Algae Biofuels - Recent Innovations, Impact, Consequences, and Prospects - Case Study Example

Algae Biofuels: recent innovations, impact, consequences and prospects Executive summary With an increasing public awareness about global warming, government regulations, scarcity of natural resources, and shift of consumers’ preferences towards green and sustainable businesses, the popularity of biofuels as alternative source of energy is continuously growing. One of the recent innovations in biofuels industry is oil derived from algae. This paper provides an overview of recent development in algae biofuel sector, and discusses major implications, challenges, consequences and prospects for future developments. The research shows that despite positive environmental impact of algae biofuel use as a substitute of fossil fuel, limited number of companies can switch to this alternative source of energy because of high costs of this resource. However, government policies and initiatives of international organisations and institution could encourage and facilitate introduction of this type of biofuel as alternative source of energy in business environment. Introduction Nowadays, in the era of globalisation and growing demand for energy, chemicals, and fuel, increasing number of businesses face with a necessity of switching to sustainable practices and utilising renewable sources of energy. Bioresources compile an important part of the renewable resources available on the planet (Gupta and Tuohy, 2013). That is why sustainable use of biofeedstocks in biofuels and material production has become an important strategic issue in agendas of both scientific institutions and commercial organisations. Biofuel is viewed as substitute for petroleum-derived transportation fuels, which is increasingly utilised across the globe. The term biofuel can have various interpretations. However, the most common term defines it as any liquid fuels made from wastes, residues, or plant materials, which can be used as an alternative source of energy (Gupta and Tuohy, 2013). This alternative source of energy enables to contribute to security of supply, and address the problem of resource limitations and concerns related to global warming (Gupta and Tuohy, 2013). Biofuel production depends on the technology applied for its processing. Therefore, continuous innovation in the biofuels industry is an important issue for many scientific and research institutions. There are identified three generations of biofuels development. The first-generation biofuels refer to bioethanol or biodiesel derived from various biological resources, such as corn, sugar, vegetable oil, animal fats. The second-generation biofuels is biodiesel derived from non-food crops and non-foot biomass (Pogaku and Sarbatly, 2013). The feedstock for third-generation biofuels is mainly derived from microbes and algae (Pogaku and Sarbatly, 2013). The aim of this paper is to provide a brief overview of recent innovations in the sphere of biofuel technologies with a focus made on algal biofuels, and to analyse the major impacts it has on business, society, and the global economy. Recent developments and advances: biofuels derived from algae As it has been already explained, there are many different sources of feedstock for biofuels. However, among a broad variety of various alternatives, scientists and researchers demonstrate significant interest to biofuels derived from algae. This type of biofuels is viewed as possible substitute to petroleum-based fuels (Stolte, 2012). Algal biofuels is not only a great alternative to petroleum-based fuels, but also it good alternative for other types of biofuels made from land plants. Algae’s ability to grow faster than any other plants on the planet and to grow practically everywhere, including non-cropland in cultivation ponds of saltwater, wastewater and freshwater makes it more attractive among biofuels derived from land plants (Stolte, 2012; NASA, 2012). In favourable environmental and water conditions, algae can double their numbers every day, and they can be harvested within 3-5 days (NASA, 2012). Algae makes oil, which is extracted and processed into sustainable and environmentally friendly biofuel. Also, after the oil is removed, there are remains of the algae, which can be used for producing other products, such as natural gas, fertilizer, or animal feed (NASA, 2012). The process of deriving biofuel from algae is quite standard, whereas the selected strains of algae are grown in closed photobioreactors or open ponds. Algae is supplied with substantial amount of water and nutrients (Stolte, 2012; Hannon et al., 2010). Algae produces oil, which is extracted and processed into fuel. Also, there can be collected fuel precursors secreted by algae, which is first processed to the oil and then transformed into fuel (Stolte, 2012). While there are some obvious benefits of this source of alternative energy, there are also some challenges associated with algal biofuel development. Production of biofuel requires significant amount of water, energy and nutrients, and land area, which undermines the concept of sustainability in production process (Hannon et al., 2010; Stolte, 2012). Some other concerns are associated with uncertainties related to greenhouse gas emissions over the production life cycle (Stolte, 2012, n.p.). Continuous innovation and search for more commercially viable and environmentally sustainable practices has enabled researchers to develop more effective and sustainable ways of extracting biofuel from algae. Thus, for example, recently NASA presented modified ways of growing algae, cleaning wastewater, and capturing carbon dioxide. Moreover, the proposed method enables to produce feedstock without requiring large amount of water, land, or fertilisers (NASA, 2012).This innovative algae cultivation system is called Offshore Membrane Enclosure for Growing Algae (OMEGA). This system was designed “to grow freshwater algae in municipal wastewater using NASAs photobioreactors, which are flexible plastic tubes that float in seawater” (NASA, 2012: n.p.). The process of growing is designed in such a way that the algae is cultivated in wastewater, and therefore, it consumes carbon dioxide and retrieves the nutrients from the wastewater (NASA, 2012). Impact on the quality of life and the environment, society, individual Algae as an alternative source of energy is environmentally friendly and sustainable biofuel. Its use instead of fossil fuels contributes to solving two major dilemmas: global warming and limited amount of fossil fuel resources. Algae has unique features, which allows it to grow in extremely short terms and in large amounts. Due to these characteristics, algae may produce up to 15, 000 gallons of oil per one hectare a year (Oilgae.com, 2015). This oil can be converted into fuel and thus, serve as substitute to fossil fuel resources. Algae biofuel is highly biodegradable, contains no sulphur, and is not toxic, compared to other fuels (Oilgae.com, 2015). Microalgae, as a category of algae biofuel, has even more positive impact on the environment as it is capable to fix CO2in the atmosphere, and contribute to reduction of increasing CO2 levels in the atmosphere (Oilgae.com, 2015). Besides positive environmental impact, algae biofuel has positive impact on the quality of life and the society in general as it has several different areas for utilisation. As it has been already mentioned, algae can be used to produce biodiesel, biobutanol, and bioethanol and can produce superior amounts of vegetable oil (Oilgae.com, 2015). Biomass, produced by algae can be burned in order to produce electricity and heat. Also, algae can be grown in order to produce hydrogen (Oilgae.com, 2015). Effect on individual businesses and the overall business environment Increasing public concerns associated with global warming as well as government regulations aiming to reduce environment pollution are two major factors that drive businesses to adopt the principles of sustainable development. That is why many organisations seek for effective ways to make their business operations more environmentally friendly but still commercially viable. The system of using algae as a biofuel can definitely be transferred to the commercial sector as it offers sustainable and effective method for producing alternative biofuel from algae. Algae-based biofuels can be used by businesses in different industries, especially in those with high fossil fuel consumption. New strains of algae, logistics innovations such as refineries of petroleum industry, innovative partnership building, innovative production method of closed loop algae growing, innovative uses of new market mechanisms such as carbon credits are some of the ways of how algae biofuel resource is used in business environment (Nair and Paulose, 2013). However, recent researches show that it is quite expensive substitution of petroleum. According to Hannon et al. (2010), estimated costs of algae-based fuel varies from $300-2600 per barrel, while the price for traditional petroleum is approximately $60-70 per barrel. However, Hannon et al. (2010) specify that in some regions the price for algae biofuel can be as low as $84 per barrel. Nair and Paulose (2013) proposed a green business model based on the algae biofuel for aviation industry. In aviation and airline industry international agreements such as agreements related to emissions play an important strategic role. It is obvious that the costs of using algae biofuel are higher than the costs of using fossil fuels. However, taking into consideration increasing demand for fuel, growing population, benefits of green marketing and sustainable business are more likely to balance these costs in medium/long-term perspective (Nair and Paulose, 2013). The researchers suggest that more active position should be taken by governments and other international policy makers (such as the United Nations), who would encourage and support in greater extend the emergence of renewable energy initiatives and formation of new business models (Nair and Paulose, 2013). Governments may offset costs through airport taxes, direct government subsidies on the bio-fuel price, carbon credits, or environment taxes. Thus, the role of the government is huge in encouraging and distorting algae-based bio fuel business. Algae as a biofuel also is applied by small and medium enterprises. The oil extracted from algae can be used not only as sustainable fuel but also as sustainable food (Biello, 2013). Marketers have called it “algalin” and offered to bakery industry as a replacement of butter and bread. While this might not directly relate to biofuel, this aspect illustrates how biofuel-makers can survive until algal biofuels industry will develop in greater scope (Biello, 2013). Conclusion With an increasing public awareness about global warming, government regulations, scarcity of natural resources, and shift of consumers’ preferences towards green and sustainable businesses, the popularity of biofuels as alternative source of energy is continuously growing. One of the recent innovations in biofuels industry is oil derived from algae. Algae biofuel is highly biodegradable, contains no sulphur, and is not toxic, compared to other fuels and that is why it is more environmentally friendly energy resource. This unique resource enables the business to use alternative source of energy, substituting thus fossil fuels, and gain competitive advantage due to unique marketing position. However, the costs for this sustainable resource is higher than traditional petroleum and many businesses may not utilise this opportunity. The government and international organisations may create more favourable legal environment, encouraging businesses to invest to algae biofuel. Proactive government position will contribute positively to the sustainable business environment and thus, will improve the overall quality of life. References: Biello, D. (2013). How to Survive as a Biofuel-Maker: Sell Algae to Bakers [Slide Show]. [online] Scientificamerican.com. Available at: http://www.scientificamerican.com/article/how-to-survive-as-former-algae-biofuel-maker-solazyme/ [Accessed 14 May 2015]. Gupta, V.K., and Tuohy, M.G. (2013), Biofuel Technologies: Recent Developments, Springer Berlin Heidelberg, Berlin, Heidelberg. Hannon, M., Gimpel, J., Tran, M., Rasala, B. and Mayfield, S. (2010), “Biofuels from algae: challenges and potential”, Biofuels, 1(5), pp. 763-784. Nair, S. and Paulose, H. (2014), “Emergence of green business models: The case of algae biofuel for aviation”, Energy Policy, 65, pp. 175-184. NASA, (2012). NASA Showcases Innovative Method To Grow Algae-Based Biofuels. [online] Available at: https://www.nasa.gov/centers/ames/news/features/2012/omega_algae_feature.html#.VVRjLJM-61k [Accessed 14 May 2015]. Oilgae.com, (2015). Introduction to Algae & Basics, Types of Algae, Forms of Algal Strains - Oilgae - Oil from Algae. [online] Available at: http://www.oilgae.com/algae/algae.html [Accessed 14 May 2015]. 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