Green Tech

In the race to make sustainably grown biofuels, algae is the great green hope.

Growing algae is not hard. But making enough to be competitive with fossil fuel prices has eluded the many companies and researchers betting on algae as a biofuel feedstock.

Solazyme CEO Jonathan Wolfson on Wednesday said that his company will be able to produce millions of gallons of algae-derived biodiesel in three years.

Solazyme's secret algae sauce. Click on image to see photo gallery from Solazyme's labs.

(Credit: James Martin/CNET )

The reason Solazyme is on a faster track than many others is because it is taking a very different technology path, he said in a conference call with biofuels writers. The biotechnology company developed a process built off existing industrial equipment for fermentation and oil extraction, he said.

Most algae companies plan to grow algae in glass bioreactors or open ponds. They then harvest the plant and then squeeze out the oil.

Solazyme grows specially optimized algae in the dark in a large tank by feeding it with plants. The algae is then fermented and turned into oil, he explained. Its biodiesel recently was certified to work in diesel cars and can be used in existing oil refineries.

To ramp up, the company plans to lease or build a plant in the next two years with an eye toward commercial-scale manufacturing--on the order of millions of gallons a year--in three years, Wolfson said.

He said that many companies that rely on photosynthesis exclusively to grow algae are being overly optimistic on the amount of land that's required.

"It's our perspective that most numbers (on algae yield) are far in excess of reality, some are beyond theoretical," Wolfson said. Producing less than 10,000 thousand of algae per acre is realistic, "but you're not going to see 100,00 gallons per acre any time soon."

Carbon pricing
Algae has tremendous promise as a fuel feedstock. The primary challenge is producing it at large scale, said Jim McMillan, a researcher on biomass refining at the National Renewable Energy Laboratory (NREL).

"We need to see a model that can be propagated at large scale. Once we see that model, then we can see that templated and brought forward," he said.

Notwithstanding Solazyme's claims of producing cost-competitive fuel in three years, McMillan said it's difficult to say whether it will take 5 or 10 years for the entire algae fuel industry to find a way to produce biodiesel at large scale and economically.

McMillan said that the price of carbon emissions is the unknown in the race to commercialize algae biodiesel and cellulosic ethanol, made from wood chips, grasses, or agricultural wastes rather than corn.

"When you get to economics, you have to ask how are we valuing carbon," he said.

There is no federal restraint on carbon pollution in the U.S. now, although carbon emissions trading markets now operate in Europe and, starting this fall, states in the U.S. northeast. Federal climate legislation is expected to take shape during the next president's administration.

But even without a clear price signal on carbon, McMillan said that there are a number of cellulosic ethanol plants now in operation in the U.S., representing about 20 million gallons of ethanol a year, or the equivalent of one corn ethanol plant.

The cost associated with these demonstration plants should give producers and investors a better grip on the economics, he said.