Biofuel from microalgae: Campbell et al., 2011

I feel that the future algal biofuels should not be included in the evaluation of the effects of biofuels just yet, as they have not been utilized on a large scale yet. However, I would like to briefly discuss their potential, as they are likely to become significant when they start being used, which may happen in the relatively near future. Campbell et al. (2011) have compared the GHG emissions effect and the cost of a first generation biofuel (canola) and an ultra-low sulphur diesel (ULS) with that of a biofuel produced from microalgae in Australia. The GHG emissions effect from algae was highly favourable compared to the other fuels, but the cost was modelled to be higher, suggesting that their production may be uneconomical. It is the economic cost of algal biofuel production that is therefore the decisive factor in whether such biofuels are likely to be implemented, as biofuels are profit-driven; but the economic benefit is also highly uncertain.

For example, major uncertainties lie within government policy; in Australia, there are plans to introduce the excise tax, the existence of which could be decisive in determining the cost of algal biofuel production and whether the production will materialise. Additionally, the assumptions used to determine the economic viability of algal biofuels are important. For example, carbon dioxide is needed for algal cultivation and it was found that this cultivation will only be economical compared to the other two fuel types if the carbon dioxide source is local and does not need to be transported to where the production site is. This finding limits the potential for algal biofuel production. However, it is also based on the arguably unjust assumptions about the costs of fossil fuels, which make the cost of algal biofuels appear higher and thus uneconomical. These assumptions are that the high initial set-up costs of fossil fuel plants can now be dismissed and that the major government subsidies given for oil exploration in most countries can be excluded from the calculations of the cost of fossil fuels. Additionally, the ‘hidden cost’ of treating health problems associated with the products of fossil fuel combustion are excluded from the calculations too. Although these costs are hidden or have been in existence for so long that they are taken for granted, I do not see the logic of why they should be excluded for fossil fuels and not for biofuels. In addition to the hidden costs of fossil fuels, the inclusion of which will make algal biofuels appear more economical, the inclusion of the hidden benefits of these biofuels may further increase the appeal of the fuels. These hidden benefits include co-products, such as potable water and fertilizer which can be obtained by growing the algae in nutrient-rich industrial water. This also allows the safe and environmentally-beneficial disposal of waste-water as an extra benefit, as it saves on the costs of treating the water and prevents the potential problems such as eutrophication, which may occur if the water is left untreated. However, these potential benefits of co-products have not been explored sufficiently yet to be able to say whether their derivation will be realistic.

The future cost of algal biofuels is also uncertain due to factors not directly related to biofuels; for example, if the global carbon dioxide emissions reduce, it may be more difficult to meet the demand for it for algae cultivation without increasing the costs through needing to transport the gas. Additionally, Campbell et al. (2011) noted how there is a trend towards the electrification of transport vehicles, which are expected to be the main consumer of algal biofuel, meaning that liquid biofuels may be less useful in the future. The authors therefore see the algal biofuel merely as a transition fuel from liquid fuels to electric power, making it useful for just a few decades if this proves to be the case. This would limit the economic profit that can be derived from the biofuel, thus making the costs more significant and the production of the biofuel less appealing to investors.

There also are spatial and temporal variations, which further increase the uncertainty of algal biofuel benefits and viability. This is because the model in the Campbell et al. (2011) study is based on the case of Australia, with its hot and dry climate, its low potential for freshwater being available for their cultivation, its specific government policies and its low coastal biodiversity. This means that the potential for algae cultivation and its environmental impacts in other countries may be different.

Nonetheless, despite all these uncertainties, I would like to remind my readers of the reasons why biofuels are being considered in the first place: they may be one of the few less painful ways of meeting the vital GHG reduction targets and they are also one of the few ways of achieving greater energy security in the future. This means that as the prices of fossil fuels rise substantially due to depletion and in cases where terrestrial land area becomes limited to grow biofuels such as canola, governments will most likely find a way to make algal biofuels economical if necessary. This has happened in countries such as Brazil under the ‘Social Fuel Seal’, where the seemingly uneconomical activity of investing in smallholder biofuel production was made profitable through government subsidies. For these reasons I think that we should not concentrate on the cost of the different biofuels as much as some authors such as Campbell et al. (2011) do, but rather focus on the significance of the potential benefits they may bring in certain situations.