Introduction

Algae are a varied group of mainly aquatic organisms fluctuating in size from microscopic specks to large seaweeds. You may not like to look at a pond covered in algae, but these organisms could just be a sustainable and profitable alternative in the realm of biofuels. Algae have fatty acid molecules containing oil that can be extracted to power diesel engines. Farmers could find special interest in biofuels since the demand for biofuels could increase overall farm income. This Fact File gives a detailed look at biofuels derived from algae. It explains the potential of this emerging biofuel and some policy approaches and incentives.

Background

Biofuels are transportation fuels like ethanol and biomass-based diesel fuel that are made from biomass resources. Typically, these fuels are blended with petroleum. But they can also be used alone.

First generation biofuels are made from sugar crops (sugarcane, sugarbeet), starch crops (corn, sorghum), oilseed crops (soybean, canola), and animal fats. Sugar and starch crops are changed through a fermentation process to form bioalcohols. Oils and animal fats can be processed into biodiesel. Second generation biofuels, or cellulosic biofuels, are made from cellulose. This is from non-food crops and waste biomass like corn stover, corncobs, straw, wood, and wood byproducts. The process to make them are more complex and underdeveloped compared to first generation biofuels. Third generation biofuels use algae as a feedstock. The process of turning algae to biofuel is not much different from other plants being used as biofuels. It starts by breaking down the cell structure of the algae to get the fatty acid molecules with the oil. This is done using solvents or sound waves. After the oil is extracted it is processed at an oil refinery.

Algae biofuel benefits and drawback

Biofuels produced from algae are attracting noteworthy interest and investment. Algae’s benefits as a biofuel include:

• High potential yield per acre
• Ability to grow on land not suited for agriculture
• Ability to grow in brackish or wastewater
• Absorption of carbon dioxide during growth
• Relative ease of conversion into fuels and products that are fully compatible with today’s vehicles, airplanes, and delivery systems.

In fact, algae can be grown in ponds, raceways, or custom-designed bioreactors. It can then be harvested to produce an abundance of fuel. Growing algae in such mass quantities could reduce the amount of carbon dioxide in the air. Algae can produce biomass very quickly. Some species double in as little as six hours. The issue with using algae for biomass lies in the amount of energy it takes to pull out the oils. A significant amount of research and development work must be done before algal biofuels will be cost-effective at a commercial scale. There are challenges when it comes to finding economical and sustainable ways to produce, harvest, extract, and convert the useful components into advanced biofuels.

Biofuel policy approaches and incentives

In 2005, the Energy Policy Act used a variety of economic incentives, like grants, income tax credits, subsidies, and loans to encourage biofuel research and development. It set a Renewable Fuel Standard that mandated the blending of 7.5 billion gallons of renewable fuels with gasoline each year by 2012.

The Energy Independence and Security Act of 2007 (EISA) included similar economic incentives as the Energy Policy Act. EISA expanded the Renewable Fuel Standard to increase biofuel production to 36 billion gallons by the year 2022. Of the later goal, 21 billion gallons must come from cellulosic biofuel or advanced biofuels resulting from feedstocks other than cornstarch. EISA gives cash awards, grants, subsidies, and loans for research and development biorefineries that shift over 80% of fossil fuels used to operate the refinery, and commercial uses of cellulosic biofuel. Aside from that, general tax credits currently support advanced biofuels, including cellulosic and biodiesel.

Applicable laws & regulations

40 CFR 80 – Regulation of Fuels and Fuel Additives

Related definitions

“Biodiesel” means a diesel fuel made from vegetable oils, animal fats, or recycled greases.

“Ethanol” means a clear, colorless alcohol made from an assortment of biomass materials called feedstocks.

“Solvent” means a liquid that is a single chemical or a mixture of chemicals used to dissolve a substance or material.

Key to remember

One of the main concerns with biofuel is the food vs. fuel debate. Some people are worried that quick expansion of first-generation biofuel production could impact global food production. Since first-generation biofuel crops compete directly with food, this could decrease food supply and increase prices of food. Therefore, second or third generation has increased in popularity. Since neither are food crops, it lessens the stress on human food production. Keep in mind that the only generation of biofuel production that is well established in terms of production, total efficiency, and research is first generation food crops. Algae has a long way to go to catch up to sugar, starch, and oilseed crop biofuels.

Real world example

In 2021, the Department of Energy awarded $18.7 million dollars to six projects aimed at improving algae farming practices to increase production. The projects investigate diverse strains and are finding ways to improve their growth. While many of the projects are headed by universities one was an algae company that aims to focus on increasing annual productivity by at least 20% while maintaining a minimum of 35% oil in the algae biomass. Another main goal of theirs is to have a projected cost of algae biofuel at $2.50 per gallon of gasoline equivalent with a 90% greenhouse gas reduction and 90% water use reduction. Projects and governmental funding like this are paving the way for a future that contains commercially successful biofuel from algae. With a bit more fine-tuning and research you may be part of that future too.