Our analysis indicates that there is a clear need for the UK to develop new sustainable sources of liquid transport fuel which do not compete with land for food production or fresh water resource.
We estimate that by 2030 the algae biofuels industry could be worth over £15bn and has the potential to provide 12% of global aviation jet fuel, leading to carbon savings of over 160 MtCO2e, if the cost of production can be reduced by a factor of five to ten. The major advantage of algae over other biofuel feedstocks, in particular feedstocks that provide oil for jet fuel and diesel, such as palm, is that it is more sustainable from both an environmental and socio-economic perspective. Our carbon lifecycle analysis suggests that carbon savings of between 70% to 80% versus fossil-derived jet fuel and diesel should be possible. Just as importantly, because the cultivation of algae biofuels does not require fresh water or arable land and areal production yields are over five times greater than other biofuels, their production has the potential to significantly reduce pressure on agricultural land and forests; fresh water resources; biodiversity; and food and feed supply, with the concomitant potential to alleviate global poverty.
Detailed analysis by the Carbon Trust to identify suitable production sites across the world indicates that in the long term the technology has the potential to provide the majority of global aviation fuel. Our techno-economic modelling indicates that UK businesses could realise over £1bn in revenues from technology licensing, algae strain sales, and husbandry services by 2030. Producing nations in suitable climates and geographies could realise even more significant revenues and global resource-mapping analysis we have conducted indicates that 9 of the top 10 regions for algae cultivation are in developing or emerging nations. This creates a win-win-win opportunity for UK technology export, carbon reduction and international development.
Investment is needed in applied research
However, our assessment of algae biofuels technology is that despite recent investment activity (particularly in the USA) and significant downstream pull (particularly from the aviation industry which has few alternatives to next generation biofuels) it is several years from commercialisation and will require research and testing outdoors at increasingly larger scales over many years to reduce production costs by up to a factor of ten. Fortunately the UK has a world leading research capability in industrial biotechnology and it is for these reasons that in 2008 we launched the Algae Biofuels Challenge. The ABC was designed in four phases, as illustrated in Figure 1.
The original plan for the initiative was to use UK government support from the Department of Energy and Climate Change (DECC) and the Department for Transport (DFT) to fund Phase 1 in its entirety. A technology development company would then be spun-out from the Carbon Trust to attract private investment and deliver Phase 2 (reducing UK government support to significantly below 50% for Phase 2), and Phases 3 and 4 would be funded entirely by private finance. The technical objectives for the stage gates illustrated in Figure 1 are indicated in Table 1.
The Carbon Trust concluded that the production system that offers the greatest potential to achieve the ABC cost reduction targets comprises marine microalgae grown in open ponds (shallow, mixed, raceways) filled with seawater at a coastal location where the climate naturally offers suitable levels of insolation and temperature for at least 11 months of the year. This production system is illustrated in Figure 2.
An artist’s impression of this system is shown in Figure 3.
Progress to date
Between 2008 and 2011 we invested over £3m, to assess the opportunity, set up the initiative, run a competition to select the best 12 research teams from over 80 applications to meet our technical objectives, secure licenses to all intellectual property, and conduct the first year of research in Phase 1 (from Jan-2010 to Mar-2011). The 12 research teams involved in Phase 1 comprised 74 research scientists from 11 UK research institutions (25 full time equivalents). The 12 teams were supported by a Technology Advisory Panel comprised of four leading international experts in microalgae biofuels. Due to the constraints on public funding, the two funding departments decided to focus support on low carbon technologies that could be deployed in the UK and not to continue to support the programme beyond March 2011. We are currently seeking additional sources of funding, including private investment, to continue supporting work in this area.