21 January 2022 |

Keep Cool Report #0005: Algae

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Report North Star

Illuminate the powerful role that algae and algae-powered technologies will play in mitigating (and ideally) reversing climate change 🌊 🌾 ♻️.

What is Algae? 

Algae is an informal term for a large and diverse group of organisms that perform photosynthesis, differing from other plants and trees in that they are non-flowering and typically aquatic. Algae have a rich history of human consumption and cultivation. The first known seaweed farm cropped up in Tokyo Bay in 1670. Today, algae are cultivated for a wide range of applications, spanning human and animal nutrition to pigments and use in many other products, even in your summer ice cream cone 🍦☀️!

Why it Matters (to climate technology)

As Paul Gambill, CEO of Nori, a carbon removal marketplace, shared with us in our latest deep dive report: “even if you could magically turn off all carbon emissions tomorrow … there’s still too much carbon in the air.”

The International Panel on Climate Change reached similar conclusions, suggesting that in addition to zero-emissions systems, carbon removal is needed to mitigate global warming.

In short? We need to remove greenhouse gasses (“GHGs”) from the atmosphere, not just reduce current emissions. Algae could play a critical role in both reducing and removing GHGs. 

Algae are garnering significant attention in climate technology because they are voracious consumers of carbon dioxide (to conduct their photosynthesis). Algae can consume more GHGs than trees because they cover more surface area, grow 10-30x faster than terrestrial plants, and can be integrated in advanced technologies, like bioreactors. Algae are also exciting because they are easy to grow and can be cultivated on non-competitive land. Said differently, algae production doesn’t have to displace other common land uses. This is critical because many other carbon capture and removal techniques are competitive and, at scale, would require significant changes to how and where things like farming happen 👩‍🌾🌽.

One potential carbon removal use case? Algae production sites could be collocated with power plants that burn coal or natural gas. The algae production would use CO2 directly from the plant, reducing costs and adding value for both the algae cultivator and the power plant. 

Of course, carbon removal isn’t where the buck stops for algae. Algae can be cultivated to produce a range of foods and materials that can replace otherwise GHG-intensive materials and products, such as fertilizers, feedstock and petroleum based plastics. Algae also show promise as a biofuel and in a number of other novel applications that we will explore in this report.

Every challenge, an opportunity

Here are the climate challenge areas in which blockchain can have outsized impact. (to go deeper on these climate tech challenge areas, checkout our content overview) 

1. GHG Capture and Storage 

Opportunity: Algae sequester carbon dioxide by performing photosynthesis in the same ways that trees and other plants do. Carbon capture and removal solutions involving algae range from colocation with power plants to algae-integrated feedstock for cows, which can reduce methane emissions .

2. Food, Agriculture and Land Use

Opportunity: Algae are exciting in part because they can be cultivated on land that’s not attractive for farming. As global food demand skyrockets, solutions that are non-competitive with food production will become more and more critical. Further, algae grow faster than terrestrial plants; less than a tenth of the land is needed to produce an equivalent amount of biomass vs. terrestrial farming. As such, algae cultivated for food, feedstock, and the production of other materials can reduce land and water usage, mitigating otherwise GHG-intensive material production and cultivation. Algae also show promise in a number of wastewater treatment techniques. 

“If I had one silver bullet for the sustainable and delicious future of food, it would be green and loaded with algae…” – Mariliis Holm, Co-founder and Partner, Sustainable Food Ventures

3. Energy

Opportunity: Algae-based products can be used to create biofuels in lieu of coal and natural gas based fuels. Algae-based fuels have been tested in and successfully powered vehicles ranging from a Ford F450 to military aircraft ✈️.

4. Built Environment

Opportunity: Integrating algae-powered technology, e.g. bioreactors, directly into urban landscapes and architecture is becoming a viable way to promote energy efficiency and to valorize urban spaces with algae production.

The Players

Carbon Capture, Mitigation and Energy

  • Energaia manufactures bioreactors for the production of algae ⚡️🌱
  • Global Algae is building a 160-acre algae farm for use in biofuels and material production ⚡️🔁
  • GreenWave is a non-profit organization pioneering and popularizing vertical algae farming techniques that produce seaweed, sequester carbon & rebuild ecosystems 📢
  • Helios-NRG: is developing algae technology to capture CO2 from carbon-based power plants and to convert it to valuable products 
  • Hypergiant makes an AI-powered algae bioreactor that pairs with HVACs or other large appliances for businesses or even individual households to remove carbon 🏘
  • RunningTide develops technologies with shellfish and kelp that remove carbon and rebuild ecosystems 
  • Symbrosia reduces methane emissions from cows by adding seaweed to their diets 
  • VoltaGreenTech reduces methane emissions from cows with seaweed 🐮


Food & Supplements

  • Akua produces a bevy of algae-based foods, including kelp burgers, pasta and more 🍔
  • Allmicroalgae develops algae-based snack foods and dietary supplements 🍪
  • Canadian Kelp harvests and sells hand-picked kelp and creates jobs for First Nations communities in Canada 🇨🇦
  • Hooked makes a tuna alternative from algae and other plant-based ingredients 🐟🐟
  • iWi Life produces nutritional supplements from their own algae farms 
  • Kuleana makes an algae-based tuna alternative targeted at sushi and poke lovers 
  • MiAlgae produces omega-3s from algae instead of fish ❌🐟
  • Microsynbiotix is formulating oral, edible vaccines from microalgae 
  • NewWave produces a shrimp alternative made from seaweed and other plant ingredients 
  • Naka produces and develops microalgae-based foods and meat alternatives ❌🐓
  • Nonfood makes microalgae-based foods and nutritional powders 
  • Spira creates sustainable, safer food dyes and pigments 
  • Thrive Algae produces a culinary algae oil that can stand-in for other vegetable oils that are more taxing on the environment 
  • Vaxa Impact Nutrition produces microalgae as feedstock for fish farming while capturing carbon in the process 


Materials and Consumer Goods

  • AlgiKnit creates fibers for use in the fashion industry from seaweed 👗
  • Algopack produces renewable plastics from seaweed 
  • The Algae Lab by Studio Klarenbeek & Drosis is developing technology that uses algae to 3D print plastics 
  • Bloom Materials works with clothing companies like Merrill, Adidas, and H&M to turn algae into materials for fashion and reverse water pollution in the process 
  • The Shellworks makes compostable materials from seafood waste 🍣🗑

Where It’s Headed 

The most immediate upside in the algae market will come from demand for food and consumer products. Aquaculture, i.e. the cultivation of organisms in water, will play an increasingly important role in meeting future global food demand. Why? Well, for one, there’s a lot more room for it than there is for farming. Secondly, as we’ve noted, global demand for food is set to skyrocket as the global population does. Specific to algae, a 2018 report projects the global algae market will expand from $4.0 billion (2018) to $5.2 billion by 2023. Still, that’s a relatively diminutive market, with significant room for growth. In comparison, the global soybean market was ~$150 billion in 2017. In the process of growing the market, producing food with algae will help mitigate climate change too. Currently, GHG emissions from global fishing (trawling specifically) match those from aviation 🐟 ✈. Replacing some of this fish consumption with algae-based alternatives is one positive step towards a more sustainable future .

As the algae market grows, carbon capture technologies will mature. In conversations with carbon removal marketplaces like Nori, we’ve learned that verifying and accounting for carbon removal methodologies like algae cultivation are on the roadmap, but will take more time before they’re fully feasible and operational 🔜. As far as a tentative sequence of development is concerned, we see retail demand for algae products providing the necessary tailwinds for carbon removal, capture and storage technologies to mature. 

Longer-term capital will enable more ambitious solutions. As with most (if not all) climate technologies, venture funding alone, with its 5-10 year time horizons, won’t be enough to unlock the potential inherent to algae-based technologies. Government funding, while only a trickle right now, should help spur greater innovation in the space, which will be predicated on long-term research and projects that aren’t hamstrung by shorter term growth goals. Just last month, the Department of Energy announced $8M in funding for a handful of different algae-based technologies and products, with the express purpose of capturing and storing GHGs. What else might help? Novel concepts like quadratic funding, aimed specifically at public goods, could be cool ways to raise longer-term funding, too💡 . 

Clearing regulatory hurdles will accelerate adoption ⏩. In a 2018 U.S. Farm Bill, algae cleared a massive regulatory hurdle, namely an upgrade in status to one of the highest priority crops for new deployment, research, and development. Regulatory catalysts like this one can spark a virtuous cycle where enhanced regulatory status and attention, capital flows, and attention drive greater innovation which in turn, provides unit economic improvements and returns for investors, which in turn drives more attention and attracts even more capital . While it’s early, we see the potential for a perfect storm to brew in the algae universe, even after past setbacks (see Obstacles section).

The West will play catch up in the next wave of the algae economy 🌊. Currently, China produces approximately 60% of the world’s seaweed. There’s also more history and cultural precedent surrounding algae-based foods and products in Asia. However, as the use of algae in food production reaches a broader market, we see the Western hemisphere catching up in terms of consumption first and eventually, in production too. Will the gap close entirely? That’s doubtful. But, with a market that’s less saturated, competitors in the West who operate in the space may be attractive for investors, considering there’s more room for them to grow. 

Algae-fying future cities 🏙. Combined with technology like bioreactors and AI, algae can be massively (up to 400x!) more efficient than trees at removing GHGs from the atmosphere. Advances like these, as well as the many experiments that are already live (read up on these in the next section) have a non-negligible role to play in making future cities more livable, self-sustaining, and perhaps even carbon negative.

Opportunities for Action 

Start by supporting all the wonderful algae-based products outlined in the Players section of this report. Your demand for food and consumer goods can power their businesses and reduce GHG emissions in the process. You’ll find food and fashion that you love, too ❤.

Create your own renewable plastics with algae. Chile-based designer Margarita Talep developed her own eco-friendly packaging from algae and laid out the steps for us to follow to reduce our carbon footprint 👣. 

Dive deeper and learn about the future of carbon removal with algae-technology. We were  especially interested in the potential of algae-production facilities that are collocated with other types of power plants. While they may not be popping up left and right yet, there are elegant multi-solve, solutions on the horizon to get excited about . The water purification benefits of working with algae are also well worth exploring further; here’s one strong resource.

Support and advocate for longer-term research on algae technology applications, especially if you’re a scientist, educator, administrator or capital allocator in the space. Things like cost-competitive algae biofuels will require long-term research, development, and demonstration according to The Energy Biosciences Institute in Berkeley. Let’s get started now 🏃‍♀️! 

Explore the world of algae-integrations in architecture. From 100% energy independent buildings powered by algae to urban algae farms that produce value-added algae production, there’s a whole world of unique, ambitious projects popping up in cities near you. Going to Thailand? You could stay at The Novotel Hotel in Bangkok, which operates an urban algae farm on its roof in partnership with algae startup EnerGaia. Maybe your city will have algae canopies, or your home will have an algae curtain. We can’t wait to visit 😎. 

Ready to go bigger? You could start your own algae farm with the help of organizations like GreenWave. It may be more attainable than you think . Anyone with some space, a boat and $20k can become a sustainable algae farmer and help the fight against climate change while building a business 💸. 

Oh and in case you haven’t…  🙃  Access climate tech trends and business ideas with 5-minute reports.Subscribe for free

Obstacles

Algae has already been through a hype cycle. There have been a number of “waves” of hype surrounding algae technology in this century already. One ended unceremoniously when fossil fuel giants moved on from algae research in favor of other biofuel alternatives that were more attractive (read as cost efficient) at the time. Algae have a high hurdle to overcome if they are to re-attract investment from players that have been through a cycle already 📉.

Verification of carbon removal methodologies and proper accounting will take time. As we’ve noted throughout this and other articles, such as our deep dive on Nori, establishing any new carbon removal methodology and understanding how much carbon it can remove from the atmosphere is a big undertaking. Further, for any methodology to really count towards reversing climate change, it needs to turn GHGs into products that keep it sequestered long-term, rather than released back into the atmosphere. Foods and fuels can be imperfect as far as long term sequestration is concerned. While good as replacements and mitigations, if the algae market is concentrated on turning CO2 into food, it might not be a winning permanent drawdown solution. If algae aren’t harvested properly or it is left to rot, the CO2 isn’t actually captured ❌.  

Scaling algae for biofuels and carbon removal is a massive frontier. While new technologies will make working with algae and managing its growth easier, the market has a long way to go in terms of scaling both production and technology. Algae operations really only exist at the scale of R&D or proof-of-concept projects, or for small, niche-market companies growing algae for their products. Similarly, we’re a ways away as far as cost-effective technologies that convert CO2 directly into algae growth are concerned. More research and development are needed, and venture financing won’t be enough to get there quickly. Finally, in terms of collated carbon removal facilities, proof of concept and case studies need to be coordinated with power plants. While theoretically beneficial to both parties, some major players in the fossil fuel space have already sunset algae-based projects in the past, and algae CO2 utilization needs to scale to maximize benefits for the emitter and make such projects more attractive. Currently, power plants emit more CO2 than algae cultivation systems can absord. 

Location, transportation, and perception. While one benefit of algae compared to other solutions is that it doesn’t compete for arable land, sourcing the right inputs for larger scale production cost-effectively is still a challenge. Algae farms require the right topography, climate, nutrients and infrastructure, in addition to a CO2 source. If CO2 needs to be transported to algae farms, that raises additional transportation and logistics challenges, as well as the need for technology advances in carbon-dense storage. Finally, if the CO2 source comes from a power plant, it may contain nitrogen oxides, sulfur oxides, and heavy metals. These could prove challenging for companies who sell the end product as food. Even if products are safe, the optics and perception of toxicity alone can complicate matters drastically. 

Algae aren’t always our friends 😔… particularly when they present as an algal bloom, which are overgrowths of algae that can be harmful to ecosystems, local economics, and can accelerate methane leaks from bodies of water like lakes. Algal blooms are sparked by or exacerbated by human pollution, particularly nutrient and nitrogen pollution from farming, storm and wastewater, and fossil fuels. The same drivers that cause algal blooms, coupled with warming water in lakes across the globe, could increase methane emissions by 30% or more over the next hundred years. While this challenge isn’t exactly all algae’s fault, there’s important work to be done to prevent harmful algal blooms in parallel to advancing algae tech ☝.    

Health is wealth. In order for algae to become a popular source of nutrition for the globe, more research is needed on whether nutrients in algae are released from the food in our intestines and absorbed by our bodies as readily as from other food sources, say, leafy greens like spinach 🧬. 

Natural disasters pose unique risks to algae production. Natural disasters, especially hurricanes, which will become more frequent and acute as global warming worsens, threaten algae production operations. One algae farmer who has been in business since 2011 has experienced nearly total loss of harvests twice in the last decade already. 

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