Algae can be used for everything from animal feed to cosmetics, displacing less environmentally friendly products. A team of researchers across science, business and economics are working on the way forward for this emerging industry
The path to a low-carbon future doesn’t have to be at the cost of economic growth if researchers and industry are able to find ways to scale up biotechnologies such as algae-based production.
At the University of Technology Sydney (UTS) a multi-disciplinary team across science and business has come together to work on some of the challenges involved in growing the bio-economy in Australia, in collaboration with government and industry.
Scientists from the Climate Change Cluster (C3) are investigating questions such as how to optimise algae growth and harvesting – for products ranging from animal feed to pharmaceuticals. Meanwhile, accountants and economists at UTS Business School are developing new business and economic models to better inform decisions by government and the private sector.
The aim is to come up with a roadmap for an industry that could replace carbon-intensive processes with more environmentally sustainable forms of production, without necessarily sacrificing jobs, growth or profits.
One international estimate suggests the algae products market could be worth $US44 billion globally by 2023.
Microalgae are small, photosynthetic organisms that convert sunlight into algal biomass. Importantly, as well as inputs such as sunlight and nitrogen, algae requires CO2 to grow. So a product produced using algae could potentially reduce CO2, rather than adding it to the atmosphere.
“What we are looking at are new raw materials to support ‘endless’ industries,” says the Executive Director of C3, Professor Peter Ralph, “and what we want to do is work with the entrepreneurs who will take those industries forward.”
A lot of industries at the moment depend on petrochemicals, which are a finite resource, Professor Ralph says. “We see opportunities for innovating and disrupting unsustainable industries by getting a wide range of new and exciting products out of algae.”
He describes algae as “little biofactories”. They can produce sugar to make ethanol and oils to make plastics. They can be altered to make pharmaceuticals for human treatments. They can be used for cosmetics, neutraceuticals (such as algae-based Omega-3 oil) and animal feed.
The challenge is working out how to achieve the sort of scale and efficiencies needed to make the industry, and individual products, viable.
So C3 is looking at opportunities to be found in the largely untapped algal diversity, seeking to optimise products and business models, and aiming to stimulate broad commercial interest, says its Industry Engagement Manager, Dr Brent Hamdorf.
“One of the problems we have is that people have focused on 10 common alga and tried to do everything with them,” Professor Ralph explains. “But there are over 70,000 different species. We are exploring that diversity – is there a better strain we should be using for protein production or to yield a different type of oil, for instance?”
Inside UTS Business School, researchers and students are working in parallel on business and economic models to more accurately evaluate the economic and environmental impact of algae biotech.
Dr Paul Brown of the Accounting Discipline Group, who is leading the Business School element of the project, explains that more sophisticated modelling is needed to more accurately capture the different outcomes depending on which sources of CO2 the algae dines on, as well as what happens in manufacturing processes and when the product is used.
In some cases the end result might be that CO2 in the atmosphere is reduced but there are also circumstances where the manufacturing process or the use of the end product could add to emissions.
“Those sorts of differences haven’t necessarily been well accounted for in the past,” he says.
Honours student Cheryl Chia has been working with her supervisors on a model that – described at the most basic level – comes up with a plus or a minus for each of sustainability and profitability.
One process might be profitable but not sustainable; another might be sustainable but not profitable. The aim of the modelling is to reveal those that are both sustainable and profitable so they can be targeted for support by government and investment by business.
Chia is part of a team of students involved in the project, and worked under the supervision of Dr Hannah Pham -- who has a background in chemical engineering, an MBA and recently completed a PhD in environmental accounting at UTS – along with Dr Brown, Dr Anna Wright and Dr Samir Ghannam.
Dr Wright says of the project: “It’s thinking about accounting in an innovative way”, where you not only assess the economic value that is being constructed but also the value of the environmental gain or loss.
This is ‘version 3’ of triple bottom line accounting, Dr Wright says, and it will “iron out some big wrinkles”.
“It will provide tools for resource allocation – governments will have a mechanism to choose between projects, to choose between ways of doing projects.”
And governments are interested: the NSW Department of Industry recently contributed $1 million towards a $9 million NSW Deep Green Biotech Hub based at UTS.
Associate Professor Chris Bajada, a UTS Business School economist, has been working on macroeconomic modelling of Australia’s current and potential bio-economy – something that hasn’t been done before.
He has also been running estimates of the economic impact of investment in R&D, pilots and commercial infrastructure in the NSW bio-economy.
He says the big question is how do we bring people along as we seek to reduce carbon emissions, when this is now associated in people’s minds with high prices and lower living standards?
He says the current approach typically involves market-based mechanisms that increase production costs by pricing carbon, thereby raising prices, reducing consumption and economic activity and therefore emissions.
Instead, “there is a good chance you’ll get buy in from society if you say ‘We are going to embark on a strategy in search of alternative resources that will sustain not only economic growth and prosperity but also deliver the necessary environmental benefits,” he suggests.
So, rather than a stick governments could offer a carrot in the form of incentives and support for innovations such as algae biotech that has the potential to become commercially viable.
“When you approach it in a way where you are thinking about solutions, you open up avenues you might never have explored,” he says. “You end up in a different place by approaching the problem in a different way.”