http://www.businessweek.com/magazine/content/07_49/b4061075.htmIn a world spooked by global warming and thirsty for nonpolluting fuel, lowly algae hold a potent appeal. The plants sop up large quantities of carbon dioxide, a greenhouse gas, and produce tiny globules of fat that can be collected and turned into biodiesel fuel for trucks, cars, and trains. The oils might even be processed into aircraft fuel.
One of algae's great virtues is that the plant has so little in common with other sources of fuel. Unlike cornfields that are harvested to produce ethanol, algae farms don't require huge volumes of freshwater, nor do they tie up land that could be used for food crops. Algae flourish in saltwater or even wastewater and grow up to 40 times faster than other plants. Compared with current energy crops, algae have "the potential to deliver 10 or 100 times more energy per acre," says Ron C. Pate, a technical expert at Sandia National Labs. That's why industrial giants ranging from Chevron (CVX ) to Honeywell (HON ) to Boeing (BA ) are starting up algae business units. "In the past two years, we have changed from algae skeptics to proponents," says Dave Daggett, Boeing's technology leader for energy and emissions.
Bringing down the cost of producing algae oil in commercial volumes—billions of gallons—is still a big challenge. "The scale required to grow algae to a meaningful dimension is staggering," says Bill Green, managing partner at VantagePoint Venture Partners. But biodiesel from other plants is already a robust market. In Europe, refiners are producing 1.4 billion gallons a year from rapeseed, soy, and other plants. In all, the world consumed $1.7 billion worth of biodiesel last year. That should grow to $26 billion by 2020, says market researcher Global Insight.