Market Opportunity

The current Obama administration has increased government funding and mandates in support of renewable energy with many billions of dollars of new R&D funds. This government aid in the form of grants, subsidies and tax credits has created a tremendous opportunity to accelerate the development of algae-to-energy technology and grow the production of algae-derived oils from a infant industry to an actual one, with potential growth on a massive scale.

Huge markets for algae products exist in liquid transportation fuels, animal feeds, bio-plastics, renewable chemicals, and food-grade oils. According to the US Department of Energy, the long-term commercial potential of algal fuel and other high-value co-products is as high as $3 trillion, if and as algae replace fossil oils and oilseed crops as a platform for fuels, feed, fertilizers, chemicals and nutraceutical products.

Worldwide, Pike Research anticipates that production will grow at a robust compound annual growth rate (CAGR) of 72% (roughly on par with early development in the biodiesel industry). With 50% of all algae activity, the United States is poised to ramp up production the earliest among world markets.

Algae-Based Biofuels Production by Region, World Markets: 2010-2020 (Source: Pike Research)

Algae-Based Biofuels Production by Region, World Markets: 2010-2020 (Source: Pike Research)

Unfortunately, two major bottlenecks remain to be overcome for algae farming industry to take off that are significant improvements in developing high-energy algal species and creating sustainable biomass production.

Indeed, producing algae-based bio-fuels is essentially an agricultural challenge. Production consists of three key technological hurdles (cultivation, harvesting, oil extraction), the costs of which must decrease significantly before widespread scale-up can take place.  We believe that AlgaStar technology has the potential to surmount these hurdles by developing a breakthrough bio-reactor technology that will allow cost effective high yield algal farming to become a commercial reality.

Next: Strategy

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