Surveying the Algae Industry

By Mary Rosenthal | April 02, 2013

When Congress finally made algae eligible for a biofuel tax credit in January, it was capping off a year of extraordinary progress for the companies and research institutions working to make algae biomass a sustainable and economical source of countless products. In 2012, algae-based fuels were successfully demonstrated in military aircraft and ships, and were introduced into commercial markets for automotive fuel. Algae also made advances as an agricultural feed, and even as a source of lower-cost anti-cancer treatments.

The future that these industry and policy developments are helping to build can now be put into further context, with the results of a recent survey the Algae Biomass Organization conducted of algae industry experts, researchers and enthusiasts. More than 470 people from every segment of the algae industry, almost 90 more than 2012, participated in the 2013 Algae Industry Survey. As in 2012, respondents this year  continue their optimism that algae fuels will be price-competitive within the decade, that production and hiring will increase in both the short and long term, and that improved supportive federal policy could significantly benefit the industry’s development of algae-based fuels, feeds, fertilizers and other products.

The fact that these trends stayed positive in this year is perhaps the most encouraging finding of the survey. Last year, the algae industry was heavily criticized during the presidential primaries, biofuel use by the military came under heavy assault by powerful interests, and sustainability research was reaching only vague conclusions about algae’s potential. Despite these challenges, the industry continues to hold steady in its optimism. This is true of those who categorized themselves as producers as well as everyone else.

Naturally, the question on everybody’s mind is when fuels derived from algal biomass might become cost-competitive with their fossil fuel counterparts. More than 90 percent overall (and 95 percent of producers) believe it is at least somewhat likely that algae-based fuels will be able to compete with fossil fuels by 2020, and nearly 70 percent overall (75 percent of producers) believe it is moderately likely to extremely likely. Nearly one in four (23 percent) of producers say the price will be below $3 per gallon by 2020.

Those numbers are remarkably similar to the results of ABO’s 2012 Industry Survey, which means we are one more year into the decade and the industry’s confidence remains high.

We also found the algae industry is aggressive about pursuing products beyond fuels. More than a quarter of producers reported being involved in fuels, but even more (35 percent) reported looking at algal biomass for its potential in feeds. More than one in four are eyeing nutritional and nutraceutical markets, and others indicated their interest in markets for algae-derived chemicals, plastics, fertilizers and more.

Those same producers indicated optimism in increasing their production levels over the next year. Twenty-five percent reported they would be expanding at an existing facility, 22 percent said they would expand with new facilities, and 20 percent reported expansion and both new and existing facilities.

On hiring prospects, almost 90 percent of employers said better federal policy support would accelerate job growth in the industry. Employers did predict job growth for 2013, along with larger projections for 2020.

Of course, like any advanced feedstock, algae still has challenges to overcome. Our survey respondents identified the two challenges that are the most significant in making cost-competitive, algae-based fuels. The most-favored response by far was “cost-efficient production systems,” selected by 44 percent, followed by “harvesting and extraction systems,” selected by 21 percent of producers.
These challenges may not come as a surprise to anybody following the impressive efforts of algae companies to meet and exceed the commercialization milestones of the past year. Yet, we all know these accomplishments are just the stepping stones to full commercial operations.

The steady and optimistic results of ABO’s 2013 survey, the executive summary of which is posted on the ABO website, should encourage all of us working to commercialize sustainable sources of biomass for fuels and other products.

Author: Mary Rosenthal
Executive Director, Algae Biomass Organization