Why microalgal biofuel is (potentially) the most impactful energy technology you’ve never heard of

Author: Alexander Khor

Imagine this: the technology to produce a sustainable source of liquid fuel, that is not only renewable, but also have the ability to remove notorious greenhouse gas CO2 from the atmosphere in the process? Introducing microalgal biofuels, (potentially) the most significant energy ‘technology’ you’ve probably never heard of. You have many questions, I empathise. You’re thinking: what are microalgae anyway? How can they make biofuels? Is it really renewable? Why hasn’t it worked yet? Whilst there isn’t sufficient space or time for a detailed discussion, this article aims to outline what microalgal biofuels are exactly, their potential in replacing fossil fuels and address some of the growing pains in producing them1.

Microalgae are microscopic, usually unicellular and photosynthetic organisms. Perhaps you may know algae as pond scum or remember them from those pesky algal blooms, but in reality, algae are an incredibly diverse group of organisms, whose overarching phylogenetic diversity is estimated to reach over a million species, of which only ~50,000 have have been identified2. This biodiversity mean that there is an inherently wide range of metabolisms within these microorganisms, resulting in a unique ability to produce an even wider range of biomolecules with a myriad of commercial use cases. In theory, microalgae are simply microscopic plants that only require water, sunlight and carbon dioxide to grow - elements that are in abundant in nature. Using microalgae as a ‘chassis’3, a variety of useful compounds such as carotenoids have been produced for cosmetics chemistry; antioxidants, peptides and various sterols as supplements/drugs and perhaps most importantly, fatty acids, which can be converted into one of two types of fuels4: bioethanol5 and biodiesel. Coupled with the recent advent of genetic engineering and synthetic biology technologies (perhaps most significantly the infamous CRISPR/Cas9 system)6, researchers have begun to uncover new tools and techniques to manipulate these organisms to produce specific compounds at high purities and speeds. This means that conceptually, we are able to ‘design’ microalgae to exude features desirable for harvest, as well as manipulate them to produce any biomolecule desired7.

Naturally, the greatest application of this technology lies in its potential to replace fossil fuels as humanity’s primary source of energy in the form of biofuels8. Microalgal biofuels have been subsequently coined the ‘Third Generation Biofuels’9. Given this claim, microalgae have somewhat become an obsession amongst scientists and businessmen alike. For the businessman, the opportunity of an organism that can, in theory, produce any compound from scratch ‘cleanly’ using nothing but water, carbon dioxide and sunlight is highly marketable to a public that is increasingly aware of the state of the Earth. For scientists, it catalyses the race to discover the ‘best’ methods to manipulate microalgae to increase both efficiency and yield of biofuel generation. The implied gravity of microalgal technology has drawn considerable interest over the past twenty years. A Forbes article published June 201810 examines the considerable investments that Royal Dutch Shell and the US Department of Energy have in algae farming and biofuel production. Other major investors in microalgal technology include Exxon Mobil, partnered with Synthetic Genomics, the Bill and Melinda Gates Foundation and British Algoil11.

Amazing! Why hasn’t it worked?

Up till now, we have acquired the invaluable knowledge and technologies to harvest biofuels from microalgae. However, the production of biofuels this way is still largely unsustainable. The reasons as to why are manifold and complex, but can be boiled down into two major categories that also fittingly describes the energy industry in a nutshell:

1. Cost

2. Energy Balance

Despite its immediately apparent advantages, the commercial production of microalgal biofuels is extremely costly in comparison to traditional fossil fuels. This is largely because the downstream processing of biofuels require expensive equipment, and is faced a series of worries such as contamination, environmental change, and various technical challenges which all have an associated cost. Most of the cost here is incurred by the dewatering12 and harvest processes which are estimated to account for 90% of the production costs. This is compounded by the fact that major competitor to biofuels, fossil fuels themselves, are relatively cheap (at the time writing, crude oil is $62.32 USD per barrel) in comparison to the most optimistic estimations for microalgal biodiesel (estimated to be $140 USD per barrel, according to Reuters in 201013).

More importantly, a key barrier lies in overcoming the negative energy balance of microalgal biofuels. It is currently estimated that the production of any form of fuel14 from microalgae is energetically negative - that is to say, more energy is invested into generating fuels from microalgae versus the energy within the fuel itself. Further accounting for logistical problems such as localising large amounts of CO2 and water (which may seem trivial, but is actually much more challenging than one might think), energy required to sterilise and prepare materials, and transport of product, the overall energy balance renders biofuel production a largely futile exercise, except in some extremely narrow circumstances.

Consequently, many a biotechnology start-up initially set on producing biofuels from microalgae have pivoted to producing other more valuable biomolecules for other industries, given the intrinsic financial incentives to do so15. Only a handful of companies remain; most notably, Algenol, who were founded in 2009 and are based in Florida. Algenol is widely considered to be the most promising algae biofuel start-up, but even their success is predicated upon the heavy subsidies that they receive from the US government16. As a result, many have ruled out microalgae as a sustainable option to replace fossil fuels entirely.

Despite this, many believe that there is still value in producing biofuels this way given that the scarcity of fossil fuels will force us to more sustainable sources of energy, regardless of cost. There is a belief that yield and efficiency of production of strains can be improved upon using genetic engineering techniques, which may increase its viability. Regardless, investments into algal fuel have also inadvertently leapfrogged microalgal engineering technologies, which are widely applicable to other industries. For example, recent years have seen the successful commercialisation of phycobiliproteins from a red alga, which are useful red or blue pigments that act as safe colourants for cosmetics and food17.

Barring significant breakthroughs in technologies to increase yield and production efficiencies, the notion of microalgal biofuels replacing fossil fuels completely is a likely a long shot. However, microalgae still holds incredible potential as a bio-factories to produce various high-value compounds and perhaps, may still form part of the inevitably complex, multi-pronged solution to our diminishing fossil fuel reserves.

Non-academic references/ further reading:

  1. https://www.marketwatch.com/press-release/biofuels-market-size-historical-growth-analysisopportunities-and-forecast-to-2024-2019-05-17

  2. https://www.chathamhouse.org/publications/papers/view/190783

  3. https://oilprice.com/Alternative-Energy/Biofuels/Why-are-we-not-Drowning-in-Algae-Biofuel.html

  4. https://www.energy.gov/sites/prod/files/2016/06/f33/national_algal_biofuels_technology_review.pdf

  5. https://www.reuters.com/article/idUS108599411820101122

  6. https://www.biofuelwatch.org.uk/wp-content/uploads/Algenol-Report.pdf

Jargon-heavy academic reviews:

  1. Behera, S. et al. (2 Spolaore, P. et al. (2006) ‘Commercial applications of microalgae’, Journal of Bioscience and Bioengineering, 101(2), pp. 87–96. doi: 10.1263/jbb.10

  2. Peng, K. et al. (2018) ‘The Bioeconomy of Microalgal Biofuels’, in, pp. 157–169. doi:


  1. Lam, M. K. and Lee, K. T. (2015) ‘Bioethanol Production from Microalgae’, Handbook of Marine Microalgae. Academic Press, pp. 197–208. doi: 10.1016/B978-0-12-800776-1.00012-1.015

  2. ‘Scope of Algae as Third Generation Biofuels’, Frontiers in Bioengineering and Biotechnology. Frontiers, 2, p. 90. doi: 10.3389/fbioe.2014.00090.

  3. Nymark, M. et al. (2016) ‘A CRISPR/Cas9 system adapted for gene editing in marine algae’,

Scientific Reports. Nature Publishing Group, 6(1), p. 24951. doi: 10.1038/srep24951.

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