Super fuel or super hype? Ever since the US made an “aquatic species program” one of its biggest priority areas in 2005, algae harvesting has become one of the hottest technologies in the world.

One of the oldest and simplest organisms is now the focus of billions of dollars of investment in research and development, commercialisation and business plans.

And if its promoters are right, there’s not much it can’t do: it captures greenhouse emissions from power plants, creates biofuels for transport, jet fuel for planes, feedstock for animals, protein for humans and animals, acts as a fertiliser, a key bonding agent for plastics, and a key ingredient for cosmetics and foodstuffs. And it can clean-up waterways and sewage ponds as well. In short, it seems it can power us, feed us, pamper us, and then clean up the mess we leave behind.

Is it all too good to be true? Time will tell. Scientists and researchers have been struggling with the challenge of turning algae into fuels for decades, although algae is already used as a bonding agent in some foodstuffs, toothpastes and cosmetics as part of a $7 billion industry.

But the impetus provided by the US funding boost, a rush to find solutions to the challenges of greenhouse emissions, fuel security in western economies such as the US, and food security in developing nations, along with interest from oil majors such as Chevron and ExxonMobil, has created something of a boom as new algae technologies move out of the lab and into commercial-scale production.

A series of high profile fund-raisings in the US has added to the excitement, with Solazyme —  which has a contract to deliver shipping and jet fuel to the US Navy — raising $US52 million, and one company, PetroAlgae, fuelling the boom mentality by proposing to raise $50 million despite having no revenue. It’s estimated there are more than 300 companies pursuing commercialisation opportunities, although few are actually producing.

At least a handful of these companies are located in Australia and New Zealand, with three of them — MBD Energy, Algae.Tec and Aquaflow Bionomic — in fund-raising mode, but taking three very different approaches to the technology.

In scale of projects and breadth of opportunity, MBD — backed by Anglo American — ranks itself among the top 10 in the world, and is rolling out demonstration projects of its greenhouse reduction process at the Loy Yang, Eraring and Tarong coal-fired power stations. The company says carbon dioxide can be successfully trapped and piped into a series of algae ponds, with the produce then used for a range of other valuable products — about one third for plastics or fuel, and about two thirds for low-methane feedstock.

MBD CEO Andrew Lawson says there has been a non-stop procession of international government and business delegations visiting his company’s test facility at James Cook University. Last month, a 16-strong delegation from Thailand included the head of the country’s largest listed company, the head of the national fuel company and the director general of the energy and renewable energy departments. Other delegations have come in from China, Japan, India, the Middle East, Europe and North America.

He says all delegations are interested in the technology’s ability to sequester carbon dioxide, although the interest in bi-products is mostly focused on food in Asia countries, and fuel in developed countries. “Everyone wants to take it to their country and they are all really keen on the value add,” he says. “In Australia all the focus has been on putting carbon underground and treating it as an expensive trade waste — but this offers a solution to so many things, you have to look at recycling opportunities and the valuable products they create.”

Algae.Tec is the only Australian algae company currently attempting a stock market listing, raising money to help fund the roll-out of its algae bio-reactors, which will be boosted by a solar array to speed algae growth and reduce the area needed to produce fuels. It proposes to install a pilot plant at the Manildra ethanol facility in Nowra.

“There is no doubt that as the price of oil rises, there have to be alternatives,” says Algae.Tec chairman Roger Stroud. Algae.Tec proposes to raise $7.5 million and sees four principal revenue streams from its products: carbohydrates for ethanol, pelletised proteins for feedstock, vegetable oil for biodiesel, and a combination of carbohydrates and protein for jet fuels. He says that is without factoring revenue from emissions abatement. “The carbon price will be a bonus,” he says.

The biggest issue for so-called algaepreneurs comes from identifying which of the 30,000 or so known species of algae is the best suited for their business plans, and how to grow them without contamination and the associated difficulties of dewatering and oil extraction on a large scale.

Aquaflow, which is raising $500,000 as a precursor to an IPO, is taking a different approach, looking at ways of harvesting wild algae that grows in municipal sewage ponds as a way of recycling water and creating biofuels, and applying the same technology to clean up waterways. It has several test facilities in New Zealand and argues that using wild algae avoids the problem of contamination of a monoculture.

Some of the claims about yields are extraordinary. It is claimed that algae can produce more than 37,854 litres  to .4 hectares (10,000 gallons an acre), more than vegetable crops such as corn by a considerable factor. One new company claimed it could produce more than 56,781 litres of fuel per .4 hectare (15,000 gallons of fuel per acre from) what it calls “direct solar fuels”, because they don’t necessarily need carbon dioxide as a feedstock.

“There are a whole number of new companies starting out, venture capital coming in … there’s a bit of a boom scenario happening,” says Aquaflow director Nick Gerritsen. But he is wary of some of the new technology, particularly those that promise high yields from GM products, which has attracted the attention of authorities such as the Food and Drug Administration, because of similar concerns raised by products such as nano-particles. “We question the logic of a number of these projects,” Gerritsen says.