Algae — green gold?

Anmar Frangoul

March 25, 2014

Solazyme has developed technology that enables it to create renewable oils from microalgae

For most of us, algae is the green, thick, clingy substance that's the scourge of ponds and pools. But for some companies, microalgae—or microscopic algae—is green gold, a substance with a wide variety of potential energy uses.

Californian clean-tech company Solazyme has developed technology that enables it to create renewable oils from microalgae. These oils can be used in a variety of ways, and the company already produces skincare products, food ingredients and industrial chemicals derived from microalgae.

"Solazyme was founded in 2003 on the idea that microalgae—an ancient oil producer—might hold the key to eliminating the world's dependence on fossil fuels," Graham Ellis, VP of business development at Solazyme, told CNBC.

"Since then, our vision—and our mission—has only grown."

Solazyme uses industrial fermentation equipment to convert plant sugars found in algae into renewable oils. These can be used to replace conventional fuel - the company already produces renewable diesel for cars and ships, as well as jet fuel - and help meet the world's burgeoning demand for fuel.

While we may think of algae as being green, that's not the case with Solazyme's: The company's production techniques do not use photosynthesis, so its microalgae is actually white, bearing little resemblance to pondscum.

"Oils are… subject to some of the most challenging issues facing our world today: finite and volatile resource supply, geopolitical conflict, disproportionate demand, negative environmental impact, and climate change," Ellis said.

"Solazyme's technology is the first and only bridge between plant-based sugars and oil. Between what the earth is good at making—carbohydrates—and what society and industry runs on: oils."

In 2010 Solazyme provided the U.S. Navy with more than 80,000 litres of diesel and jet fuel derived from algae, while in 2012 President Barack Obama praised biofuels produced from algae, stating, "We could replace up to 17 percent of the oil we import for transportation with this fuel that we can grow right here in the United States."

According to a study by the Pacific Northwest National Laboratory, the U.S. possesses enough water and land to produce 25 billion gallons of "algae based" fuel annually. Meanwhile, a 2013 report from Navigant Research estimated that by 2023, biofuel production will generate $7.6 billion in revenue.

It all sounds too good to be true, and critics have pointed to the cost and scalability of producing biofuels on a mass scale. So is the world ready to accept this kind of technology and these kinds of fuels?