The demand for fossil fuel alternatives is inelastic. Heightened energy security concerns and the proliferation of greenhouse gas emissions have led to revisions of national fuel policies and investment by governments (e.g. U.S, Europe, Brazil, China and India), industry and academia, to advance the production and integration of Biofuels. Compatible with existing machinery and infrastructure, Biofuels can replace or be blended with conventional fuels. The race to establish “biological oil wells” is on. Drop-in biofuel is increasingly recognized as the near- medium- and long term substitute to petroleum-based fuels in aircraft, automobiles, ships and industry, because it can be used immediately, without replacement of engines or distribution infrastructure. Microalgae, which can produce sugars and oils as feedstock (raw material) for drop-in biofuels, are the premiere source for feedstock, while providing excellent financial returns. Microalgae oil has been successfully transformed into biodiesel, hydro-processed renewable diesel (HRD) and jet fuel. Microalgae are particularly promising since, among others attributes they do not compete with food production and have a higher yield than other plants with oil extraction potential.
In an ambitious plan, the US Navy – the world’s largest consumer of marine fuel (10M barrels/year), aims to deploy its “Great Green Fleet” by 2016, running entirely on alternative fuels. Various vessels are already sailing on a 50-50 blend of petroleum and algae-derived HR-D.
One of the most progressing market segments that is expected to develop rapidly is the jet fuel industry, a global market of USD 140 B. The aviation industry is highly interested in finding a substitute to kerosene, because of regulation requiring aviation companies in the EU to reduce carbon emissions and compensate for the pollution, caused by airplanes. A report from RDC Aviation and Point Carbon concluded that the aviation industry will face an initial carbon liability of USD 1.53 B in 2012. Using bio jet-fuel at a stable price also reduces the hedging costs on the fuel itself. Recognizing the potential savings offered by using biofuel, several airlines have already conducted successful flights using fuel blends containing as much as 40% microalgae-derived biofuel. Lufthansa, American Airlines, United, Continental Airlines, JAL, KLM, Virgin Atlantic and Air China all successfully completed their first commercial flights using a blend of kerosene and bio jet-fuel (in one case the blend contained 40% bio jet fuel derived from microalgae).
For customers in the aviation industry, it's crucial to sell a finished bio jet-fuel product. However, today, many companies have developed expertise in just one area of the process of the microalgae-to-biofuel process. For a complete process, it's necessary to cover the following areas:
- Development of algae strains
- Mass-scale cultivation
- Biomass dewatering
- Oil extraction
- Bio fuel production, and
- By-product production and formulation
UniVerve brings together the biology and engineering expertise. It mastered the production process, from strain-to-dewatered biomass, and it completes the process with off-the-shelf extraction technologies, in order to offer a complete solution to its partners and customers. UniVerve's process includes:
- High-yielding microalgae strains for various climates and industries
- A proprietary growing, harvesting and dewatering system and method that is economically and ecologically optimized
- Integration of a 3rd party oil extraction technology to produce usable feedstock for the biofuel, feed, food and other industries, depending on the customer and consequently, the strain in use
Omega-3 fatty acid are considered as essential fatty acids, meaning that they cannot be synthesized by the human body but are vital for normal metbolism. They are commonly found in marine and plant oils. So far, the main source of Omega-3 is derived from fish oil. However, fish do not produce Omega-3 - they consume microalgae that do it
The main two Omega-3 fatty acids are EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid). EPA and DHA fatty acid make up two of the most important acids required by the body. Both acids are part of Omega-3 fatty acids. Most people do not get adequate Omega-3 in their daily diet. UniVerve's selected strain is a natural producer of EPA. Studies have shown that EPA has beneficial potential in cardiovascular health, schizophrenia, it can improve patients’ response to chemotherapy and reduce the probability of developing particular kinds of cancer, which includes multiple myeloma and reduce depression and suicidal behavior.
The market for Omega-3 products is expected to reach USD 35 B by 2016. Omega-3 products are best sellers in nutraceuticals and health shops. However, most products nowadays are derived from fish and krill oil. Both are not sustainable, hold negative characters such as unpleasant smell, and are becoming unfavored by consumers. Algae Omega-3 oil products are widening in baby food formulas, functional foods, nutraceuticals and pharmaceuticals. Yet algae oil demand exceeds its supply. Recently, EPA pure based FDA-approved drugs were introduced to the US market to treat cardiovascular diseases. In view of the widespread reluctance of the public to consume sufficient amounts of fish, food supplements containing DHA and EPA became increasingly important sources of these nutrients for young and old alike. In addition algae oil and thus algae derived Omega-3 are of Vegetarian source and could certified as Kosher and Halal making them attractive for premium and large consumers markets.
Global animal and aquafeed production is 525 million ton a year. The aquafeed market is expected to worth USD 124 B by 2019 (Markets and Markets analysis). Predominantly animal and aquafeed needs protein and lipids. High concentrated protein 60% and lipids is sourced from fishmeal and low quality protein is sources from cereals such as soy, wheat, canola at 30% protein level. Livestock and fish are herbivores, carnivores or omnivores so have a natural metabolic preference for their feed.
High protein source like fishmeal include high levels of protein including limiting amino acids such as Lysine and Methionine. Fishmeal commodity is increasing in price, rising from $1,200/ton to currently >$2,000/ton. Many livestock producers are using lowest cost formulations that are substituting lower cost protein from cereals and grain, typically at $300/tonne. This means that livestock and fish are increasingly eating unbalanced diet that do not hold holistic or synergistic balance of ingredients which affects animal growth, health and farm profitability.
This creates two opportunities for UniVerve in animal feed and aquafeed, including:
- Microalgae protein feed ingredient, as a sustainable replacement of fishmeal at around $2,000/ton
- Functional Feed Additive ingredient, added value as a holistic blend of limiting amino acids, fatty acids, minerals, pigments and other essential compounds that improves the feed conversion to meat ratio and thus can save farming feed costs. This suggests a price of >$2,000/ton or more depends on proven efficacy.