Kate Mackenzie The long road ahead for algae-biodiesel venture

Remember BP’s announcement of a small investment in Martek, a company trying to make biofuels from sugar with algae?

That $10m investment by BP was only a tiny fraction of the shrinking pot of money it has allocated to renewables, but it’s pretty small beer for Martek too, according to the Washington Post:

Martek’s annual revenue was $352 million last year, nearly 90 percent of which came from sales to baby formula manufacturers. Using algae, Martek makes DHA, an omega 3 fatty acid that has been proven to be important for brain and eye development in babies. As the only company that makes what is regarded as a “clean” DHA product — other manufacturers offer DHA in the form of fish oil derived from tuna and salmon — Martek’s product has cornered the U.S. market.

The story quotes two analysts, one of whom describes the investment as a “small bet” on a “long shot idea”. The other points out that genetic engineering of the sort needed to make a marketable biodiesel product, takes “a long, long time”.

The more interesting points come from Martek itself:

In theory, Martek President David Abramson said this week, turning algae into the type of fuel BP could use isn’t a remarkable accomplishment. The larger, more important trick would be to develop a product for a price that matches or beats the cost of fuels used by vehicles today.

“This is very doable in a lab, if you don’t care about the price,” he said.

Related links:

Affordability Martek’s problem as it looks to turn fuel into algae (Washington Post, 20/08/09)
Back to petroleum (FT 07/07/09)
BP’s jatropha venture: In case you were wondering (FT Energy Source, 17/07/09)