Boulder, Colorado, USA – Algae has been getting a lot of attention lately as the U.S. continues to seek ways to effectively wean itself off its dependence on foreign oil. According to an announcement today from Pike Research, algae yields 2 to 20 times more oil per acre than leading oilseed crops and don’t interfere with the food supply, making algae a good place for research and development.
According to a new report from Pike Research, algae biofuels production will grow rapidly over the next decade, reaching 61 million gallons per year and a market value of $1.3 billion by 2020. While barely a drop in the bucket for biofuels, this represents a compound annual growth rate (CAGR) of 72%, roughly on par with early development in the biodiesel industry.
Of course many hurdles remain like the fact that algae has not yet produced any oil for commercial production and has very high production costs.
Although the algae-based biofuels market will grow rapidly once key cost hurdles are overcome, widespread scale-up will be hampered by a number of difficult challenges including access to nutrients, water, and private capital,” said Clint Wheelock Pike Research president. He adds that with the cost of production still a key obstacle to widespread production, many companies are refocusing production efforts on low-volume, high-value co-products to develop revenue streams over the next decade.
Pike Research anticipates that, with 50% of all algae activity, the United States could ramp up production the earliest among world markets. Pilot- and demonstration-scale facilities are beginning to break ground across the country.
The European Union (EU) market, which has about 30% of algae activity, will be limited initially by the industry’s focus on university research, and later by insufficient access to water, land, and nutrient sources. Latin America and Asia Pacific, which are home to fewer projects in operation today, are set to gain significant market share in the long run.
An Executive Summary of Pike Research’s study “Algae-Based Biofuels” can be downloaded for free.