Michael Kanellos: December 2, 2009, 12:30 PM

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Algae in China: For CO2 Capture and Food

Seambiotic, one of the oldest companies in algae, has signed a deal with China Guodian Corp. to build algae farms near power plants in that country.

The first farm, opening in 2010 in Penglai, will cover 12 hectares and cost about $10 million. Seambiotic specializes in open "racetrack" ponds. In these ponds, flue gas from a power plant is circulated into water where multiple strains of algae grow. Add sunlight and time and careful cultivation techniques and in a few weeks you have mounds of slime. Guodian has 100 power plants to the deal could grow. Since 2003, Israel-based Seambiotic has been in the prototyping and pilot stage: this marks a transition toward larger commercial production.

Instead of producing algae for cars, Seambiotic grows it for the nutraceutical and pet food markets: oil for nutraceuticals and protein for pets. (Algae is only about 30 percent oil in its natural state – the remainder is protein and other cell materials.) Nutraceutical oil sells for far more than diesel. Kyle McCue of Ternion Bio Industries told us recently that his company has signed deals with pharmaceutical companies to deliver algae at close to $10,000 a ton. Going straight to food also lets producers skirt some technical issues, like how to turn the lipid oil into hydrocarbons and how to keep single strains pure.

Besides, food is as big a problem for China as oil. Rising temperatures and temperature fluctuations could cause swings of 30 to 50 percent in harvests.

Solazyme, the South San Francisco startup that ferments algae into a variety of oils, has started selling algae oil to the food market this year (see Arnold Schwarzenegger and his unearthly orange skin tone at the company headquarters earlier this year here). It has an algae milk and the brownies weren't bad.