Select your localized edition:

Close ×

More Ways to Connect

Discover one of our 28 local entrepreneurial communities »

Be the first to know as we launch in new countries and markets around the globe.

Interested in bringing MIT Technology Review to your local market?

MIT Technology ReviewMIT Technology Review - logo


Unsupported browser: Your browser does not meet modern web standards. See how it scores »

{ action.text }

One of the attractive features of algae is that it can grow in wastewater, which could reduce water costs and leave fresh water for other uses, such as growing food. But the roadmap notes that, in practice, water-associated costs could be higher than expected. For example, wastewater could introduce pathogens that kill algae, requiring potentially expensive water treatment. In open ponds, water that evaporates has to be replenished with fresh water (otherwise contaminants will get more and more concentrated over time). In closed reactors, cooling systems could also increase the need for fresh water. The roadmap concludes, “If not addressed adequately, water can easily become a showstopper” for the technology.

For these and other reasons, many investors continue to be skeptical of algal biofuels. “Of the two or three dozen business plans we have evaluated, none seem to be economically viable for fuels in the next five years,” says Vinod Khosla, the entrepreneur who founded Khosla Ventures in part to promote alternative energy companies. “A comparison of biomass to algae suggests that costs are almost always going to be higher for algae.”

Yet, as the DOE roadmap notes, private investment in algae has been racing ahead of government investment lately. The Biotechnology Industry Association estimates that over $1 billion in private funds has been invested in algae R&D in recent years, including a deal for up to $600 million from ExxonMobil. This investment, and the DOE’s renewed interest, has in part been due to advances in biotechnology that could make it possible to greatly increase the productivity of algae and reduce the cost per gallon of biofuel.

One approach that’s emerging is to genetically engineer algae and other photosynthetic organisms to make and continuously secrete fuels such as ethanol and diesel rather than making oils that have to be harvested and further refined to make fuel, as is the case with conventional approaches to algae. Berry says newer approaches could be much more economical. “There are vast differences in productivity,” he says.

Flagship Ventures founded and is backing a company, Joule Biotechnologies, that is taking the genetic engineering approach. Other companies, such as Synthetic Genomics, a company founded by the biologist Craig Venter that is being supported by ExxonMobil, are also working on heavily engineering algae to increase yields. Khosla says that making algal biofuels viable will require a departure from conventional algae. “I personally think it will be hard for algae to be a competitive fuel source,” he says, “unless a radical approach, like Craig Venter’s, works.”

10 comments. Share your thoughts »

Credit: NREL, Warren Gratz

Tagged: Business, Energy, biofuel, DOE, diesel, algae, Synthetic Genomics, ExxonMobil, Joule Unlimited, Joule Biotechnologies

Reprints and Permissions | Send feedback to the editor

From the Archives


Introducing MIT Technology Review Insider.

Already a Magazine subscriber?

You're automatically an Insider. It's easy to activate or upgrade your account.

Activate Your Account

Become an Insider

It's the new way to subscribe. Get even more of the tech news, research, and discoveries you crave.

Sign Up

Learn More

Find out why MIT Technology Review Insider is for you and explore your options.

Show Me