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Is Algae Based Biofuel a Great Green Investment Opportunity

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Why Algae based Biofuels

Algae Based Biofuels have been hyped in the media as a potential panacea to our Crude Oil based Transportation problems. The advantages of Algae Biofuels are being propagated by strong backers like Bill Gates ,Rockefeller family and Exxon Mobil.Crop based biofuels have been discredited because of their pernicious effects on Food Prices and increasing rather than reducing GHG emissions.First Generation Crop based Biofuels are clearly not the answer to substitute Crude Oil based Transportation fuels.Second Generation Biofuels based on Algae is now the new hope for Biofuel enthusiasts.

Advantages of  Algae based Biofuels

The advantages of algae based biofuels makes for impressive reading.The main advantages of algae based biofuels are

  1. More Productive Land Usage compared to traditional crop based biofuels from corn,soybean,sugar.

    Algae have the potential to yield greater volumes of biofuel per acre of production than other biofuel sources. Algae could yield more than 2000 gallons of fuel per acre per year of production. Approximate yields for other fuel sources are far lower:
    - Palm — 650 gallons per acre per year
    - Sugar cane — 450 gallons per acre per year
    - Corn — 250 gallons per acre per year
    - Soy — 50 gallons per acre per year

  2. Algae uses Carbon Dioxide as Feedstock thereby helping in reduction of one of the main reasons for Global Warming

    In the Sapphire process, 1 kilogram of algae biomass uses 1.8 kilograms of CO2. About 50 percent of that algal biomass is oil, so the production of each gallon of oil consumes 13 to 14 kilograms of the greenhouse gas, Zenk said.”You can see, it’s just completely packed full of that stuff,” Zenk said. “That’s what makes it one of the most unique plants on planet Earth for consumption of carbon.”

  3. The Fuels generated through them have the same specifications that can be directly be used by Planes and Automobiles.

Criticisms of Algae Based Biofuels

The main criticism leveled at Biofuels are that they are not ready for commercial production yet despite claims made by a number of algae biofuel startups.The  criticisms leveled at algae based biofuels are

  1. Algae based biofuels uses a lot of Energy and Water and may lead to more GHG emissions than crop based biofuels over its complete life-cycle
  2. The Technology for Biofuels is not still ready for Mass based production.It will still take around 10 years for the Technology of Algae Biofuels to become ready for the prime time.

Algae Biofuel Companies

There are a number of startups in this space just like the other green fields sectors of Electric Vehicles , Solar and Wind.Some are hyped more than others like Solyndra and will end up in failure. The more famous ones are Solazyme,Sapphire Energy and Synthetic Genomics, Inc.Most of these companies are private and have strong backers.There are also some publicly listed companies like Codexis and Petroalgae for investors wanting a piece of the algae based biofuel action.Here is an article from Earth2Tech which gives the most comprehensive list of  Startups in this Green Segment.

Summary

Algae Based Biofuels is a promising technology of which there is  little doubt .However Algae Biofuel still needs a lot of  time to move from the Lab to Commercial Production.Most of the opportunities mostly exist in the Private Equity and Venture Capital side and that too for people with really deep pockets like Bill Gates and Exxon.For the mainstream investor Algae Biofuel sector is still not a feasible investment opportunity yet.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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6 Responses so far | Have Your Say!

  1. Glenn2ns

    Another 2nd generation bio fuel which has been and may still be the 800 lb. gorilla is a weed indigenous to central america in the 19th century called – JATROPHA CURCAS. It is slightly toxic with a substance called casein (see pdf {linkinghub.elsevier.com/retrieve/pii/ S0278691508004924}) causing diarrhea in test rats. Therefore, it does not compete for food stock. This weed is being grown by the millions of square hectors in INDIA and far east countries on poor land that will not support food stocks. It produces a nut about the size of a plum with 2-5 seeds that bear a very large amount of oil. BP has partnered with D1 in developing hybrid jatropha lines to grow more steadfast and produce more oil/seed. The main problem with jatropha is that the 6′-15′ tree has fruit dispersed over its canopy and within, making harvesting a very labor intensive prospect. Efforts to automate this process have been unsuccessful in the last several years, with no known (to this author) effective means to harvest other than manual labor. This labor makes the production cost impractical in all environments except where labor costs are dearly poor. Needing any sub tropical climate, jatropha has been heavily planted in 2007-2009 (maybe 2010?) in Africa, India, Indonesia, Vietnam, (China has made efforts but is not well acclimatized), South America, and Central America. Parts of these areas have economics & climates conducive to successful jatropha production. The plant can bear oil seed nuts within 6 months, but maturity takes nearly 5 years with large production within a year. The trees can survive for 50years. See WSJ (blogs.wsj. com/environmentalcapital/…/bp-bets-on-the-jatropha-tree/).
    Jatropha does not compete with food stocks, can be planted and thrive in marginal soils, produces robust oil output, does well with grey water, and does a good job to inject capital into poor economy’s where labor and land are cheap. Investments upwards of billions of dollars have been chasing jatropha in recent years as algae has been problematic. Growing algae is easy and cheap but harvesting unto fuel has not been. LS9 in San Francisco claims to have developed technology to do so and has been attacking a lot of VC attention in recent months. Just the same jatropha is a 2nd generation biofuel feedstock that has been around forever, grows too easily, makes oil well and now fuels commercial aviation to a small degree.
    Synergistic models by-passing intermediate production steps to convert the nut to fuel exist, but are not broadly known. Additionally, these innovative processes reduce production costs greatly reducing off take wastes. contact California 714 478-1053

  2. Deandre Veigel

    I can’t figure out why bing sent me to your site but I might as well say I have been more or less captivated by the blog content you have aggregated together. How many week did it take this many arriving to your blog? I am very new to this web thing.

  3. Syam

    Algae biomass with incredibly low cost of production
    http://slidesha.re/cSPvob

  4. Satyendra

    Hi Abhishek,

    What are your views on chandigarh based Beckon Industries limited, which claimed to have break through technology to commercialize Algae based biofuels. The company has shown tremendous rise in their Half yearly PAT from 3.27 cr.in sep 09 to 10.81 cr. sep 10 too.It is also in collaboration with GTZ-Germany to produce feed stock for biofuels.

    Regards,

    Satyendra

  5. Abhishek Shah

    Have not seen profitable algae companies till now as the technology is still not mature.Beckon does not look to be technology company as such,not much information on the website as well.I would be careful about investing money in it.

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