**2. World's scenario**

The concept of using algae as feedstock's for biofuels was already being discussed 50 years ago but a concerted effort began with the oil crisis in the 1970s. In this series Japan and United State focused on research programs. Main focus of The United State Department of Energy's was production of biodiesel from microalgae (1978-1996), which is known as the Aquatic Species Program (ASP). Japan Government also financed some large research project, but none of them has proven economical on a large scale, due to mainly the production methods used to grow and harvest the algae.

Notwithstanding the technical challenges, the availability of suitable land, in terms of soil type, elevation and slope, in suitable climates (incident radiation, temperature, precipitation/ evaporation balances and severe weather), and the geographical nearness of this land to appropriate water and CO2 inputs and possibly nearness to markets or transportation infra‐ structure may impose physical and economic limits to the contribution that algal biofuel can make to the world's future transportation fuel needs. For example, very few large CO2 emissions sources are in close proximity to regions identified as being most suitable for year round, large scale open pond production systems. In fact, there is an absence of data that could be used in defining limits of production. Land use, land suitability and resource spatial mapping data compiled for the purpose of assessing the geographic potential of algal biofuels does not exist. Claims that algal biofuels could completely replace all petroleum derived transport fuels or even provide a significant contribution to liquid fuels on simple assessment seem improbable, but can be neither supported nor refuted. There is a need to develop this information.

There are as yet no pilot (>100 mt algal biomass/yr) photosynthetic algal biofuels production plants operating in the U.S. The few pre-pilot-scale (e.g. >10 mt) plants have operated for less than a year, with only rather smaller operations of a few hundred square meters operating for two or more years (e.g. *Seambiotic in Israel*, *Aurora Biofuels* in *Florida*, for example). As mentioned above, *Solazyme* is the front runner with the largest confirmed production of algal lipids for energy customers to date, using a closed heterotrophic process and genetically modified algae. Three fairly advanced developers who are or will be breaking ground on the next scale demonstrations (20-200 acres) within the next year are *Phycal, Cellana, Sapphire*, and *General Atomics*. All use open pond designs and natural strains. The main interest in microalgae stems from its potential productivity on a per acre-year basis. Claims of current and future relative productivity levels range from 1000 to 5000-plus gallons per acre per year and are summarized in Table 10.

Actual productivity numbers, like other agricultural crops and industrial processes, are highly dependent on the specific site and production process used. At least one company has demonstrated actual productivity in its proprietary process of at least 1400 gal/acre/ year in 2010 for a non-optimized small experimental site in a warm-weather location and estimates productivity could be doubled in the next demonstration at the multi-acre scale. These demonstrated results and model for the next phase were validated by an independent federal agency and review team through the U.S. Pacific Command's Green initiative for Fuels Transition (GIFTPAC) interagency working group, under the leadership of the U.S. Pacific Command Energy Office, J81 Joint Innovation and Experimentation Division, Resources and Assessment Directorate. It is important to remember that these productivity numbers are only for the oil; algae organisms range from 10% of their body mass in oil and up, so for each gallon of fuel produced, a significant proportion of protein and carbohydrates are produced as well. *Cellana Co*. in *Hawaii* (a joint venture of *Shell Oil Co*. and *H.R. Biopetroleum, Inc*.) has operated a pre-pilot plant of between one and two acres to grow diatoms using the *Mera Pharmaceuti‐ cals* ponds at the *Natural Energy Laboratory of Hawaii Authority* (NELHA) near *Kona, Hawaii*. The technology was based on prior experience with production of Haematococcus pluvialis biomass by *Aquasearch Co*. in *Hawaii.* Its neighbor at *NELHA*, *Cyanotech*, is one of the traditional nutraceutical companies mentioned above; *Cyanotech* sold \$7 million worth of algae-derived astaxanthin in 2009.

**2. World's scenario**

102 Biofuels - Status and Perspective

**Table 1.** Average Production for various Oil Crops

to grow and harvest the algae.

information.

The concept of using algae as feedstock's for biofuels was already being discussed 50 years ago but a concerted effort began with the oil crisis in the 1970s. In this series Japan and United State focused on research programs. Main focus of The United State Department of Energy's was production of biodiesel from microalgae (1978-1996), which is known as the Aquatic Species Program (ASP). Japan Government also financed some large research project, but none of them has proven economical on a large scale, due to mainly the production methods used

**Plant Gallons of Oil/Acre lb. Oil per Acre Algae** 700 6757 **Coconut** 285 2070 **Jatropha** 201 1460 **Rapeseed** 126 915 **Peanut** 112 815 **Sunflower** 99 720 **Soybean** 62 450

Notwithstanding the technical challenges, the availability of suitable land, in terms of soil type, elevation and slope, in suitable climates (incident radiation, temperature, precipitation/ evaporation balances and severe weather), and the geographical nearness of this land to appropriate water and CO2 inputs and possibly nearness to markets or transportation infra‐ structure may impose physical and economic limits to the contribution that algal biofuel can make to the world's future transportation fuel needs. For example, very few large CO2 emissions sources are in close proximity to regions identified as being most suitable for year round, large scale open pond production systems. In fact, there is an absence of data that could be used in defining limits of production. Land use, land suitability and resource spatial mapping data compiled for the purpose of assessing the geographic potential of algal biofuels does not exist. Claims that algal biofuels could completely replace all petroleum derived transport fuels or even provide a significant contribution to liquid fuels on simple assessment seem improbable, but can be neither supported nor refuted. There is a need to develop this

There are as yet no pilot (>100 mt algal biomass/yr) photosynthetic algal biofuels production plants operating in the U.S. The few pre-pilot-scale (e.g. >10 mt) plants have operated for less than a year, with only rather smaller operations of a few hundred square meters operating for two or more years (e.g. *Seambiotic in Israel*, *Aurora Biofuels* in *Florida*, for example). As mentioned above, *Solazyme* is the front runner with the largest confirmed production of algal lipids for *Sapphire Energy Co*. of *San Diego* was awarded over \$100 million in U.S. government grants and loans and is breaking ground on a 300-acre demonstration pilot plant in New Mexico. Sapphire Energy initially announced that it would produce algae oil with oil-excreting genetically modified algae (GMA), but now intends to follow the standard model of growing unmodified algae with naturally high oil content. *Phycal* of Ohio was awarded over \$50 million in Depart‐ ment of Energy carbon recycling funds to develop a pilot plant on *Oahu, Hawaii. General Atomics*, in *San Diego*, received about \$30 million from the U.S. *Department of Defense, Defense Advanced Research Projects Agency*, (*DARPA*) in 2008 to develop a low-cost (\$3/gallon initially, \$1/gallon later) process for microalgae oil production in an 18-month R&D effort to be followed by a demonstration of this technology over a further 18 months in Hawaii, *Texas*, and *California*. The economic analysis and underlying assumptions on which current projections of \$3/gallon oil are based are proprietary-however they include significant animal feed coproduct credits.

The contribution of algal biofuels to future liquid transportation fuel supply is assessed against the *US Energy Information Agency* growth projections. By 2030, oil consumption is expected to increase to ca. 6.2 TL yr-1(106 million bbl d-1) with66 % of this growth likely to occur in non-OECD countries in *Asia*. Transportation fuel use is expected to grow slightly to ca. 56% of total oil production. Over the same time period, biofuels will maintain a relatively steady share of unconventional liquid fuel production and grow to between 277 GL/yr & 416 GL/yr (4.8 to 7.2 million Bbl/d, or 8.0% to 12.0% of the liquid transportation fuel supply). The EIA uses a figure of ca. 340 GL/yr as a reference case for total biofuel production in 2030.

A 5% contribution of algal biofuels to total biofuels supply by 2030 would require the con‐ struction of 170 100 ML facilities. When the technical uncertainty is considered it seems unlikely that the first large scale plant would be commissioned before the middle of the coming decade, and even this would be ambitious. Approaches that rely on molecular biology to achieve breakthroughs, e.g., the partnership between *Synthetic Genomics Inc*. and *ExxonMobil Corp*., are promising but will likely take more than a decade to reach commercial viability. Assuming success in the first commercial venture and accelerated rates of adoption beyond 2015-2020, 170 100 ML facilities could conceivably be operational by 2030 as this rate of construction is lower than the recent development rate of ethanol plants in the *US* and *Brazil*. The forty-plus companies tackling the concept of algae production on a large scale for energy use have begun to differentiate into market niches, generally according to their founding technical expertise and physical location.

Companies where the founding members had deep pharmaceutical or bioengineering expertise tend to build their business models around proprietary genetically modified organisms and closed systems. Examples include *Synthetic Genomics, Solazyme, LS9, Targeted Growth, Inc., Amyris, Heliae Development*, and *Algenol*. Companies derived from other industries such as defense, wastewater treatment, and agriculture tend to prefer open pond systems and natural strains. Examples include *General Atomics, SAIC, HR Biopetroleum/Cellana, Aquaflow Bionomics,* and *Phyco Biosciences*.

Companies headquartered in colder latitudes tend to focus on closed algae production systems. Examples include *Solazyme, Amyris Biotechnologies, Algae@Work, Algaedyne,* Heliae, and *Greenfuels Technologies Inc* (now defunct). Companies headquartered in warmer latitudes tend to focus on open-pond photosynthetic systems. Examples include *Sapphire Energy, General Atomics, HR Biopetroleum/Cellana, SAIC*, and *Seambiotic* in *Israel*.

Some companies are pursuing a hybrid approach. One example is *Ohio-based Phycal Inc*., which plans to use an open-pond system at its *Hawaii* demonstration site to grow out the algae, then put them into a closed heterotrophic for "fattening" prior to harvest. *HR Biopetroleum/Cellana* also uses a hybrid system, where the seedstock are grown in closed photobioreactor systems to reduce contamination and then inoculated into open ponds for bulking up in volume prior to harvest.

Every algae company has at least one other major revenue stream in its business model beyond just lipid production for biofuels markets. That co-product tends to affect its selection of sites, strains, production processes, etc. Some examples include a valuable co-product stream from animal feed (*General Atomics*), human food or nutraceuticals (*Solazyme, LiveFuels*), specialty chemicals (*Amyris*), carbon capture and storage (*Phycal Inc., Algae@Work*), and wastewater treatment (*Aquaflow Bionomics*). Within the closed process market niche is a group of companies that use a non-photosynthetic approach to grow their algae. This "heterotrophic" process involves feeding the microalgae sugar in the absence of light to get them to boost their proportion of oil relative to carbohydrates and proteins. An example is *Solazyme*, which is notable in being the first algae Energy Company to complete commercial sales of algae oil specifically for fuel, by delivering over 20,000 gallons of jet fuel (JP5) and marine diesel (F-76) to the *Defense Logistics Agency*.
