The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Are We There Yet? The Positioning and Repositioning of the Algae Industry

An agreeable reporter from KPBS San Diego visited with the Digest this past week while working on a short segment, contrasting the progress of algae companies today to the promise seen when the BIO International Convention last visited San Diego in 2008.

The premise of the article was “Then, there was a lot of talk about fuels. Today, there’s more talk about nutraceuticals, food and feed. What happened?”

Then and Now

There are good reasons to ask hard questions.

Then, it was Aurora Biofuels — now it’s Aurora Algae. Then, it was Solix Biofuels, now it is Solix Biosystems. Then, Solazyme was generally focused on being a fuel company, now it is a “renewable oils” company more focused on higher-value, higher-margin products like Encapso drilling oils and Algenist health & beauty products.

Then, it was “the summer of algae,” and ExxonMobil was running an awful lot of commercials about its investments in algae-based fuels. Now, the commercials are long gone.

Have the Market Drivers Really Changed?

Recently here in Digestville, we had an opportunity to look back at the Algae 2020 study that Emerging Markets released back in 2009, at the height of the algae craze.

Will Thurmond, the study’s author, saw three key trends:

Then, he projected “Investment in Diversified Products – Not Just Biofuels: Proteins for Animal Feed, Pharma/Nutraceutical Products (DHA and Omega 3-6 Heart-Healthy Oils), Cosmetics (Facial Creams) and Bio-Degradable Polymers, Plastics and Environmentally Friendly Green Chemicals, Detergents, Solvents.”

He described algae then as one feedstock for “a diversified portfolio of products,” noting that “algae products are and will be used to manufacture fuel, feed, food, fertilizer, plastics and green chemicals. Algae meal will be a protein supplement for aquatic and livestock/poultry feeds. Noting at the time that 30 percent of the biomass would likely be the algae oil fraction for biofuels and green chemicals.

He noted in 2009 that “the higher-value, multi-product focus is essential for cash flow for start-ups, and part of a diversified, targeted marketing strategy to generate revenues.”


Noting that “Aging Baby-Boomers increasingly use more health product supplements, protein, fiber and facial creams,” he wrote that “Algae co-product market strategies: co-products besides biofuels are critical to success,” indentifying:

  • Proteins & Carbs for Animal Feed
  • Bio-Degradable Polymers, Plastics
  • Environmentally Friendly Green Chemicals, Detergents, Solvents
  • Nutraceutical Products: Heart-Healthy Omega 3-6 Oils, DHA Fish Oils & Cosmetic Products – i.e. Facial Creams


He modeled a market that focused first on pharmaceutical and specialty chemical products based on prices between $25,000 to $800,000 per metric ton — during the 2009-2012 period.

During the 2011-2015 period, he pegged that pharmaceutical, chemical and nutraceutical markets would dominate, with price points between $2000 and $25,000 per metric ton, including: omega-3s, food additives, plastics and high value chemicals, cosmetic industry products and additives, baby formula supplements, and livestock markets with higher-value animal protein, fish and livestock feed additives.

Fuel markets, he projected would come later — depending on the scale of the ventures involved, he pegged a 2018-2025 timeline.


Algae Repositioned?

So — have algae companies repositioned? Not really. Some investors and quick-buck artists have moved on. But crop-based investors have arrived on the scene.

ADM has partnered with Solazyme to place production at its Clinton, IA facility. Bunge has established a massive JV with Solazyme, and the two are reaching commercial-scale down in Brazil just now. Monsanto has invested in Sapphire Energy, looking not only to empower a new crop, but possibly to find attractive traits in algae that can be adapted in other crops of interest. And the Mars family — owners of huge pet food and human nutrition brands — has invested deeply in Heliae.


Though, it is not all upstream companies. Valero remains invested in Algenol, Phillips 66 has partnered with Sapphire Energy, and India’s refining giant Reliance Industries has invested quite a lot of money in recent years, also primarily in Algenol. DSM has invested more deeply in acquiring Martek.


Delays there have been — some of it pegged to the food and feed markets. For example, Aurora Algae, which has been working hard at its business for seven years now, is just this year hoping to receive GRAS (generally regarded as safe) approval for its protein — essential to releasing a product to the market.

Now, in the case of 30 percent oil content — excepting companies that pyrolize the entire algae biomass — there are going to be 3.3 pounds of proteins and carbs for every pound of oils. So those USDA approvals, slow though they are, are critical to making fuels, as well.

Perception vs Reality

So what happened? To some extent, occasional observers have been influenced by the television commercials. Even in the “summer of algae”, the dominant production capacity was owned by Cyanotech, Earthrise and Martek — all focused on nutraceuticals.


The Timeline Problem

It took 56 years from the Titusville oil strike in Pennsylvania until petroleum was generally dominant in road transportation fuels.

Petroleum started out as a replacement for, by and large, heating and lamp oil. The concern of the era was not Peak Oil, but Peak Whale — as whale oil supplies were not able to keep up with expanding demand. Then, gasoline was often discarded as a waste by-product. And it wasn’t until World War II that petroleum began to comprehensively replace coal as a feedstock for chemicals — more than 80 years after Titusville.

The Bottom Line

What is being built are crop companies, not fuel companies or nutraceutical companies. They’ll sell their biomass to the highest bidder. As Will Thurmond projected five years ago, these are the “middle years” where the focus is on “omega-3s, food additives, plastics and high value chemicals, cosmetic industry products and additives, baby formula supplements, and livestock markets with higher-value animal protein, fish and livestock feed additives.”

How soon will individual companies get down their cost curve and into the bigger chemical and fuel markets? Algenol CEO Paul Woods is projects a cost of $1.27 per gallon for ethanol. Solazyme’s 100,000 metric ton plant is now open for business. But we won’t likely see fuels until the higher value markets are saturated — and, in this way, the innovation going on at algae companies — developing new higher-value formulations — may well be pushing that day out rather than making it closer.

This article was originally published on Biofuels Digest and was republished with permission.

Lead image: Algae fuel via Shutterstock

Untitled Document

Get All the Renewable Energy World News Delivered to Your Inbox - FREE!

Subscribe to Renewable Energy World Magazine and our award-winning e-Newsletter to stay up to date on current news and industry trends.

 Subscribe Now



DOE Releases Final Programmatic Environmental Impact Statement for Hawaii

Jennifer Delony DOE released a final programmatic environmental impact statement for Hawaii to provide federal, state and county gove...

The 800 Ways Taxpayer Money Supports Fossil Fuel Industries

Reed Landberg, Bloomberg As world leaders converge on New York for a United Nations gathering that’s expected to have a strong emphasis on cli...

Makers of Fuel From Plants Feel Forsaken in Obama’s Climate Push

Mario Parker, Bloomberg Producers of motor fuels from plant waste say they have been left behind in President Barack Obama’s push to fight cl...
clean energy

Report: Vermont Clean Energy Sector Jobs Increased 9.8 Percent Since 2013

Jennifer Delony Vermont saw a 9.8 percent increase in clean energy sector jobs since 2013, and jobs in the sector are expected to gro...


US Solar Hosts Sierra Club Solar Meeting

This past Monday, US Solar welcomed a new group to its solar training classroom – The S...

US Solar Invited to Speak at Intersolar North America

Intersolar, the largest solar conference and expo in North America is right around the ...

US Solar - Green Planet Festival Highlights Solar Energy and Solar Training This Weekend

US Solar Institute (USSI) is excited to announce that they are the educational sponsor ...

Yaskawa – Solectria Solar Provides Inverters for One of the Largest Professional Sport Stadium PV Systems in North America

Yaskawa - Solectria Solar, a leading U.S. PV inverter manufacturer, announced today tha...


Solar Decathlon 2015 Opens to the Public in California

Today, Oct. 8, the biennial Solar Decathlon opened up to the public at Orange County Great Park in Irvine, ...

ENER-G CHP technology selected for major London housing scheme

ENER-G has been selected to supply combined heat and power (CHP) technology for phase two of the Leopold Estate housi...


Necessity is the mother of innovation. Our planet is going through major changes in climate. This of course will affe...

Georgia Legislature Approves PPA’s, Florida Hoping to Follow

Ah, the sunny south, the land of peaches, oranges and solar potential. I’m talking about Georgia and Florida he...



Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Biogas 3: free online trainings on sustainable small-scale biogas f...

The main objective of BIOGAS3 (Sustainable Small-scale biogas production...

International Energy and Sustainability Conference 2015

The fourth International Energy and Sustainability Conference will be he...

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...


New coating extends cylinder life 8 times longer than traditional c...

Hydroelectric turbine systems operate in extremely harsh conditions. The...

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

SAP for Utilities Blog

The Eventful Group produces the annual SAP for Utilites Conference ...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now