Top 11 Algae Biofuel and Biochemical Trends From 2011-2020

Texas, USA –The following article is an excerpt from a technology, investment, and market study titled Algae 2020, Vol 2 (2011 update) from market research firm Emerging Markets Online. The excerpt provides a summary of findings and highlights 11 key trends for the algae industry from 2011 to the year 2020.Renewable Oils for Biofuels and Biochems

The “brewery” model in algal biofuels ventures is known for low-cost, high tech production using standard industrial fermenters. Solazyme is leading the charge in the algae-based brewery/fermentation model, followed by veteran algae producer Martek with support from BP.  We expect to see companies similar to Solazyme emerging in 2011-2012 worldwide using the microbial brewery model to produce “Renewable Oils” via fermenting sugars as seen with Amyris (green crude and renewable diesel from yeast), Virent (green diesel), LS9 (renewable diesel from bacteria), and others emerging in this space.

Where there is cheap sugar, and cellulosic sugars from ag and industrial waste, these commercial ventures will find advantages. Where lower-cost, economically advantaged sugars are available in the U.S., EU, China and India, expect increasing military use for collaborative R&D deployment tests.

Biofuels and Drop-In Fuels

In the biggest markets in Europe, the U.S., Brazil, China and India, government mandates are requiring large oil and gas refiners to blend biofuels into their existing infrastructure. Most oil and gas companies facing blending mandates, military suppliers, and auto manufacturers and transport companies considering fleet-wide upgrades to higher biofuels blends wish to find fungible fuels that are compatible with existing engines, pipelines, storage systems and petrol stations.

Algae 2020, Vol 2 finds a common theme among algae leaders that have progressed into pilot and demonstration-scale projects. In addition to biodiesel and ethanol, these organizations are able to produce drop-in replacement fuels from microalgae, and blue-green algae also known as cyanobacteria and other microbes. Military, aviation, government, and petrochem organizations all demand fungible, drop-in fuels and prefer to work with advantaged producers with scalable technologies for R&D and deployment.

Green Chemicals and Polymers

In the capital markets, investors have far more confidence in market demand as a measure of long-term opportunity in transport fuels and petrochemical derivatives. For this reason, the early leaders in advanced algal and microbial fuels are diversifying and targeting existing petrol, diesel and aviation markets, as well as related biofuels markets for green chemicals, polymers and power generation. The diversification of biofuels companies beyond one fuel — ethanol and biodiesel — to include a portfolio of advanced biofuels represents a wise long-term strategy to inspire investor confidence.

Oleochemical Consumer Products

Algae 2020, Vol 2 observes an emerging trend in commercial and privately funded algae projects. Increasingly, the focus among start up and VC-backed algae ventures is on high-value products including: livestock and fishmeal, omega 3s, health products, cosmetic and pharmaceutical uses. Most algae farmers seek these highest value products for key addressable markets first, and then plan to scale up operations over time for commercial biofuels production.

Many ventures will pursue these high-value, addressable markets to develop cash flow for operations, resources and staff, and establish early brand identity. Analyst contributors to Algae 2020, Vol 2 see the high value, small market focus as the short-term strategy on the pathway to the mid to longer-term commercialization of biofuels.  The longer-term strategy for producing algal biofuels closer to petroleum price parity improves significantly as algae producers reach larger economies of scale in industrial, deployment-stage algal biomass production systems. 

Scalability