Five Key Strategies For Algae Biofuels Commercialization: Faster, Fatter, Cheaper, Easier, and Fractionation

by Biofuels Digest columnist Will Thurmond

In a new study on the algae biofuels and biomass market: Algae 2020 (460 pages, June 2009), five key strategies emerged as approaches to help producers to reduce costs and accelerate the commercialization of algae biodiesel, biocrude, and drop in fuels : Fatter, faster, cheaper, easier, and fractionation marketing.

The following is an excerpt from Algae 2020 that summarized these five key criteria for systems innovations and cost reductions.

1: Faster. A primary strategy for most algae biofuels producers is to identify algae species that have a high oil content, that will also grow quickly to produce biodiesel, biocrude and drop-in fuels.

It is largely agreed among seasoned practitioners, phycologists, producers, and subject matter experts that algae with high oil content such as Botryococcus braunii (Bb) grows slowly and can be harvested only a few times a week, whereas algae with lower oil content such as Dunaliella or Nannochloropsis (in the 20-40% range) will grow more quickly and can be harvested daily or a few times a day. For this reason, most algae R&D projects and pre-commercial projects are using algal strains with 20-40% content.

2: Fatter. Algae producers are especially interested in utilizing algal species with a  high triglyceride (TAG) oil content for biodiesel and biocrude production. Compared to most algae used today for production with 25% oil content, several scientists and producers are working on identifying species and methods to increase oil content.  Most algae systems today can generate from 2500 gallons up to 5,000 gallons of oil per acre using 30% oil content.

If algae producers can utilize fatter algae with 60% oil content, they can will help to reduce the size and footprint of algae biofuels production system by as much as half, resulting in significant capital and operating costs for systems twice their size with utilizing algal species with lower oil content. This presents a significant innovation and a welcome improvement for algae producers.

3: Cheaper. Based on the examination of several algae business and economic models, the Algae 2020 study finds the estimated costs to produce algae oils and algae biodiesel today range from $9 to $25 per gallon in ponds, and from $15 to $40 in photobioreactors (PBRs) today.  Reducing these costs are critical for commercial success. An outstanding, significant economic challenge for algae producers is identifying low cost  oil extraction and harvesting methods used for algae.

A dozen or so companies are now coming up with breakthrough and innovative methods to bring costs down below for extraction and harvesting. Extraction systems can be expensive with estimates up to $15 per gallon of oil produced depending on the extraction method. One company, Missing Link Technology that can extract algae for less than $.25 USD per gallon compared to other algae extraction methods ranging from $2 a gallon up to $12 per gallon.

Another example is a harvesting technology from Algae Venture Systems that costs less than $.30 per gallon of oil produced compared to traditional centrifuge technologies which can cost upwards of $1 or more per gallon of algae oil. Cost reductions in algae production systems are essential for algae producers to establish economically sustainable and profitable enterprises.

4: Easier/Better. The Algae 2020 study has identified  algae producers are now employing for easier and better methods of producing algae for biodiesel, biocrude and drop-in fuels.  Since algae production systems are a complex composite of several sub-sets of systems (i.e. production, harvesting, extraction, drying, systems), reducing the number of steps and algae biofuels production systems leads to easier, better, and lower-cost systems.  For example, OriginOil has developed a technology to combine harvesting and extraction systems into a single process that reduces system complexity and costs for algae producers.

Another example is to employ a method that utilizes algae species and cells as mini-processors and refineries in a process referred to as  “milking the algae” that will excrete hydrocarbon fuels directly such as Arizona State’s blue-green algae that excretes a kerosene type of jet fuel or Algenol’s blue-green algae that consumes and excretes ethanol fuel directly. There are also a few species of algae that will naturally excrete oils from the cells.

By ‘milking the algae,’ these algal micro-refineries helps to bypass the harvesting, extraction and refining systems all together by excreting forms of biofuels directly from the cells. These methods lead to significant cost reductions, and help to simplify complex processes for emerging algae producers and customers of new algae biofuels production systems.

5: Co-Product Fraction Marketing Strategies. These are critical to success.  Even with algae species with up to 50% oil content, the additional 50% biomass remains. This biomass fraction contains valuable proteins for livestock, poultry and fish feed additives valued from $800 up to $2500 per ton.

Part of the oil fraction, the FFAs or Free Fatty Acids can produce DHA, Omega 3 and Omega 6 heart healthy oils, as well as valuable products such as Beta Carotene and other supplements from carotenoids. Other fractions of the algae contain valuable chemicals or molecular compounds that can be used to produce green plastics, green detergents, cleaners, etc that are bio-degradable, non-toxic, and can be sold at a premium price over traditional petroleum based products. The biomass co-product marketing strategies will be critical to the success for aspiring algae biodiesel and drop-in fuel producers

The Algae 2020 study finds these five strategies- fatter, faster, cheaper, easier, and co product marketing – provide the key pathways and innovations that will help to accelerate the commercial success of algal biomass and biofuel production companies.

Will Thurmond is president of biofuels consulting firm Emerging Markets Online, and author of Algae 2020: Advanced Biofuels and Commercialization Outlook.  For more info, visit www.emerging-markets.com.

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