Algae Business by Riggs Eckelberry Algae—Food or Chemical Grade?

Algae—Food or Chemical Grade?

May 10, 2011
AlgaeIndustryMagazine.com

This column expands on Riggs Eckelberry’s presentation to the European Algae Biomass Conference in London, 27-28 April 2011.

Eventually, we’ll have too many producers for what are still relatively small markets, but that’s hardly a problem today.There’s a big question planners should be asking themselves when they put together an algae production plan: are we trying to meet food-grade requirements for our algae? That critical question drives the overall shape of the operation and its business plan.

Making Nutritional Algae

Food-grade algae can be readily used for pharmaceuticals, nutritional products, food for people and animals, and fertilizer. It is already being produced in large quantities. For example, Martek’s algae DHA is already found in 99% of all baby food in the USA. And Solazyme’s algae, which is being made in volume for fuel customers like the Department of Defense, can be made just as easily into food as fuel.

It’s no accident that these large-scale players use the highly reliable “dark cycle” process: feeding their algae sugar or starch in sealed tanks, in what is known as heterotrophic growth. Meanwhile other companies, like Aurora Algae, are beginning to make food-grade algae in the sun: autotrophic growth. The environment is less controllable out there in the open, but there’s no question you can still achieve food-grade algae.

Like many other companies in algae today, Aurora concluded that the best markets for its algae were the high-value nutritional markets. And that’s true, for now. Eventually, we’ll have too many producers for what are still relatively small markets, but that’s hardly a problem today.

Garbage In, Garbage Out

The problem comes when you start trying to feed algae with waste products. Why? Because it makes economic sense—or because a polluter is going to fund your development. As we at OriginOil pointed out in our Algae Productivity Model, there’s lots of synergy between waste products and algae:

  • Algae need nitrate and phosphate to grow, and there’s plenty of that in sewage systems and agricultural runoff.
  • Algae need lots of CO2, and there are plenty of industrial CO2 emitters who are eager to reduce their emissions.
  • And in places where fresh water is valuable, you’ll want to use brackish or salty water instead.

It’s a great model: get paid to get rid of waste products that help your algae grow in a big way. Now… can you still get food-grade algae with these kinds of inputs? It’s not easy.

Burping Toxins

You can find plenty of clean CO2 in the world, but vast amounts of it comes out of smokestacks. That’s a source of both synergy and headaches.

At the recent European Algae Biomass Conference in London, I was talking to someone who is using CO2 from a power plant. That grower described how occasionally a “burp” of sulfur dioxide would make it past the scrubbing systems. That’s no longer a very clean algae crop.

There’s lots of synergy between waste products and algae.Now maybe they can get away with heavy metals in fish oil (and it’s there), but I think that with algae, the public is going to be less tolerant of toxin levels. If it’s nutritional-grade, it’s got to be free of toxins—zero-tolerance.

And just try to get your nitrates from a sewage system. Your algae won’t be food grade, or at least you’ll never convince the public that it is, which amounts to the same thing. So if you want to be paid for using up waste products, you’re pretty much out of the nutritionals game.

Does that mean we’re stuck with fuel?

Competing with Petroleum

Energy is the monster market. And the price of petroleum rises steadily all the time, despite the occasional pull-back when the Middle East seems to be momentarily a safer place. But in the petroleum industry, the money is in the chemicals: 90% of crude oil goes into fuel, but 40% of the profits come from petrochemicals.

So chemicals are more profitable than fuel, while being a huge market too. In fact, the bio-based chemicals market is expected to generate US$56.9 billion in sales by 2015. (GIA Global Strategic Business Report: Renewable Chemicals)

Remember how in the late nineties, Amazon.com came along and took the easy, most profitable sales from the bookstores? It took another decade to really kill them. In the same way, renewables are going to start with the most valuable petroleum fractions, hollowing out energy company profits.

Bio-plastics: it’s the future, son.

The point is, we don’t have to be challenged to make algae for less than the well-subsidized price of gasoline or diesel: we can skim the cream with the valuable chemical fractions.

Making Fuel and Petrochemicals

Now if we’re making petroleum fractions, we can generally use waste products. As we documented in our 2009 Algae Productivity Model, that makes a big difference to the bottom line. Here are just two of the ways to go about making algae for fuel and petrochemicals:

  1. Full extraction and fractionation. That’s where you separate the lipids and the biomass, and then get further fractions from there. This typically yields the highest-quality products, because the organic structures are largely unharmed.
  2. Minimal extraction, leading to an industrial process to make “biocrude”. (There’s no room here to discuss more specific topics like bio-oil.) When I say biocrude, I mean something that can eventually be refined for one, some or all of the petroleum fractions.

Refineries need tens of thousands of barrels per day to keep operating.There are benefits to each path, but if I were designing a VERY large-scale algae production operation fed by industrial waste, I might go for the second method because of its simplicity and scalability. You can make a very high-throughput biocrude operation. If we’re going to compete with petroleum even with the high-grade chemical fractions, we are going to need lots of scale: refineries need tens of thousands of barrels per day to keep operating.

The CO2 Factor

In last month’s column, I mentioned that CO2 is the “Killer App”.

This fact was underlined in my recent trip to Washington for the Advanced Biofuels Leadership Conference, where I asked the Austrade delegation if the recent change of government from Liberal to Conservative would mean that their strong carbon policies would be weakened. The Austrade speaker answered unhesitatingly that Australia has already spent AU$2 Billion on geo-sequestration solutions, and is ready to spend more on bio-capture, a bargain by comparison. More importantly, CO2 abatement is an export technology for Australia!

My point is that much large-scale algae development is being driven by carbon regulation. This in turn drives the agenda away from nutritionals to petrochemicals. Over time we will see continued development of these two sides: food- and chemical-grade algae. There’s a strong future in both, but algae planners should be well aware which they are pursuing.

Go to HOME Page

Copyright ©2010-2011 AlgaeIndustryMagazine.com. All rights reserved. Permission granted to reprint this article in its entirety. Must include copyright statement and live hyperlinks. Contact editorial@algaeindustrymagazine.com. A.I.M. accepts unsolicited manuscripts for consideration, and takes no responsibility for the validity of claims made in submitted editorial.

Visit the A.I.M. Archives

AIM interview ArchivesAlgae 101 ArchivesHot Products ArchivesInnovations ArchivesMoney ArchivesProcess ArchivesResearch ArchivesScale Up ArchivesThe Buzz Archives

FREE Algae News & Updates

Sign up to receive breaking A.I.M. updates! 

From The A.I.M. Archives

— Refresh Page for More Choices
OriginOil Inc. has announced a collaboration with Israel’s AquaGreen Fish Farms, Ltd. to further streamline their zero-discharge aquaculture systems for the production of...
Heliae, SCHOTT North America and Arizona State University (ASU) have announced a partnership to bring Heliae’s algae production technology to ASU’s algae testbed facility...
Algae.Tec Ltd has received its first purchase order from Reliance Industrial Investments and Holdings Limited (RIIHL), in connection with the arrangements announced on Ja...
In a global scenario where increasing attention is being directed towards issues of sustainability and limited food supplies, algal sources offer immense scope for the ra...
Valensa International and Contract Biotics have announced that Contract Biotics has started construction of an additional six acres of algae production units at the compa...
Algae is being discussed at the heart of EXPO Milano 2015, the international event that has existed since 1851, spawning world shaping themes and icons, such as the Eiffe...
Libourne, France-based Fermentalg, an industrial biotechnology company that specializes in the production of oils and proteins derived from microalgae, has completed a su...
Students from three Arizona universities will demonstrate their algae research projects at an Innovation Showcase May 1, in Arizona State University’s Sun Devil Fitness C...
“Proterro has reached its Q1 sugar-production pilot milestones,” CEO Kef Kasdin reported at the recent Advanced Biofuels Leadership Conference, in Washington, D.C. “In fo...
Yereth Rosen reports in the Anchorage Daily News that scientists at North Carolina State University’s Plants for Human Health Institute have found extremely high levels o...
A series of articles by Stephen Mayfield and the UCSD Laboratory deserve recognition for their articles on algae-based medicines for malaria and cancer. Mayfield and his ...
Algal oil represents one of the significant segments within the omega-3 polyunsaturated fatty acid (PUFA) ingredients market. Specifically, docosahexaenoic acid (DHA) is ...
In Phys.Org, Yu Yonehara notes the breakthrough research from the Tokyo Institute of Technology on the connection between early marine algae and the development of terres...
A University of New South Wales (UNSW)-led team of researchers has discovered how algae that survive in very low levels of light are able to switch on and off a weird qua...
Jamie Radford writes in the Illawarra Mercury that Pia Winberg, from the University of Wollongong, believes that the South Coast of New South Wales, Australia (NSW) is in...
Algae Industry Magazine is pleased to announce a new Algae 101 series by our popular blogger, Mark Edwards, Professor, Arizona State University. The Algae Solutions to Na...
Algae manufacturer Cyanotech Corporation has announced implementing three major initiatives to improve Astaxanthin production at their Kailua Kona, Hawaii-based cultivati...
Biofuels derived from the oils produced by algae may offer a low-cost sustainable alternative to fossil fuels. To achieve this goal, optimization of cost effective strate...