil Company, now known as BP.

algae, Biodiesel, biofuels