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.
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.