Pike Research

Algae-Based Biofuels Production to Reach 61 Million Gallons per Year by 2020, Forecasts Pike Research

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Source: Pike Research

BOULDER, Colo. - In the face of petroleum scarcity, increasing oil prices, market volatility, and climate change, leaders in government and industry are looking to renewable fuel sources such as algae-based biofuels to reduce expenses and mitigate their acute vulnerability to petroleum supply chains.Yielding 2 to 20 times more oil per acre than leading oilseed crops, algae’s productivity and scalability are seen as its greatest advantages, and a number of key industry players are gearing up their operations to meet the opportunity.Algae biofuels have the added advantage of utilizing non food-based feedstock, with the abilities to grow on non-arable land and utilize a wide variety of water resources including wastewater and seawater.

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.

“On paper, algae could displace worldwide petroleum use altogether, however, the industry has yet to produce a drop of oil for commercial production,” says Pike Research president Clint Wheelock.“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.”Wheelock 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 is poised to 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 is home to 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.

Pike Research’s study, “Algae-Based Biofuels”, examines the key growth drivers behind the algae-based biofuels market and outlines unresolved supply challenges.It compares advantages and disadvantages of algae production pathways, leading cultivation technologies, and end-market opportunities.The report includes detailed 10-year market forecasts, segmented by world region, along with analysis of market conditions in key countries and profiles of key industry players that are shaping the emerging algae biofuels business. An Executive Summary of the report is available for free download on the firm’s website.

 

Customer comments

  1. By Peter Hurrell on

    I think that we have all appreciated this issue before and apart from a few of us the majority of those in the industry have not appreciated the significance of the issue. The report suggests that the market potential by 2020 is barely 240 Million litres of Renewable Fuels from Algae! I wonder whether this is correct and is under-stated by several factors! The first thing that is obvious to many, and one which this report alludes to - but does not necessarily round on, is the fact that the two sources of algae to which reference is made (indirectly) are distinctly different. Micro-Algae and the small particulates that are being looked at for developing oils and Diesel substitutes are one area and they constitute an amazing variety of organisms which - in the natural - support the production of 50% of the World's Oxygen. They are seen in the natural Algae Blooms that are noticed from outer-space from satellites, and they form one of the most interesting basic source of food for many other organisms. Macro-Algae which is also prevalent is observed as a plant-like material we incorrectly name as "Sea-weed(s)" and "Kelp(s.)" We are perhaps more familiar with these through our experiences in the oceans as being typically observed in the massive growths in the up-welling zones around Namibia and NW Europe or in the Kelp Forests off the Americas and New Zealand and the Sargasso Sea and in some of the major "Inland Lakes" such as Baykal and Balkash or we see them washed up as debris after storms in places like those off the Koreas, Mombassa (Kenya,) Chile or Malta. Developing these natural resources of algae is but one of the areas of great potential but it must not be carried out in detriment to the natural ecological and environmental benefits they deliver to the World. Tamper with Nature at your peril! Just look at the results of over-fishing around Japan and see if this is related to the growth of the giant Nomura Jelly-fish or whether it is as a consequence of destroying the natural Algae in the area between China and Korea/Japan! The inter-twining of such issues is so complex that it can not and must not be ignored. What seems to have captured the Public's attention is the development of the various strains of Micro-Algae in these various and controlled environmental situations such as that being followed by the major oil companies. Here the relevance of this research is very evidently pointed. Developing mass-arrays of Photo-Bio-Reactors to grow Micro-Algae works and the scale-up issues are interesting. The time-scale of the events though is questioned and the reasons for that are mixed and will be referred to a little later in this text. Less attention has however been placed upon the various Macro-Algae and the pace of developments and the vast steps taken in Israel and in Argentina and elsewhere. Developments so far in Hybrid Macro-Algae have resulted in tailoring the results to maximise the productivity of the these in farmed environs as well as in their formative content. Selective breeding Macro-Algae the yields per hectare are already producing in excess of 25 times the equivalent of other terrestrial sources of Biomass (dry mass) per hectare, and it is projected that developments are afoot to reach 40 times the equivalent by 2025! By selectively breeding Macro-Algae we can now modify the fundamental content of the algae so that we can pre-determine the content of the Biomass to maximise the Cellulose fraction to over 85% of the mass and at the same time limit the Hemi-Cellulose content, in addition to this the Macro-Algae can also be developed to produce other "more interesting" and valuable by-products. Growing Macro-Algae strains is fairly easy, as they can readily grow in shallow lagoons of salt-water or brackish water. This means that they would be suitable for use in desert areas and locations where salt-pans exist, next to the sea, next to power plants or chemical facilities that produce vast quantities of Carbon Dioxide (and N P and S pollutants.) Such uses including the Chemical Sequestration of Carbon Dioxide and its diversion into forming Macro-Algae holds out a far better use and is a more tenable and profitable option than CCS (Carbon Capture and Storage) for the resulting Biomass can then be used in the production of a Renewable Fuel that can be converted by simple physical-chemical processing techniques using techniques now coming to the fore in the EU UK Vietnam and the USA using the low-cost techniques and gravity pressure vessel developed by Genesyst with ease and confidence.to valuable fuels like Ethanol Butanol or Kerosenes (Aviation Fuels) at a lower cost than current methods. There is enormous potential here that should not be over-looked in the mad rush to develop the algae and the question has to be one which was raised earlier. Is the time-scale of 2020 right for the quantities envisaged? It is possible that it is but with any development throwing money at a development doesn't always result in a desired end-product that meets the specific needs. There needs to be a simultaneous approach towards the development of Algae - Renewable Fuels and with all the hype today concentrating in one direction there is an obvious omission of developments towards Macro-Algae. The European Union (unlike the USA) has already noted this and there is a charge under the current research programme to develop Renewable fuels from Micro-Algae. The PRC (Peoples Republic of China) and other countries in Asia as well as those already engaged in South America and the RSA (Republic of South Africa) are also looking at this area in a big way.