Algae feedstocks for alternative fuels production are not economically competitive with fossil fuels at the present time. Furthermore, it has not yet been demonstrated that algae production systems offer improved sustainability characteristics.
Algae does have potential as a feedstock for biofuels. Depending on their composition, different algae species may be suitable for a range of biofuels. Additionally, algal biomass productivity per hectare could eventually be higher than for terrestrial energy crops. Last but not least, algae can be cultivated at sea or on non-arable land, so there is no competition with current food production.
These reasons justify attention to algal biofuels from researchers, industries and (governmental) policy makers. The research that forms the basis of this report leads to the conclusion that the following issues are important to consider in policymaking on algal biofuels:

Algal biofuels are in an early stage of development. Current expectations for the future are based on estimates and extrapolation of small-scale production and results of laboratory work. Progress needs to be demonstrated that higher productivity, commercial scale systems, exhibiting improved economics and sustainability attributes are achievable.

It is too early to select preferred algal fuel pathways and technologies. In practice there will not be one preferred production method for all situations. Different local circumstances, such as climatic conditions, the availability of fresh or salt water, and the proximity of suitable CO2 resources will likely have different optimum solutions.

Algae production will not be possible in quite a few regions of the world. High productivity rates will require good solar irradiance, a narrow and suitable temperature range, good water supply, adequate CO2 resources, and sufficient flat land. The locations where all of the appropriate resources are available need to be identified.

Sustainability criteria must be developed for algal biofuels. Besides the energy, environmental, and ecological issues that are addressed in this report, criteria should be defined on issues not addressed in this report such as economic prosperity and social well-being.

It has been shown that under specific conditions, the algal biofuel production and distribution chain may have a net energy output, but further energy analysis of many different algae fuel chains is needed.

Algal biofuel policies and projects should aim to reduce fossil energy consumption and the environmental burden compared to conventional fuels. In parallel, these efforts should result in acceptable impacts on ecosystems. Therefore, many government agencies that fund pilot projects are requiring a complete sustainability analysis prior to construction and operations. During the execution of the project, energy consumption and emissions should be measured to ensure that actual measurements are consistent with those in the sustainability analysis and to collect inputs for later LCA analyses.

Based on the high level of innovation demonstrated within the algal biofuels industry in just the past decade, it is likely that new, refined, or even breakthrough technologies will continue to be introduced in the future. In fact, the introduction of these innovations will be critical if the sector is ultimately going to achieve commercial success. It is important that industry stakeholders and policymakers remain open to new algal species, processes, and fuels besides the ones that are being considered today.

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