The goal, according to the Department of Energy, is to reduce the cost of algal biofuels to less than $5 per gasoline gallon equivalent (gge) by 2019. What’s more, this funding supports the development of a bio-economy that can help create green jobs, spur innovation, improve the environment, and achieve national energy security.

Algae biomass can be converted to advanced biofuels that offer promising alternatives to petroleum-based diesel and jet fuels. Additionally, algae¹ can be used to make a range of other valuable bio-products, such as industrial chemicals, bio-based polymers, and proteins. However, barriers related to algae cultivation, harvesting, and conversion to fuels and products need to be overcome to achieve the Department’s target of $3 per gge for advanced algal biofuels by 2030. To accomplish this goal, the Department is investing in applied research and development technologies that achieve higher biomass yields and overall values for the algae. 

The funding will support projects in two topic areas: Topic Area 1 awards (anticipated at 1–3 selections) will range from $5–10 million and focus on the development of algae cultures that, in addition to biofuels, produce valuable bio-products that increase the overall value of the biomass. Topic Area 2 awards (anticipated at 3–7 selections) will range from $0.5–1 million and will focus on the development of crop protection or carbon dioxide utilization technologies to boost biomass productivity in ways that lead to higher yields of algae.

1. Four algae projects that were announced for funding last year have started work in California, Hawaii, and New Mexico. These projects each are receiving from $1.5 million to $5 million from the Energy Department and are aimed at boosting the productivity of algae as a way to reduce cost. Funding allowed the selection of an additional project in July — Hawaii-based Cellana, Inc.’s algae feedstock production system. These projects will receiving funding through to 2016 and are helping BETO reach its 2018 yield goal of 2,500 gallons of algal feedstock.
2. In June, Neste Oil — the world’s largest producer of renewable diesel — agreed to purchase algae crude oil from Renewable Algal Energy, LLC, a microalgae products company that received Energy Department funding. RAE first proved the viability of its algal oil harvesting and extraction technologies with Energy Department funds, which helped the company to secure the off-take agreement with Neste Oil. This means RAE has its first customer, which is big step towards commercialization for its algal biofuels.
3. The Cornell Consortium, which received Energy Department funding starting in 2010, has made significant progress to improve algal productivity in designing a commercial-scale upstream algae cultivation and harvesting process. This year, the Cornell Consortium reached the Bioenergy Technologies Office’s milestone of improvement in algal productivity, increasing yield to 1,500 gallons of algal feedstock per acre per year.
4. The National Alliance of Advanced Biofuels and Bio-products released its close-out report, which details a combination of research advancements that together have the potential to reduce the cost of algae-based biofuels to $7.50 per gallon gasoline equivalent. These advancements include discovery and improvement of strains of algae that grow more quickly and have high lipid content, designing a higher-efficiency filtration system for harvesting algae from open pond systems, and developing a hydrothermal liquefaction conversion process.
5. Two reports from Pacific Northwest National Laboratory and the National Renewable Energy Laboratory, funded by the Energy Department, helped work toward the goals to reduce costs by clarifying what the greatest challenges are, using detailed modeled design scenarios. These design scenarios are the whole algae hydrothermal liquefaction technology pathway and the algal lipid extraction and upgrading technology pathway. While the focus of the reports was on the process improvements of the conversion pathways, analyses showed that cultivating algae accounts for the highest portion of the cost. Cultivation costs can be reduced by improving biomass yield (also a focus of the new funding opportunity). 

1. Algae are an attractive biofuel feedstock because they grow fast, absorb carbon dioxide, and can utilize waste resources, such as municipal waste water. Algae store energy from sunlight and can then be converted to advanced hydrocarbon fuel and used as a direct replacement for petroleum fuel. However, the current costs associated with producing, handling, and converting algal oil to fuel can make a gallon of algal biofuel very expensive.