The state of Pernambuco in Brazil’s northeast is going to become home to the country’s first algal biomass plant, thanks to an agreement between See Algae Technology (SAT), an Austrian developer of equipment for the commercial production of algae, and JB, one of Brazil’s leading ethanol producers. The plant will produce algal biomass from natural and genetically modified strains of algae.

So far, the cost of producing algae has been the biggest obstacle to bringing algae-based fuel to the market, but SAT has introduced a technology that has brought the price down to about that of ethanol - R$0.80 to $1.00 (US$0.40 - $0.50) per liter (around one quarter of a gallon). This is possible because production has been transferred from open air ponds to reactors of up to five meters (16.4 ft) in height, protecting algae from environmental interference.

It is in how light is distributed to facilitate algal reproduction that SAT’s main innovation lies. On ponds, only algae floating on the surface of the water are exposed to sunlight. The lower layers have to compete for light and nutrients, which results in a reduction of productivity. The company developed a solar prism that transfers light to reactors through optical fibers. This way, the reactors are illuminated from the inside, top down. At the Brazilian plant, tubes will connect them to the chimneys of the sugarcane mill next door where JB burns sugarcane bagasse (crushed, dry stalks of sugarcane), using the carbon dioxide generated by that process to feed the algae.

The new plant will make the most of algae's potential. One of the products to come out of it will be feedstock for animals, providing an alternative to soybeans. The process also yields algal lipids that can be used to make biodiesel and biochemicals. Algae are also a source of omega-3. As overfishing has become a serious environmental concern, algae are a more environmentally-friendly source of this nutrient, which is commonly sold as a supplement.

"We believe that this marks a significant step forward in the evolution of our company and validates both our exclusive technology and the commercial viability of algae, especially for use in feed and biofuels,” said Dr. Joachim Grill, SAT’s CEO.

The plant will occupy one hectare (2.5 acres) and the total investment is €8 million (US$9.81 million). SAT expects the unit to be producing 1.2 million liters (317,000 gallons) of biodiesel per year when it starts operating in late 2013.

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