Algae Business by Riggs Eckelberry Algae Oil in China

Algae Oil in China

August 2, 2011
AlgaeIndustryMagazine.com

Integrating  carbon capture with algae products production could prove a major win  for China.Recently, Australia’s largest ethanol producer, Manildra, diversified its biofuel portfolio by entering into algae production. In cooperation with Atlanta-based Algae Tec, Manildra will build a demonstration facility near Manildra’s ethanol production plant in Nowra, south of Sydney.

Australia’s algae oil rush is fueled by a combination of tough emissions control standards and state-by-state biofuels mandates. Carbon emitters will pay a $23 dollar per metric ton tax starting in 2012, which has accelerated a boom for carbon capture and biofuels, whose consumption increased 34% from 2009 to 2010. The Manildra-Algae Tec demonstration offers both. Algae Tec photobioreactor modules will use carbon dioxide produced by ethanol processing to feed algae, which consumes two parts CO2 for every part algae produced.

To a company like Manildra, with established operations throughout Indonesia and sales throughout the Asian rim, China inevitably figures in its market calculations. China surpassed the United Kingdom and United States as Australia’s major trade partner in 2006, and unlike most wealthy nations’ balance sheet with the world’s fastest-growing economy, Australia maintains a healthy balance of payments. Manildra originally entered ethanol production as a way to generate downstream value from its wheat-based starch and gluten production for industrial use. China deregulated wheat imports in 2010, and Australian wheat exports immediately more than tripled. Manildra began retail sale exports to China this year, with 200 tons of Canola oil.

Separate from its Manildra partnership, Algae Tec has also entered into a partnership with Hong Kong-based Pacific Minerals, and Australian RKD International, to introduce its algae production technology to China.

But is China a ready market?

On the surface, it may not look that way. To the world’s biggest greenhouse gas emitter, green energy does not immediately appear to top the list of national priorities. Beijing residents see the sun only as a hazy circle. Industrial provinces tolerate a continuous gray, dry, drizzle of particular coal dust. And China seems intent on maintaining economic growth ahead of environmental concerns. A convergence of conditions, however, could soon make China the world’s largest market for algae oil.

In 1997 China became a net oil importer and, with that status, victim to the same insecurities of foreign oil dependency that bedevil North America and Western Europe. For a nation asserting global leadership, that creates an independence imperative. China is now the Middle East’s largest oil customer, and despite its aggressive export sales, has announced national goals for increased energy self-sufficiency.

Coal is an alternative; but coal gasification is an expensive substitute for petroleum. And even to meet its current electrical and industrial output, China has been forced to turn to imports. As with wheat, and in spite of its vast coal production, China has had to turn to Australian coal, which now ranks behind only iron ore as Australia’s leading China export.

China has a centrally-mandated, decentralized-implemented capacity to focus on  simultaneous economic, social and environmental goals.
Like other nations, China has launched an aggressive alternative fuels campaign, mandating 15% of total transportation fuels from biofuels by 2020. But China’s principal reliance on ethanol directly conflicts with food policy and needs. With less than 10% arable land for one fifth of the world’s population, food for fuel is a disappearing option. In listing the reasons for diversifying into algae oil, Manildra cited the two conditions that summarize China’s energy dilemma: rising oil prices and the increasing reluctance to use food products for oil.

What China does have is vast amounts of land, sunlight, non-potable water, and labor, along with an immediate imperative to find productive work for the millions of people displaced by water- and energy-driven water projects. It also has a centrally-mandated, decentralized-implemented capacity to focus on simultaneous economic, social and environmental goals.

All these are ripe conditions for algae oil. Another is China’s established demand for algae products that can add profitability to algae oil production for high-end chemicals and nutraceuticals, fertilizers and foods. Chinese eat seventy species of algae, including the highly-prized fat choy, a dark, silky, strand resembling fine vermicelli. As a nutraceutical, algae-based oils in China have long rivaled fish oil as health supplements. Chinese companies already produce for a mass market in algae powder. Algae-based feeds and fertilizers already command large markets in fish-farming aquaculture, commercial meat, and fertilizer industries.

Integrating carbon capture with algae products production could prove a major win for China.

It would require a policy turn and priority change for China to venture into major algae production. But China is full of surprises, and has repeatedly shown that when it changes policy, it can do so at scale and with a speed that astonishes the rest of the world. Who would have believed, even a decade ago, that China would be the world’s supplier of wind and solar equipment? Or that, even for the brief period of the 2008 Summer Olympics, Beijing residents would see the sun?

Early signs point to a tentative algae commitment. Governmentally-subsidized researchers are hunting for local algae strains. Clean tech companies are exploding, and a May 2011 Chinese new energy IPO found ready investors in the London market. Chinese energy technology giant ENN is testing out algae production to complement its carbon capture technology at a 327-acre research facility an hour outside Beijing.

When he stepped down as Australia’s ambassador to China in 2010, career international trade diplomat Geoff Raby said that China’s coal-fired electrical output was unsustainable, and that carbon capture presented Australia with a major export opportunity. The right mix of carbon capture and algae oil production could offer the world’s fastest growing economy, with a fifth of the world’s population, exactly what they’re looking for.

That would change more than any game. That would change the world.

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
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...
University of Adelaide researchers are using nanotechnology and the fossils of diatoms to develop a novel chemical-free and resistance-free way of protecting stored grain...
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...
Solazyme, Inc. has announced results for the fourth quarter and full year ended December 31, 2013. “2013 was a year of great progress for Solazyme as we readied our first...
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...
One of 12 winners of the 2014 Lexus Design Award, the Ooho algae balloon was created by three London-based designers to contribute a solution to the rising number of plas...
As the number of photobioreactors in an algae growing operation increases, there is a need for both autonomous control and monitoring of individual PBRs, as well as centr...
“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...
Santa Fe Community College has been awarded a $50,000, SEED Infrastructure Grant from the Experimental Program to Stimulate Competitive Research (EPSCoR), for commercial ...
Although the use of whole microalgae in animal diets has long been studied, the 
de-fatted biomass of microalgal species, derived from biofuel production research, has on...
Four years after the first optimistic calculations, the experimental cultivation of algae at Wageningen University in the Netherlands appears to be meeting expectations. ...
The Guardian reports that Prince Edward Island (P.E.I.), Canada-based Solarvest has created an inventive system utilizing a specific algal strain to grow and produce EPA ...
A recent discovery in the multicellular green alga, Volvox carteri,has revealed the origin of male and female sexes, showing how they evolved from a more primitive mating...
Perth, Western Australia-based Algae.Tec Limited has announced that the Reliance Group has converted the first tranche of options following the positive progress achieved...
Following a request from the European Commission, the European Food Safety Authority (EFSA) Panel on Dietetic Products, Nutrition and Allergies (NDA) was recently asked t...
Matthew Carr was recently named executive director of the Algae Biomass Organization (ABO), the leading trade association for the algae industry. His presence will soon b...
Bookending the upcoming Algae Biomass Summit, Sept. 29-Oct.2 in San Diego, will be industry tours to give attendees a first-hand look at the latest progress in technical ...
The EPA has released the Annual Use of Pesticides in the U.S. Report. We now know that American farmers apply roughly a billion pounds of toxic chemicals intentionally in...