Market study: Emerging opportunities for algae biofuels to supplement fossil fuels

Emerging opportunities for algal biofuels, particularly in the Persian Gulf region, may propel the success of the industry, a new market study by Future Market Insights finds.

Algae was first discovered as a fuel alternative in 1978 under the leadership of US president Jimmy Carter at a time when fuel prices were high, demand was high, and supply was low and depleting at the same time, the costs of exploring fuel fields and carrying out oil refining procedures were exorbitantly high and continued to skyrocket.

Algae biofuel is an alternative fossil fuel that uses algae to generate biodiesel, biobutanol, biogasoline, methane, ethanol, hydrogen derived renewable fuel, and jet fuel.

Half of algae’s composition by weight is a lipid oil, which has been targeted for conversion into biodiesel that will burn more efficiently than conventional petroleum. 

A new concept of algaculture has come up to produce biofuels, as algae costs more per unit than other bio fuel crops but is claimed to yield 10 to 100 times more fuel per unit area.

In 2014, the prices of oil were between $56 to $120 (€49.2-€105.5) per barrel, while the cost of producing microalgae biomass in 2014 was $2.95/kg through photobioreactors.

If the annual biomass production capacity is increased to 1,000 tonnes, then the cost will reduce to $1.5/kg for a litre of crude oil.

The extraction of biofuels from algae is largely dependent on organic solvents such as benzene.

The Persian Gulf

Gulf Cooperation Council (GCC) is estimated to achieve 1.6% of the world GDP, according to the World Bank, and the GCC crude oil production in 2020 is forecasted to be approximately 24 million barrel/day.

Although GCC countries are the leaders in fossil fuel production, they are taking initiatives for large scale production of renewable sources of energy.

Algae biofuels present a great opportunity to compensate for the environmental impact of the oil and gas industries in the GCC, as the area has a wide coastline that stretches across its countries and is ideal for algae production.

The carbon dioxide emissions from oil and power refineries can be effectively utilised and the climate is also favourable for algae cultivation, and the waste water treatment plants are also a vital source of algae.

Biofuel is likely to be an addition to the energy mix of GCC countries in the foreseeable future, rather than a competitor to petroleum based oil.

This scenario in GCC will be a reality in the long run if the technology required for it, for instance photobioreactors, becomes a feasible option. 

The US Government strongly backs the research on biofuels and has pledged to invest $24 million to commercialise algae-based biofuels.

Several governments around the world have started funding initiatives to make biofuel commercially available for satisfying the future wants of the world and it will impact GCC positively.