MicroalgaeA market analysis carried out as part of the Interreg KASK IVA project:

Blue Biotechnology for Sustainable Innovations, "Blue Bio"

January 2013

MicroalgaeA market analysis carried out as part of the Interreg KASK IVA project:

Blue Biotechnology for Sustainable Innovations, "Blue Bio"

January 2013

3 Summary

7 1. Background

9 2. Microalgae Player Picture in the Nordic Countries

32 3. Global Microalgae Market Segments and Potentials

46 4. Analysis on How the Nordic Countries Best can Capitalise on its Strengths in the Light of Current and Emerging Opportunities for Algal R&D, and in the Context of International Competition

65 5. References and Sources

67 Appendix 1: Microalgae Biology

72 Appendix 2: Microalgae Cultivation and Upscaling

Contents

The project Blue Biotechnology for Sustainable Innovations, or "Blue Bio", commis-sioned this study to obtain a view on the feasibility and potentials of developing a future microalgae global knowledge hub, with accompanying algae based bio-economy, in the Nordic countries in general and in the KASK-region in particular. To facilitate this, the study has emphasized an overview of current microalgal activities and resources in the Nordic countries, embracing R&D and expertise environments, commercial players, algae strain collections, relevant infrastructures, etc. Based on this information, on market potentials for algal products and services, and on the algal interest globally, a brief analysis has been carried out regarding how the Nordic countries best can capitalise on its strengths in the light of current and emerging opportunities for algal R&D, and in the context of international competition. This is however a complicated matter, and a deeper study into this great treasure of information is recommended to be able to give really qualified advice on how the Nordic countries best can capitalise on its strengths. According to the survey, in the Nordic countries 25 universities and R&D:s are working on algal projects, while only 7 companies are working on commercial algae projects. It is concluded that academia in the Nordic countries has great expertise in the environmental and ecological sectors for microalgae, especially (but not exclusively) in the marine sector, however not many substantial business activities related to algae are identified. The study shows that the Nordic countries has a wealth of biological expertise to offer to establish algae as part of a bio-based economy, both through high tech approaches to use algae as an industrial biotechnology platform, and by developing algal products and services in the concept of integrated bio refining. This is complemented by exten-sive ecological expertise that helps to understand and model the role of algae in climate change and develop them as bio-indicators for environmental impact."

There might be several reasons for the lack of commercialisation of this wealth of algal expertise in the Nordic countries, but in this study, we wish to hold forth the two following problems and our suggestions for how to solve them:

Summary

3

1. A lack of integration of the research community across the breadth of relevant disci-plines: this needs to be catalysed by providing funding for multidisciplinary research programmes, and where possible, these should be linked to collaborative demonstra-tion sites also involving industry.

2. Progress in the field has been seriously hampered by lack of funding. The Nordic countries are in grave danger of being marginalised on an international scale, since especially the US and BRIC countries have been and are investing heavily in this arena. Unless this situation is remedied, further opportunities will be lost.

It is recommended to develop a virtual Nordic countries centre of excellence on algae to provide consolidation of resources and knowledge and hence much needed capacity building in multidisciplinary expertise. Such a centre would need to receive core funding from the research councils or other public sources and supplementary funding also from private sector on e.g. contract research basis, to support both fundamental scientific research needed, underpinning the development of novel algal products and services as well as ensuring openings for commercial gateways. Hence, it would work closely with a network of industry-led pilot and demonstration sites on LINK-type projects. These would facilitate the optimisation and deployment of integrated algal solutions at increas ing scale. Further it is recommended that the research councils in the Nordic countries together with other funding entities like banks, venture capital and support from relevant industries establish an algal Technology Innovation Centre (TIC). A TIC would provide the pull-through to commercialisation beyond the technology readiness levels which mostly fall under the remit of the research councils. The above models might adopt inputs from well proven concepts from Australia: Cooperative Research Centers (CRC), where Academia, industry, and capital work closely together to address market needs through common robust R&D. The combina-tion of a strategically-funded academic centre of excellence that builds on the strengths of the algal research community in the Nordic countries, with a technology tnnovation centre that takes step-changing research outputs through to commercial application, would provide a complete and strong pipeline which would provide direct benefit to the Nordic countries by commercializing the potentials and contribute to a sustainable bio-based economy in the Nordic countries.

4

Further to the Summary:1. An area with particular developmental potential in the Nordic countries at this time

appears to be the exploitation of high value chemicals for the cosmeceuticals and nutraceuticals markets in the context of industrial biotechnology.

2. Residues after extraction may be used for anaerobic digestion and the resulting biogas injected into the gas grid, although co-digestion with another feedstock will be needed to provide the necessary economies of scale. Biomass production costs can be lowered by growing the algae on nutrient-rich waste water and with waste CO2; appropriate regulatory standards would need to be met.

3. Other areas of significance include: A. Replacing fishmeal in animal feed. B. Developing integrated growth systems with anaerobic digestion and aquaculture. C. A new and valuable source for omega-3 both for aquaculture and for the omega-3

industry. D. The Nordic countries have a world leading greenhouse and horticulture expertise

which might contribute to the development of illumination systems adapted to microalgae.

E. A further opportunity for the Nordic countries lies in using its R&D excellence to develop IP that can be applied in places more suited to large-scale algal production.

F. Generating IP e.g. for liquid biofuels (to be applied internationally), The Nordic countries in general, and the KASK “corridore” in particular, represent a generic competitive edge in a European and global context: robust economies, strong cross border communication and collaboration lines in science, business, culture and politics. This combined with strong maritime and marine traditions, contemporary aquaculture and fishery industries, and substantial biomedical expertise and players is also a strong and versatile platform out from which to launch and create new economies like those based on marine biotechnology.

Hence, given adequate public support and other necessary frameworks together with strong engagements from the private sector, algae have the potential to become a sub-stantial driver in the development of a bio-based economy in the Nordic countries.

5

6

According to FAO statistics, world food production from fisheries and aquaculture are about 140 million tons annually, which is only a small fraction of the 7.5 billion tons produced on land. To be able to feed 9 billion people in 2050, a strong growth in the food supply from the sea on a global basis is needed. Meanwhile the people of the rich world are suffering of lifestyle diseases such as obesity, cardiovascular diseases and diabetes, and the proportion of older people increases. Therefore, in the long term, world fisheries and aquaculture industry are facing an increasing demand both in terms of volume products and food specialties that contribute to wellbeing and good health. The marine industry has, however, even with its relatively green profile (area efficient, low carbon footprint and effective FCR (Feed Conversion Ratio)), also significant challenges. The important thing is to ensure an adequate supply of feed for the growing production. The biggest bottleneck in this respect is probably the availability of marine lipids. Both salmon and people need supply of the polyunsaturated lipids (DHA and EPA) to stay healthy. Therefore, consequently, in the long term, the demand of polyunsaturated oils becomes a major challenge. The pressure on fishery resources has a sustainability aspect which also brings with it a strong price pressure on raw materials and inputs. Ingredient industry therefore looks for new sources of marine oils not only by harvesting of the oceans’ resources at lower trophic levels, but also by cultivating.

Microalgae are Pointed Out as a Potential Future Solution.But, the price of algae-based production of marine oils (omega-3 etc) for feed and human consumption is still relatively high. Technological developments (photobio-reactors and processes) can, however, make such a production competitive over time. In addition, microalgae represent a special dimension of sustainability by being autotrophic (produce nutrients from inorganic materials), very effective on energy costs (light) and by capturing carbon. Although there is a relatively large international R&D activity in this field, there are distinct challenges, both regarding upscaling of cultivation technology and downstream processing, to be able to produce high priced nutrients, ingredients to dietary sup-plements and pharmaceutical products in a way that is economically sustainable in the short term. Production of algae as a complete feed or as a carrier of bioenergy has however revealed greater economic potential in the long term. To be successful when large-scale applications of micro algae biotechnology get their breakthrough we must establish a business and competence environment in terms of knowledge, technological and market position. One of the goals of the Blue Bio project has been to research the possibilities for and to support the development of such a platform.

1. Background

7

8

The Nordic countries have a great treasure of relevant microalgal experience both in the academic arena, and in industry. Blue Bio commissioned this study to understand the landscape of the microalgae players for the Nordic countries. To facilitate this, the study takes stock of current microalgal activity in the Nordic countries. Build on this information and on markets potentials for algal products and services and the algal interest globally, a brief analyses has been performed on how the Nordic countries best can capitalise on its strengths in the light of current and emerging opportunities for algal R&D, and in the context of international competition. A deeper study into this great treasure of information is recommended to be able to give qualified advices on how the Nordic countries best can capitalise on its strengths. The inventory has been divided into the following parts:

A. Microalgal culture collections

B. Universities and scientific institutions

C. Microalgae cultivation as feed in aquaculture

D. Industrial microalgal activity in the Nordic countries

E. Industrial microalgal activity operating outside Nordic countries

2. Microalgae Player Picture in the Nordic Countries

A. Microalgal Culture CollectionsWe have identified two very central cultural collections in the Nordic region, which is very well connected to World Federation for Culture Collections (WFCC).

B. Universities and Scientific InstitutionsSeveral universities and scientific institutions have cultivated microalgae to do research on microalgal biosystematics, biochemistry, physiology and species have been screened for bioprospecting purposes. Their contribution in developing microalgae knowledge and experience to establish the marine juvenile production has been significant and important. Now, these institutions are contributing in the work of developing micro-algae biomass as a source for biofuel, animal and human nutrition ingredient production

Summary of the Study:

9

as well as a number of other important biopolymers for the pharmaceutical and cosmetic industries. The following institutions are covered by this study:

DENMARK: • AlgaeCenterDenmark• DanishTechnologicalInstitute• Skaldyrcenter• TechnicalUniversityofDenmark(DTU)• AalborgUniversity• AarhusUniversity

FINLAND• FinnishEnvironmentInstitute(SYKE)iscollaboratinginthefollowingprojects;• VTTTechnicalResearchCentreofFinland

NoRwAY• InstituteofMarineResearch(ImR)• Nofima• NorwegianUniversityofTechnologyandScience(NTNU)• SINTEF• UniversityofBergen(UiB)• UniversityofLifeSciences(UMB),atÅs• DepartmentofAnimalandAquaculturalSciences,atÅs• Bioforsk• Universityofoslo(Uio)• UniversityofStavanger• UniversityofTromsø(UiT)

10

SWEDEN• ChalmersUniversityofTechnology• KTH,RoyalInstituteofTechnology• LinnaeusUniversity• MälardalenUniversity• NordicMicroalgae• SwedishUniversityofAgriculturalSciences• UppsalaUniversity

C. Microalgae Cultivation as Feed in Aquaculture• Asummaryhasbeenmadeofseveralmarinefryandbivalvehatcheries

D. Industrial Microalgal Activity in the Nordic Countries:• AlgalifAS• AlgroFreberg• BMEnergyGroupandAstaNovoAS• Co2BIO • MicroAAS• PromarAS• StatoilAS

E. Brief Nordic Industrial Microalgal Activity Operating Outside Nordic Countries• MicroAlgaeAS• SaharaForestProject

11

2A. Microalgal Culture Collections

The World Federation for Culture Collections (WFCC) (through the activities of Professor Skerman, University of Queensland, Australia, and his colleagues in the 1960’s) pioneered the development of an international database on culture resources worldwide. The result is the WFCC World Data Center for Microorganisms (WDCM). This data resource is now maintained at National Institute of Genetics (NIG), Japan and has records of nearly 476 culture collections from 62 countries. The records contain data on the organisation, management, services and scientific interests of the collections. Each of these records is linked to a second record containing the list of species held. The WDCM database forms an important information resource for all microbiological activity and also acts as a focus for data activities among WFCC members. Microalgae strains encountered in the WDCM may be ordered and sent from the respective culture collection in order to start up an aseptic algae culture.(http://www.wfcc.info/home/)

There are two algae culture collections in Scandinavia, one in Denmark and one in Norway.

DMC 935: The Scandinavian Culture Collection of Algae and Protozoa (SCCAP) at the University of Copenhagen was initiated in 1986 as an outcome of the recommenda-tions by an international panel evaluating ’Danish Hydrobiology’. The recommendation was supported by the Science Faculty at the University of Copenhagen and the Danish National Science Foundation. The Culture Collection, hereafter known as SCCAP, was originally based on the collection of algal cultures set in the 1950s and 1960s by Tyge Christensen.Manyofhiscultures,e.g.Vaucheriaspp.,arestillmaintainedinthecollec-tion. The SCCAP presently comprises more than 900 strains (c. 265 genera and 460 species) with representatives from most algal divisions. Nearly 700 are available to the public. The Collection contains in particular marine nanoplankton flagellates, benthic marine brown and green algae, and a growing number of dinoflagellates. The SCCAP is headed by the curator Gert Hansen. (http://www.sccap.dk/)

WDMC 498: The Culture Collection of Algae (NIVA) was initiated in the early 1960s, when a selection of microalgal cultures was brought together to be used in experimental studies and bioassays in research on water pollution at the Norwegian Institute for waterResearch(Norskinstituttforvannforskning,acronymNIVA).Todaythecollec-tion comprises more than 750 strains of prokaryotic and eukaryotic microalgae repre-senting ca. 300 species. Most of the strains were isolated from Norwegian lakes, rivers and coastal waters. The collection has particularly been developed for studies related to cyanobacteria, and includes ca. 490 strains of this group. The filamentous cyanobacte-ria compose the largest fraction. Many of the cyanobacterial strains possess the ability

12

to produce toxins, volatile biogenic substances, biohydrogen or other compounds of environmentalortechnologicalsignificance.ThemainobjectiveoftheNIVACultureCollection is to isolate, maintain and supply microalgal cultures for use in research, teaching and for applied purposes. The collection has promoted research on microalgal biosystematics, biochemistry, physiology, and was instrumental in the development of algalculturetechnologyatNIVAandelsewhere. Olav M. Skulberg (olav.skulberg@niva.no) and his wife Randi Skulberg are respon-sible for the collection which is financed by the Norwegian Ministry of Environment.

2B. Universities and Scientific Institutions

DENMArk1. AlgaeCenter Denmark, www.algecenterdanmark.dkConsortium including collaborators from Aarhus University, Danish Technological Institute(DTI), Kattegatcentret and Ocean Centre Denmark. The Kattegatcenter in Grenaa Harbour has a recirculation system for research and development in the use of algae as a resource for sustainable energy, food, medicine and food ingredients.

2. Danish Technological Institute karin Svane Bech, kasb@teknologisk.dk DTI is currently leading the project “The Macro Algae Biorefinery – sustainable production of 3G bioenergy carriers and high value aquatic fish feed from macroalgae (acronym: MAB). The project aims at converting brown macro algae (Laminaria and Saccharina) to liquid biofuel and using the waste products for fish feed. The project runs from 2012 – 2016. DTI is partner in AlgaeCenter Denmark which is a research- and development plant located in Grenaa, Denmark, dedicated to increase the knowledge on cultivation of macro algae under controlled conditions. The plant is the first plant of its kind in Denmark. DTI was leading the nationally funded project on energy production (AlgaeCenter Denmark (Ulva lactuca)) using the green macro algae sea lettuce (Ulva lactuca) as a feedstock for bioethanol, biogas and solid combustible biofuels. The project aimed at producing Ulva biomass in land based growth systems and through harvest, handling and conditioning to convert the algae biomass to energy. The project involved major Danish universities and energy companies and ran from 2009 – 2012. Further, DTI are involved in two projects with algae for energy and value added products which currently are in contract negotiation with the European Commission, one project BioWalk4BioFuel addresses the usability of various macro algae as feedstock for biogas plants and the other EuroBioRef includes algae among several biomass types in a biorefinery concept producing a range of products including transport fuel and non-fossil chemical.

13

The main involvement from DTI is on:

• Projectdesignandmanagement• Designofgrowthfacilities,• Harvest,handlingandconditioningofthebiomasse.g.drying,sizereduction,

pelletizing • Thermalconversionofthebiomass• Qualitycharacterizationaccordingtointernationalstandardse.g.CEN,ISo

and DIN

DTI has a complete laboratory for physical, mechanical and chemical characterization of solid biofuel and a pilot plant with laboratory-to-full-scale equipment for test and production of solid biofuel pellets and feed pellets.

3. SkaldyrcenterJens Kjerulf Petersen, jkp@skaldyrcenter.dkThe Danish Shellfish Centre does research in production technology and ecological impact of macroalgae. Currently they work on Laminaria and Palmaria. They also develop hatchery procedures e.g sporolation, test new species and develop on-growing procedures.

4. Technical University of Denmark (DTU)BiosystemsDivision,RisøNationalLaboratoryforSustainableEnergyClaes Gjermansen, clgj@risoe.dtu.dk and Anders Brandt DTU works on biodiesel fuels derived from microalgae. Production of triacylglycerols in agricultural plants like canola, soybean, palm tree or other oil producing plants for biodiesel cannot be scaled up without seriously compro-mising global food supply. Economical production of lipids in microalgae requires an efficient and cost-effective cultivation of microalgae species that produces high amounts of lipids. DTU have chosen to study a limited number of microalgae species for oil production. These species are being mutagenized and variants with proper phenotypes are being selected. Targets for improvements are: Increased growth rate, increased cell size, elevated lipid content, improved salt tolerance (for seawater algae), and enhanced lipid extraction yield. Analyses including fatty acid composition of neutral and polar lipids by liquid- and gas-chromatography coupled with mass spectrum analyses as well as fluorescence spectroscopy and flow-cytometry employing specific dyes. Screening of existing culture collections as well as algae collected from natural habitats will also be performed in order to identify species that may accumulate even higher amounts of lipids. The characteristics of the ultimate microalgae for large-scale lipid production are: Easy to cultivate in inexpensive media; fast growth and high biomass production; resistance to biological contamination; enhanced and consistent lipid production; easy to harvest; simple lipid recovery

14

The well-characterized green algae, Chlamydomonas reinhardii has also been chosen as a model. Mutations are induced by genetic engineering and by conventional methods. The experiments serve as “proof of concept” for various genetic modifications and selec-tion methods. If successful, similar protocols will be used for improvement of other microalgae species without employing in vitro DNA-techniques. DTU are also studying the robust Dunaliella sp., which can tolerate a wide range of pH and salt concentrations. This species is more vital in a wide range of environmental conditions and thus expected to be more economically useful than other algal species for large scale cultivations in the sea or in ponds. Manipulating the supply of CO2, the salt concentration and/or the nitrogen content of the growth medium significantly influenc-ed the lipid production of the algae.

5. Aalborg UniversityDepartment of Biotechnology, Chemistry and Environmental EngineeringNiels T. Eriksen, Associate Professor, nte@bio.aau.dk Main focus lies with the production potential (particularly of those species that grow heterotrophically) of microalgae and the design of photobioreactors. He also have an interest in production of phycocyanin, possibly for nutraceutical use.

6. Aarhus University,Department of Bioscience – Marine EcologyAnnette Bruhn, anbr@dmu.dk Annette works with the cultivation of algae, primarily green algae for bioremediation of waste water (municipal as well as agricultural), but also brown algae for production of biomass for fish feed and energy, as well as bioremediation of coastal waters. In her group they have previously also cultivated red algae, Chondrus crispus in a project with the food industry where the carrageenan was evaluated and used as a food ingredient by CP Kelco. They have a pilot scale cultivation facility with 12 landbased tanks, and a brown algae hatchery in which they are able to produce gametophyte culture and seeding lines. They also hope to start a test facility for cultivation of brown algae with a size of 1-5 ha. The pilot scale facility currently used to cultivate algae for wastewater remediation consist of 12 tanks of each 2 m3.This facility can be used for other purposes than testing bioremediation. There are two separate lines of each 6 tanks, so that they are able to compare algal growth on two different types of water – potentially in combination with two different algal species or biomass densities in a 2*2 set-up with triplicates. The tanks are supplied with aeration, flow can be modified and temperature, salinity, pH, and oxygen is monitored online. In addition they will be cultivating brown algae in more than one hectare of coastal waters the following two seasons in co-operation with the Danish Shellfish Centre.

• Brownalgae: Testing production of biogas, bioethanol and biobutanol. • As fishfeed: Directly from the algae, but also from residuals from bioenergy produc-

15

tion since in these the carbohydrates are removed and consequently the proteins are up-concentrated. The different type of feed will be tested in feeding trials.

• Remediation of coastal waters: the effect will be evaluated according to the N, P, C and heavy metals harvested in the algal biomass.

FINlAND1. Finnish Environment Institute(SYKE) is collaborating in the following projects;http://mmm.multiedition.fi/syke/envelope/Envelope_4_2010/Envelope_4_2010_Cultivated_algae.php

Cultivated algae may be a future energy source. The Marine Research Centre of the FinnishEnvironmentInstitute(SYKE)isexaminingthepotentialuseofalgalbiomassfor energy production.

• SubmarinerLead partner: Maritime Institute in Gdańsk Submariner is a combined Baltic Sea Region and EU project that intends to provide the necessary basis for the region to take a proactive approach to improving the future condition of its marine resources and the economies that depend on them. With novel technologies and growing knowledge opportunities are provided for new uses of marine ecosystems, which can be both commercially appealing and environ-mentally friendly. These include macroalgae cultivation, blue biotechnology, innovative fish and mussel mariculture solutions and wave energy.

• Project ALDIGAThe main goal is to design and validate a new integrated concept of biowaste-to-energy based on algae and biogas production. The aim is to develop a process requiring minimal external energy involving efficient utilisation of all sidestreams generated in addition to the main fuel streams, biodiesel and biomethane. New co-operation models relating to clean energy including various utilisation of methane, service and utility providers for biodiesel production, opportunities for industrial waste utilisation for renewable energy will be proposed and tested. TheTechnicalResearchCentreofFinland,VTTwascollaboratinginthisprojectby cultivating algae, analyzing lipid and fatty acid composition, looking at side stream compounds and doing modeling.http://www.tekes.fi/u/BioRefine_Yearbook_2011.pdf • Project ALGIESELAlgae for biodiesel production. http://www.aka.fi/en-GB/A/Research-programmes/Ongoing/Susen/Projects/

16

• Project LIPIDOEU targets are that 10% of the fuel consumed by 2020 should come from biocompon-ents. In producing biomass fuels, it is important to compare production alternatives for various primary sources of raw materials. In this project the researchers aim at optimiz-ing algal culturing as a source for biodiesel production by looking at how environmental conditions like light, temperature and nutrient limitation affect growth and lipid yield of microalgae. Project partners: Norwegian University of Science and Technology(NTNU), University of Oslo(UO), Ludwig Maximilian University(LMU) and Icelandic Energy Research Institute(IERI). http://www.ymparisto.fi/default.asp?contentid=324867&lan=EN • Project Carbon Capture and Storage ProgramThe program objective is to develop CCS-related technologies and concepts, leading to essential pilots and demonstrations by the end of the program 2014-2015. Com-mercial applications that promote Finnish CCS innovations will be available from 2020 onwards. A further objective is to create a strong scientific basis for the development of CCS components, concepts and frameworks, and to establish strong international networks that enable active international CCS co-operation. SYKEspartintheprogramwillbetomakeapreliminarylifecycleassessmentofcarbon capture using algae. http://www.ymparisto.fi/default.asp?contentid=398332&lan=fi&clan=en

• Project, cooperation with industryNeste Oil has launched a joint algae research program with the Marine Research Centre atFinnishEnvironmentInstitute(SYKE).TheprogramispartofNesteoil’seffortsaimed at using algae oil as a raw material for producing NExBTL renewable diesel in thefuture.ResearchwithSYKEwillfocusontestingthelipidproductioncapacityofdifferent types of algae and analyzing how the quality and quantity of these lipids can be optimized by adjusting the conditions under which algae are grown. Launched this August(2011), the program will last two years. http://www.nesteoil.com/default.asp?path=1;41;540;1259;1260;16746;18082

2. VTT Technical research Centre of Finland Marilyn Wiebe Marilyn, wiebe@vtt.fi ThecurrentinterestsatVTTare;1. Energy: fatty acids as a raw material for renewable/biodiesel. Projects include; ALGIESEL, N-INNER LIPIDO, Microfuel and ALDIGA.2. Energy:Volatilefuelsandlongerchainalkanes,projectDirectFuel.3. High value compounds: secondary metabolites, project MAREX.

17

They work with algae to expand their current expertise in metabolic engineering and cultivation of micro-organisms and higher plants as cell factories and to expand their current activities in bioenergy production. This is done by investigating biodiversity of aquatic organisms and exploiting their higher specific growth rates compared to higher plants and use metabolic engineering with several genomes available. They also look at the possibilities for robust cultivation, including photo-, mixo-, and heterotrophic options as well as algae’s potential in waste treatment. They have the ability to engineer strains for new fuel opportunities and improved efficiency and do screening of known and new strains. Project MAREX- Exploring Marine Resources for Bioactive Compounds: From Discovery to Sustainable Production and Industrial Application. Funded by the EU the project has 19 partners in 13 countries and will run until 2014. The aim is to isolate and characterize new bioactive compounds from organisms harvested in seas and oceans. Project DirectFuel- Direct biological conversion of solar energy to volatile hydro carbon fuels by engineered cyanobacteria. Also funded by EU, and is coordinated by the University of Turku with the participation of 5 universities and 2 companies as well as VTT.

NOrwAy1. Institute of Marine research (Imr)With a staff of almost 700 the Institute of Marine Research is Norway’s largest centre of marine science. Their main task is to provide advice to Norwegian authorities on aquaculture and the ecosystems of the Barents Sea, the Norwegian Sea, the North Sea and the Norwegian coastal zone. For this reason, about fifty percent of their activities are financed by the Ministry of Fisheries and Coastal Affairs.

2. NofimaThe Norwegian Institute of Food, Fishery and Aquaculture (NOFIMA), established in 2008, is Europe’s largest institute for applied research within the fields of fisheries, aqua-culture and food. Marine Biotechnology is one of their research areas including mole-cular biology, marine bioprospecting and bioprocessing. Nofima has recently entered into a strategic research alliance with Alltech, one of the world’s largest animal health and nutrition companies (http://www.nofima.no/en/nyhet/2012/07/nofima-in-alliance-with-global-giant). Alltech Algae in Kentucky is one of the world’s largest algae produc-tion facilities, which’s facility was acquired in 2010 from Martek Bioscience Corporation for approximately USD 14 million and has been renovated to be one of the largest algae production sites in the world (http://www2.alltech.com/india/releases/Pages/Alltech-Algae-Facility-Kentucky.aspx).

18

3. Norwegian University of Technology and Science (NTNU)Research Projects at Faculty of Natural Sciences and Technology, Department of Biotechnology related to microalgae:• BIoNA–BiogasReactorTechnologyforNorwegianAgriculture(2011-2014)• BiorefineryApplication(2011-2011)• SoLBIoPTA–BiotechnologicalProductionofMaterialsforoptimizedSolarCell Efficiency (2010-2013)• Promicrobe–Microbesaspositiveactorsformoresustainableaquaculture (2009-2013)• BiogasTrøndelag–Microbialmethodsfordesignandoperationoflocalbiogas facilities (2009-2010)• BiologicalNremovalfromprocesswastewaterofaCo2 capture plant (2008-2010/-16)• Lipido–optimizingLipidProductionbyPlanktonicAlgae(2007-2011)• Ballastwater–Evaluationofmethodsfortreatmentofmicrobesinballastwater (2005-2009)• CoDTECH–Aprocessorientedapproachtointensiveproductionofmarine juveniles with main emphasis on cod (2003-2008)(http://www.ntnu.edu/web/biotechnology/envbiotek/projects)

Department of BiotechnologyMatilde Chauton, matilde.chauton@biotech.ntnu.no At the present they have activities including algae within topics such as biofuels (trigyceride storage/biodiesel) and diatoms in solar cell technology. There is also some activity on algae as feed. Their focus is mainly on the upstream end (the algal physiology and ecology aspects) but they also look into the production/upscaling topics. The work on algae is related to algae as live feed for rotifers or copods, that in turn is feed for e.g. fish larvae. So indirectly it is fish feed, but they don’t work directly on using algae in production of fish feed. Matilde is also involved in SINTEF, matilde.chauton@sintef.no SINTEF is an independent research organization which consists of several institu-tes, and at SINTEF Fisheries and aquaculture they work on algae within the vision of ”Technology for a better society”. Some of the main focus areas that involve algae are:1. Environmental surveys and monitoring (including primary production and water current transport in mathematical modeling)2. Harmful algae blooms/analyses of phytoplankton composition in water samples3. Microalgae as live feed for rotifers/copepods: species selection, chemical composition of algae and optimization for use as live feed, biomass production4. Biomass production for high value components: species selection, optimization, biomass production technologywww.sintef.no/home/Fisheries-and-Aquaculturewww.sintef.no

19

4. SINTEFSINTEF Fisheries and Aquaculture together with NTNU are representing an unique competence on marine algae and bacteria and on the application of these organisms and their special properties in different systems. By bioprospecting, the work to find organ isms and components with positive effects on health and environment. Trine Galloway (trina.galloway@sintef.no), Jorunn Skjermo (jorunn.skjermo@sintef.no) and Kjell Inge Reitan (kjell.i.reitan@ntnu.no) have been responsible for scientific research projects and programs compromising:• Marinejuveniletechnology• Livefeedformarinelarvae• Strategiesformicrobialcontrol• Marinebiotechnology(http://www.sintef.no/home/Fisheries-and-Aquacul/Marine-Resources-Technology/Marine-aquaculture/)

NFR Project: Potential of overusing microalgae two partially replace fish oil and fish meal in aquaculture fish feeds (ALGAFEED). The aim was to characterize production of lipids and polyunsaturated fatty acids in various microalgae species and at different conditions. Further to characterize the content of carbohydrates, especially -glucan, in different microalgae species and at different conditions, the digestibility of micro algae based feed given to mink (model specie), salmon and cod. Growth effect of micro-algae based feed given to salmon and cod was also studied. Kjell Inge Reitan (kjell.i.reitan@ntnu.no).

5. University of Bergen (UiB)The University of Bergen has supported research in marine science extensively, includ-ing numerous long-term projects. Marine research at UiB covers much more than the traditional disciplines of marine biology and biotechnology. The quality of the marine research being conducted at the University of Bergen has achieved international recog-nition. The close collaboration between industry and university research in aquaculture provided a textbook example of the potential advantages of such an interaction, and made Norway a world leader in aquaculture production. Professor Gjert Knutsen is the initiator of the effort to search for bioactive substances in algae. He does this work with Professor Svein Rune Erga, dr. Siv Kristin Prestegard, PhD students, master students and other employees. A total of twenty people are working with material from the department at the University of Bergen (UiB). Professor Gjert Knutsen’s over 50 years scientific work includes advanced algal physiology, lectures and laboratory experiments on algal biotechnology. His work on microalgae is one of the main references when it comes to marine microalgae knowledge and experience and is often referred to as ”the Bergen School” in the Norwegian micro-algae academic network.

20

6. University of life Sciences (UMB)UMB is recognised as a leading international centre of knowledge, focused on higher education and research within environmental- and biosciences. Scientific institutions suchasAquacultureProteinCenter,BioforskandNofimaarelocatedatUMB-Ås.Nofima (former Akvaforsk) has been and is still a significant contributor to the develop-ment of the aquaculture industry with a special focus on genetics and nutrition aspects. Several microalgae projects are running at UMB, feed for salmon and cod, immune stimulants in feed and hydrogen gas production from microalgae.

Department and Plant and Environmental SciencesProfessorHansR.Gislerød,hans.gislerod@umb.no Gislerødisprofessorofplantscienceswithaspecialityin”Plantgrowthinregulatedclimate” In year 2000 he was asked working on microalgae, in addition to his ordinary position, because it was an increasing demand for PUFA to the Norwegian pond fish industry. In May 2012 we ended one 3 year project with University of Gothenburg and the Danish Schell Fish Centre for production of Flat Oysters where UMB had the responsibility for the microalgae FoU. Further we have at the moment one project on growth of microalgae in waste water together with Biowater and one on production of Hydrogen together with Bioforsk. In this project we are also looking on use of flue gas from some industry plants. On these projects we have engaged one researcher in a 50% position three PhD students, where one is on a Fulbright grant for one year from University of South Florida and one technician. At the moment we are working on establishing a commercial microalgae production with a greenhouse grower.

Department of Animal and Aquacultural Sciences

Aquaculture Protein Centre (APC)APC became one of the first Norwegian Centres of Excellence. APC consists of scien-tistsfromtheNorwegianSchoolofVeterinaryScience(NVH),theNorwegianUni-versity of Life Sciences (UMB) and Nofima. Professor Margreth Øverland margareth.overland@umb.no. Margreth Øverland is a professor in animal nutrition whos interest in microalgae is as an alternative source of omega-3 and protein for fish feed. She have been working with chemical profiling of different microalgae as well as evaluating digestibility of these using both mink as a model animal for fish as well as in Atlantic salmon. She also has interest in looking into processing methods to improve nutrient value of these microalgae and processing techniques to make optimal extruded feed based on these novel ingredients. Furthermore, she plans on evaluating these algae in growth performance trials with salmon, rainbow trout and possibly tilapia. She also has evaluated health beneficial effects of bioactive components present in the microalgae.(http://apc.umb.no/english/).

Bente Ruyter, bente.ruyter@nofima.no is responsible for experiments to find out however fatty acids in certain microalgae are suitable to replace fish oil in feed for salmonids at

21

theAquacultureProteinCentre(APC)andNofima’sresearchstationatSunndalsørainNorway(http://www.nofima.no/en/nyhet/2011/10/tries-out-microalgae-as-fish-oil-replacement-in-salmon-feed).

BioforskBioforsk conducts applied and specifically targeted research linked to multifunctional agriculture and rural development, plant sciences, environmental protection and natural resource management. International collaboration is given high priority. Kari Skjånes (kari.skjanes@bioforsk.no) and Thorsten Heidorn (thorstein.heidorn@bioforsk.no), are work-ing on the use of algae technology for production of biohydrogen from green micro-algae. Céline Rebours (celine.rebours@bioforsk.no) has isolated coldwater microalgae more suitable for hatchery, nursery and on growing for sea urchins and carnivorous fish.

7. University of Oslo (UiO)NorwegianInstituteforwaterResearch(NIVA)wasfoundedin1958,andProfessorOlav M. Skulberg, a Norwegian botanist with freshwater algae as specialty, has been employee since the institution’s inception. Early, after ended studies in Switzerland, he developed a method for testing bio-available plant nutrients and toxicity in water, based on algal cultures – this method has been utilized in many countries. He built up acollectionofalgalculturesatNIVA,whichhasbeenusedinteachingandresearch,and in our time have formed the basis for molecular biological research of internatio-nal interest, particularly in evolutionary biology and toxic algae. Skulberg has authored numerous scientific papers, mainly on algae and their importance in lakes and rivers and his work on microalgae is one of the main references when it comes to microalgae and cyanobacteria knowledge and experience. He is often referred to as ”the Oslo School” in the Norwegian microalgae academic network.

8. University of StavangerProfessorSimonGeirMøllerhasbeenanindependentinvestigatorandresearchgroupleader since 2001 (at the University of Leicester, UK) with over 15 years personal re-search experience in plastid biology and plastid genetic engineering. At the University of StavangerandCentrefororganelleResearch(CoRE)ProfessorMøllerandhislabora-tory have extensive expertise in plastid biology with emphasis on plastid transformation, Fe-S cluster biogenesis and plastid division. The group has attracted research funding of over 19 MNOK from NRC, BBSRC, UFD, The Leverhulme Trust and EMBO; 6.2 MNOK of which towards the Plastid AS project. Since setting up Plastid AS, the team are continuing research into plastid transfor-mation technologies and applications. Current research projects include Norwegian Research Council and own funding within the FUGE (functional genomics) program in fish vaccines and crop research. A key focus area is the production of previously impossible malaria proteins for screening programs (http://www.plastid.no/index.html).

22

9. University of Tromsø (UiT)MabCent (Centre for Marine Bioprospecting) is a centre for research-based innova-tion (SFI) which aim to develop high value marine bioactives and drug discovery based on the screening of extracts from marine organisms in the arctic environment. The combination of low temperatures and other special conditions creates a special marine environment where evolution has brought a lot of life in other directions compared to others. Many organisms have evolved unique characteristics, leading to the possibility of finding bioactive substances with effects.One of the focused items is the ”artic rubisco enzyme” found in cold water algae and which seem to have an higher CO2 absorption in comparison with microalgae from warmer waters. The scheme promotes innovation by supporting long-term research through close cooperation between R&D intensive companies and prominent research institutions. Business partners are Lytix Biopharma AS, Biotec Pharmacon ASA, Pronova Biocare AS and ABC Bioscience AS. The budget is approx. NOK 180 million over eight years. For more information contact: ProfessorTrondE.Jørgensen(trond.jorgensen@uit.no), Professor Hans Chr. Eilertsen (hans.c.eilertsen@uit.no) or Elin Fredriksen (elin.fredriksen@uit.no) at Department of Arctic and Marine Biology, UiT.

SWEDEN1. Chalmers University of Technology, GöteborgThe Department of Chemical and Biological Engineering Eva Albers, albers@chalmers.se Researcher in industrial biotechnology. Has for the last five years build up a group working on algal biotechology that is part of the group of Industrial Biotechnology. Her main research interest is to study metabolism and microbial physiology at all levels for different production organisms, mainly algae and yeast, during standard laboratory conditions as well as conditions relevant for industrial processes. This is achieved by applying a wide range of approaches from classical microbial and biochemical to systems biology and mathematical modeling and collaborations with several researchers at other universities and research institutes.

Ingrid Undeland, undeland@chalmers.se Has for the last three years coordinated a Safefoodera-project, ”Biotransport” with collaborators on Iceland and the University of Ljubljana in Slovenia.Studied the activity in various marine ingredients from ”source to active site”. The ingrediants have been fish-oil, proteinhydrolysate from cod and various extracts from bladderwrack. The latter have been studied from their anti-oxidative properties in a food-model system simulating a fish-product, in an in-vitro anti-oxidating assay and in various cellmodels(caco-2 cells, yeast, livercells).

23

They found that some extracts from bladderwrack had strong anti-oxidating properties. Supervisor of PhD-student Lillie Cavonius.

Lillie Cavonius A PhD-student working on n-3 fatty acids in microalgae. The project she is involved in aims to find new, environmentally friendly extraction methods. As a part of her research she analyze the fatty acid pattern of microalgae (the method could most likely be applied to macroalgae, too). The aims are to get methods for getting oil out of algae, since extraction with hexane needs to be replaced with something more sustainable and environmentally friendly. Recently, she has also begun to apply microscopy techniques (CARS, third harmonic generation) to the microalgae. Perhaps in the future, the intracellular lipid accumulation can be observed in live cells with these techniques.

JennyVeideVilg,jenny.vilg@chalmers.se Postdoctoral researcher. The harvesting step has become an important bottleneck in the production of bio-mass from microalgae, due to the needs for energy-demanding methods for separation of algae from the surrounding water. Flocculation has been described as a putatively efficient means of coarse separation of the algae, but the mechanisms are poorly known and thus, the flocculation becomes unpredictable. My main research in the subgroup of algal biotechnology (lead by Eva Albers) focuses on the molecular mechanisms behind flocculation of marine microalgae, for putative novel solutions of microalgal harvesting. We are currently aiming to investigate extracellular proteins and cell wall proteins involved in flocculation. She is also involved in the start-up of a project on macroalgae culturing, with the aim to produce biomass for industrial applications.

2. kTH, royal Institute of TechnologyJoseph Santhi Pechsiri, pechsiri@kth.se Supervisor: Fredrik Gröndahl Works with microalgae and cyanobacteria, perform assessments often at a systems level on environmental, technical, social, and economical issues. The project aims to perform sustainability assessment of microalgae/cyanobacteria biomanipulative utilization. They look at the potential to use these systems to absorb or concentrate human impacts for further management such that the system acts as a buffer between human impacts and the natural environment while at the same time providing an ecological service in the form of resource provisioning. In order to assess this, they chose the biofuel production system (biogas and biodiesel) from microalgae and cyanobacteria harvests and performs various assessments for potentials on them.

24

Josefine Anfelt, Paul Hudson, Mathias Uhlén, Björn Renberg An increased awareness of the negative environmental impact of greenhouse gases, as well as a need to reduce dependency on fossil fuels, has led to renewed interest in bio-fuels, or fuels produced from microorganisms. A particularly attractive fuel is biobutanol. Butanol has a higher energy content than ethanol, is less hygroscopic, and is compatible with current fuel infrastructure. They aim to introduce a 1-butanol synthesis pathway in the cyanobacterium Synechocystis sp. PCC 6803. This phototrophic organism is a preferred host for biofuel production because it requires only CO2 from the surrounding atmosphere as a carbon source and its prokaryotic nature simplifies genetic modification. Additionally, Synechocystis sp. PCC 6803 naturally produces a butyrate-based polymer in high yields from acetyl CoA. By knocking out a key enzyme in this native pathway and inserting three heterologous enzymes, we will redirect the flux toward 1-butanol synthesis. The heterologous enzymes are encoded on a self-replicating plasmid. The 1-butanol is quantified from culture media using gas chromatography.

3. linnaeus UniversityCatherine Legrand, catherine.legrand@lnu.se The MPEA (Marine Phytoplankton Ecology and Applications) is based within the School of Natural Sciences at Linnaeus University in Kalmar. Their research team deals with marine phytoplankton ecology and the role of bio- and chemical interactions among marine microbes in shaping plankton food webs. Another part of the research deals with phytoplankton products with a potential economical impact in e.g. renewable energy resources and food science.• Algalmetabolites(production,interactionswithmicrobialcommunities)• Algalproductivity(seasonalvariation,lipidandfattyacidsprofiles,scalingup, integration of waste water recycling and industrial fluegas)• Potentialuseofalgaeforbioenergy(biogas,biodiesels)• Integrationofalgalfarminginurbanlandscape

4. Mälardalen UniversityEmma Nehrenheim, emma.nehrenheim@mdh.se Research interest are within: Nutrient and carbon transformations in algae cultivation for biogas digestions pusposes. Recycling to arable land.

5. Nordic Microalgae, www.nordicmicroalgae.orgSMHI, Malin Mohlin, malin.mohlin@smhi.seThe website is a source of information on microalgae and related organisms in the Nordic area, i.e. the Baltic Sea, the North East Atlantic and lakes, rivers and streams in the area. This site is of use for science, education, environmental monitoring etc. The content of the site is mainly supplied by the users. The site provides, among others, a forum in which questions regarding microalgae and speciation can be posted.

25

6. SP BoråsAt SP they do research within and develop among others;• Newcultivationfacilities• Developsensor-techniquestocontrollargealgae-facilities• Harvestingtechniquesandrefining• Tryoutdifferentspecies• Designbiofuelsbasedonalgae• Newmaterialsfromalgae• Chemicalsfromalgae

SP have two focuses for the algal biomass, which are special chemicals and biofuel.They can also offer full characterisation of algal biomass through their well equipped labs. They culture algae on different scales, from 2-5L in the lab, 2500 L in outdoor facili-ties and plan to build two larger raceways at a pulp mill covering 500 m2. They have two outdoor facilities at the moment but plan to expand to 20. Sensors are used to control the facilities when they are scaled up. Today you can get high produc-tion in the lab which decreases markedly when scaled up outdoors.The algae will have an abundance of nutrients initially, which will decrease with high cell densities to make them produce fat. Without this control of the biomass, the productivity will be very low. The sensors are so called optical noses and tongues (own technique/several publications yearly) which controls pH, O2, nutrients and growth using light-signals. They currently work with 16 species of algae, 10 freshwater and 6 marine of which some will be used in the larger facilities. They have not yet produced biofuel but have developed a patented and partly tested new diesel designed for algae, which has unique properties. They also produce algal pellets.

7. Swedish University of Agricultural Sciences, UmeåFrancesco Gentili, francesco.gentili@slu.se Culture algae in various effluents(municipal and industrial) to:• Purifythewater• Reducetheemissionofcarbondioxide,bybubblinggasesthroughanalgaeculture• ProducevaluablebiomassThey culture their algae both in a lab and a combined heat and powerplant they built on their roof.

8. Uppsala UniversityDepartment of Photochemistry & Molecular Science.Peter Lindblad, peter.lindblad@fotomol.uu.se Works with conversion of solar energy into a biofuel, focusing on microalgal based H2-production/hydrogenases at applied, physiological, biochemical and molecular levels.

26

Different molecular and genetic techniques are used to address transcriptional regulation and regulatory mechanisms. In the last year he and his research group has developed a strong interest for synthetic biology and the possibilities to custom design and engineer microbial cells to carry out novel pathways and functions. Subsequent activities include proteomic and metabolomics (systems biology) analyses of the constructed cells, fol-lowed by further (re)design and re-engineering.

2C. Microalgae Cultivation as Feed in Aquaculture(Several Marine Fry and Bivalve Hatcheries)

A significant contribution to the emerging knowledge and experience on microalgae cultivation may be addressed to the focus on bringing in new marine species (halibut, turbot, sea bass, sea bream, cod, crustaceans and bivalves) to the aquaculture industry. Microalgae are used in both the production and enrichment of live feed (rotifers, Artemia etc) and directly to the larvae as ”green water”. Proper use of microalgae in the first feeding stage contributes to an improved survival, growth and quality of fry produc-tion. Microalgae enhances the microbial environment, contributes to immune stimulants, stabilize the nutritional value of live food and stimulate the digestive process in fish larvae. Proper use of microalgae provides a safer production. The microalgae production has been limited to a few species such as: Chlorella sp, Isochrysis galbana, Pavlova lutheri, Nannochloropsis oculata and N. gaditana, Dunaliella tertiolecta and Tetraselmis suecica. These species have been selected on the basis of their size, nutritional value, culture easiness and absence of negative side effects, such as toxicity. Their nutritional value shows a great variability not only among different species, but also in genetically different populations of the same species (strains). Microalgae for halibut and turbot reproduction dominated the 80-ties and 90-ties while cod, scallop and oyster reproduction have been the main species later on. Cod farming industry was growing until its collapse in 2009 and there were about 24 small and medium size cod hatcheries consuming around 90 thousands liters of Chlorella sp and about 3 thousands liters of Nannochloropsis oculata on its peak. During the 80-ties and 90-ties, while halibut was focused as new specie, every hatchery had their own microalgae department producing the necessary biomass. The cod farming industry had a higher microalgae biomass requirement and tended to import frozen and live biomass from Asia (Chlorella sp) and USA (Nannochloropsis oculata). This turned out to be a business in which a Norwegian company MicroAlgae AS started to trade imported algae biomass into the cod hatcheries (http://www.micro-algae.no/). Other companies, such as Algaetech Industries AS and MicroA AS, started to plan production of wet, live biomass to supply the growing cod farming industry. After the collapse in 2009, there were only about 3 or 4 cod hatcheries left. University of Bergen and the Institute of Marine Research together with the Norwegian University

27

ofScienceandTechnologyandSINTEFaswellasUniversityofTromsøandUniversityof Life Sciences and NOFIMA have been the main contributors of the mass production of microalgae knowledge and experience in the Norwegian aquaculture.

2D. Industrial Microalgal Activity in the Nordic Countries

1. Astareal AB (former Bioreal AB)ÅkeLignell,ake.lignell@astareal.se The company was founded 25 years ago in Uppsala and is today owned by Fuji Chemical Industry CO, Japan. AstaReal is a research based biotech company, dedicated to the production, research and marketing of natural astaxanthin. They were the first to produce natural astaxanthin commercially from the microalgae Haematococcus pluviailis. They have developed a unique cultivation method to yield the highest and purest form available of natural astaxanthin and offer both bulk ingredients for use in feed, food and dietary supplements and retail products based on natural astaxanthin.www.bioreal.se

2. Algalif AS This a Norwegian company planning large scale microalgae production in Norway and Iceland. They combine their experience on horticultural light (Gavita AS) with the development of photobioreactor (PBR) technology. www.algalif.com

3. Algro Freberg Arnstein Freberg established a pilot PBR production in a greenhouse in Lena in Oppland county in order to run R&D tasks. This establishment is based on his expe-rience from microalgae biomass production studies in the vertical tubular PBR Biofence systemattheUniversityofLifeSciences(UMB)togetherwithprof.HansR.Gislerød.

4. BM Energy Group and AstaNovo AS BM Energy Group and AstaNovo AS have been focusing in large scale production of Haematococcus pluviailis, however, today they have turned the focus on algal EPA and DHA production. http://www.bmeg.no/index.html and http://www.astanovo.com/)

5. CO2BIO CO2BIO is an innovation network of participants from industry and research. The network is organized as a company where Salmon Group, Grieg Seafood, EWOS, BTO and NHIL are shareholders. CO2BIO AS was established in 2011. The company’s objective is to develop new profitable business on the basis of available CO2 capture at Mongstad. The first goal to establish a national pilot plant for the production of Omega-3 rich algae biomass and to conduct research projects in order to develop the entire value chain. The experience from the pilot phase may trigger the creation of large-

28

scale production at Mongstad. The pilot plant is scheduled for completion in 2013, the estimated cost is probably 11 mill. http://co2bio.no/

6. MicroA ASMicroA was established in 2007 by local entrepreneurs and investors with the purpose of producing “microalgaepaste” (lived feed) for the cod juveniles farming industry in Norway. MicroA decided to end this project in 2009 due to the market collapse. The MicroA’s previous patented photobioreactor was quite small (60-70 litre volume) and had technical limitations with regard to scalability. This project gave MicroA valuable experience in cultivation and harvesting of microalgae and led to the best “algae match” for rotifer production. MicroA made a new invention in 2009 showing promising results with regards to scaling up algae production. Administration and laboratory facilities are located in Tananger and temporary greenhouse is installed at Sola. www.microa.no

7. Promar ASPromar AS was established in year 2000 to pursue Intravision’s research on a production technology for microalgae. Using narrow bandwidth light in a reactor designed for efficient light transfer and optimal growth conditions, Promar AS will deliver micro-algae-based high value compounds to a variety of market segments.http://www.intravision.no/pages/promar_about.asp?nr=59).

8. Simris AlgSimris Alg AB is a Swedish company establishing a large scale greenhouse plant for microalgae cultivation from which they intend to develop unique health products, food and feed supplements. The company is located in sunny and marine area at Hammenhög Österlen. http://simrisalg.se

The photo shows the projected greenhouse installation at the Hammenhög Frö’s facilities. The algae facilities will consist of 2000 square meter greenhouse and the warehouse of another 700 square meters will house new laboratory. Products from the algae facility, such as omega-3, are predicted to be available from 2013.

29

9. StatoilBørreToreBørresen,btbo@statoil.comMicroalgae: Cultivation and processing of wild grown algae, typically algae which grow attached to surfaces. Collaboration with US partners, like College of William and Mary andVirginiaInstituteofMarineSciencesandUniversityofArkansas.Macroalgae: Exploitation of the use of seaweed as a feedstock for biofuel production. Collaboration with Bio Architecture labs (US).

2E. Industrial Microalgal Activity Operating Outside Nordic Countries

1. MicroAlgae ASMicroAlgae is specialized in the supply of live and frozen microalgae biomass and technicalequipmenttothefishfarmingindustryandrepresentsReedMariculture,YSIand Aquatic Ecosystems Inc in Norway. After the collapse of the cod farming industry they turned to be a supplier of equipment and instruments concerning water quality and oxygenation. http://www.microalgae.no/

2. Sahara Forest ProjectThe Sahara Forest Project has a vision of creating re-vegetation and green jobs through profitable production of food, water, clean electricity and biomass in desert areas. This is done by combining already existing and proven environmental technologies, such as evaporation of seawater to create cooling and distilled fresh water (i.e. in a saltwater based greenhouse) and solar thermal technologies. In this way The Sahara Forest Project is designed to utilize what we have enough of to produce what we need more of, using deserts, saltwater and CO2 to produce food, water and energy.http://saharaforestproject.com/ and http://bellona.no/

30

31

This diversity makes microalgae a potentially rich source of a vast array of chemical products with applications in the feed, food, cosmetic, pharmaceutical and even fuel industries. Microalgae can either be autotrophic or heterotrophic; the former require only inorganic compounds such as CO2, salts and a light energy source for growth; while the latter are non-photosynthetic therefore require an external source of organic compounds as well as nutrients as an energy source. Some photosynthetic microalgae are mixotrophic, i.e. they have the ability to both perform photosynthesis and acquire exogenous organic nutrients. Algal cultures consist of a single or several specific strains optimized for producing the desired product. Out of an estimated number of 50.000 microalgae species, only 10 are commercially produced at the moment (Spirulina, Crypthecodinium cohnii, Chlorella, Dunaliella salina, Ulkenia sp., Haematococcus pluvialis, Schizochytrium, Aphanizomenon flos-aquae, Euglena and Odontella aurita). In terms of volume, the three species Chlorella, Spirulina and Cryptecodinium are contributing to the biggest volumes. They are used as a whole without transformation or are used to produce extracts of interest. About half of microalgae productions are dedicated to products with whole microalgae and the other half to production of extracts. The estimated market value is about 600 million Euro in 2010. Three main extracts come from microalgae: carotenoids, phycobiliproteins and anti-oxidants. Main microalgae market applications are: human (74%) and animal nutrition (25%), cosmetics and research. There are more than 400 players involved in the microalgae business or in microalgae research and development, according to CBDM.T Market and Business Intelligence analysis. Approximately 75.2% of them are public or private companies and 18.6% are R&D institutions. Due to dynamic financing of companies dedicated to 3rd genera-tion biofuel (biofuel from microalgae) and to the development of genetic engineering technologies, this number is expecting to grow steadily. The microalgae market is very dynamic. The vitamin producer DSM acquired the algae extracted omega-3-fatty acid DHA producer Martek Bioscience for US $1 billion. Algatechnologies in Israel, the leading producer of natural astaxanthin for nutraceuti-cals and food applications, has announced it is expanding the production capacity of its AstaPure™ brand. Solazyme has made a joint venture with Sephora cosmetics and also

3. Global Microalgae Market Segments and Potentials

32

TAxON PRODUCT APPLICATIONESTIMATED PRODUCTION T/A

CHLORELLA VULGARIS Biomass extractsHealth food, food sup-plement, feed, cosmetics

2000

SPIRULINA PLATENSIS Phycocyanin biomass, extracts

Health food, functional food

3000

DUNALIELLA SALINA Carotenoids, -carotene

Health food, food sup-plement, feed, cosmetics

1200

NOSTOC FUSIFORME Biomass Health food 600

APHANIzOMENON FLOS-AqUAE Biomass Health food 500

HAEMATOCOCCUS PLUVIALISCarotenoids astaxanthin

Pharmaceuticals feed additives, aquaculture

50

ODONTELLA AURITA EPA, biomass Cosmetics, food 20

SCHIzOCHYTRIUM DHA Baby food

ULKENIA DHA Baby food

SCELETENOMA Life biomass Aquaculture

NITzSCHIA/ NAVICULA Life biomass Aquaculture

ISOCHRYSIS GALBANA Life biomass,fatty acids Aquaculture, animal nutrition

NANNOCHLOROPSIS Life biomass Aquaculture

a joint venture with Roquette, a French family group enterprise producing microalgae in huge closed photobioreactors inside greenhouses in Klötze, Germany. Avesthagen Ltd, India’s leading integrated healthcare company, has patented a vegetarian DHA (AvestaDHA™) developed from the microalgae Schizochytrium limacinum SC-1 strain found in the Indian Ocean. They have started the commercial production of superior quality of 100% vegetarian DHA and will address the global market needs of DHA which is growing substantially.

Table: After Pulz 2009.

33

Global Microalgae Production

Animal nutrition market is also very dynamic. Alltech, one of the global leaders in the animal health and nutrition industry, acquired the Martek algae facilities in 2010 for $14 million and since then renovated these production facilities to be one of the largest algae production sites in the world. Alltech Algae is now going to produce 3rd genera-tion biodiesel from microalgae and some animal nutrition ingredients and human nutrition ingredients as well. The main market driver at the moment is the switch from chemical to natural ingredients. Examples of this are the increasing production of natural astaxanthin compared to the earlier total dominans of chemical astaxanthin from DSM (former Hoffmann LaRoche) and Nestle’s promotion on phycocyanin from Spirulina in the video ”Blue smarties commercial”. There are four main application segments under development: energy, biogas, envi-ronmental applications and pharmacy. More than 70 companies are working on energy which mainly are at R&D stage, and consequently there are not really a market yet. Big investments have been done, about $1.5 billion until 2008.

COUNTRY COMPANY ALGA PRODUCT EFFECTS ON

USA Martek Crypthecodinium DHA Brain development

Israel Algatechnologies Haematococcus Astaxanthin Immune system

Canada Oceannutrition Chlorella Carbohydrate Extract Immune system

Germany Salata Cyanos Cosmetic ingredients Skin health

France Dior Odontella EPA Anti-inflammatoric

Austria Panmol/Madaus Spirulina Vit. B12 Immune system

Germany Nutrinova Uklaria DHABrain, heart, mental disorder

USA Gates Foundation Kappaphycus Carrageenan Anti-HIV, biocide

USA R&D Lobophora Macrolides Anti-fungal

UK BSV Rhodophyta BiomassIrritable Bowel S. Candidiasis

Denmark Danisco MacroalgaHOx (Hexose Oxidase)

Antioxidant

Table: After Pulz 2009.

34

Recent Development in Health Product Ingredient

Table: After Pulz 2009.

PRODUCT US $ KG-1 MARKET SIzE US $ *106

BIOMASS Health food 10 - 80 1. 100

Functional food 25 – 52 Growing

Feed additive 10 – 130 Fast growing

Aquaculture 50 – 150 Fast growing

Soil conditioner >10 Promising

PIGMENTS Astaxanthin 2.500 – 8.000 >250

ANTIOxIDANTS Beta-carotene >750 >25

Superoxide dismutase >1.000 Promising

Tocopherol 30 – 40 Stagnant

AO-extract 20 – 45 12 – 20

ARA 50

EPA 300

DHA 250

PUFA-extracts 30 – 80 10

SPECIAL PRODUCTS Toxins 1 – 3

Isotopes >5

Sapphire Energy’s Green Crude Farm in Luna County, New Mexico, was recently com-pleted. Construction of the first phase, consisting of 48 small 4.450 square meter ponds and 20 big 8.900 square meter ponds, which began on June 1, 2011, was complet ed on time and on budget. The farm has already produced 81 tons of algae biomass to date. The complete farm will consist of about 121 ha (1.21 million square meters) includ ing algae cultivation ponds and processing facilities and producing about 100 barrels of oil per day in 2014 and 6.700 barrels per day in 2018, according to Sapphire Energy. The company has raised totally $300 million in private and public funds in which includes investors as Bill Gates.

35

Marked Estimation for Microalgal Products

Figure: Left photo shows the aerial view of the farm in August 2012. Due to traditional crop rotation, only half of the small ponds and one of the big ponds are producing. The right photo shows the crude biomass. Photos: Sapphire Energy.

Figure: Aurora Algae ponds in Karratha, Australia.http://www.algaeindustrymagazine.com/aurora-algaes-matt-caspari-on-growing-algae-in-australia/

36

The former director and main scientist of Sapphire Energy Inc., Miguel Olaizola, now director of Production R&D in Synthetic Genomics, says that the impact of the huge quantities of feed ingredients as residues from their biofuel production when coming into the animal feed market, will significantly affect the animal feed prices. He is cur-rently responsible for scaling up of algal production for biofuel, food and feed applica-tions in the company. Aurora Algae has opened its demonstration scale project in Karratha, Western Australia. The farm is consisting of 6 ponds, 0.4 ha each one where they consistently are producing 12 to 15 metric tons of algal biomass per month. A full-scale commer-cial facility in nearby Maitland is planned for 2014 which initially will consist of more than 100 ha of algae ponds, capable of producing up to 600 metric tons of biomass per month, and scalable to more than 2.000 ha. Aurora Algae produce the omega-3-fatty acid EPA from the microalgae Nannochloropsis sp. Anaerobic digestion of algae biomass to produce biogas is an alternative to lipid extraction for transportation fuel. Waste-grown microalgae are a potentially important biomass for biofuel and biogas production but this is still at R&D stage. Environmen-tal applications such as CO2 capture, waste water treatment and soil detoxification and improvement is also at R&D stage. But pharmacy product applications are entering the market. The biopharmaceutical company Algenics SAS in Nantes, France is using a microalgae-based technology to produce recombinant therapeutics for animal and human health. They are producing glycosylated therapeutics with preferential applica-tions in the field of monoclonal antibodies and viral subunits. There are some companies dedicated to screen the diversity to IPI so active pharma-ceutical ingredients and also other ingredients for instant cosmetically ingredients can be encountered.

Fresh or Frozen Algae BiomassThere is a new trend on new immune health functional food products, particularly pro-biotics. The fresh or frozen biomass could sort under this market. According to market

Table: After Pulz 2009.

TAxON MAIN ACTIVE AGENT INDICATION AREA PHASE OF CLINICAL TRIAL

Lyngbya majuscula(Bluegreen alga)

Curacin Cancer II

Nostoc sp. (Bluegreen alga) Cryptophycin Cancer I

Prorocentrum lima(Dinoflagellate)

Ocadaic acid Cancer II

Alexandrium sp. (dinoflagellate) Saxitoxin Analgesy I / II

37

Pharmaceutical Ingredients from Microalgae

researcher Packaged Facts, the global retail market for probiotic and prebiotic foods and beverages was US $15 billion in 2008, a 13% increase over 2007, with an estimated market of more than US $22 billion by 2013. The global nutraceuticals market is estimated at about US $151 billion in 2011. By 2016, it is estimated to reach nearly US $207 billion, a projected compound annual growth rate (CAGR) of 6.5% between 2011 and 2016. Functional beverages market is expected to experience the highest growth, at a compound annual growth rate (CAGR) of 8.8% during the 5-year period from 2011 to 2016. Nutraceutical food market is the second largest market, generating an estimated US $49 billion in 2011. This should reach US $67 billion in 2016, for a CAGR of 6.4%.

Algae Oil and Omega-3 Fatty AcidsTraditionally, omega-3 oils have been extracted from wild caught fish, but algae are the originating source of EPA and DHA in fish and krill, which obtain these fatty acids by eating algae. The total costs of producing omega-3 fatty acids from microalgae are higher compared to fish, simply due to the cultivation costs and the harvest costs of the low density microalgae biomass from the cultivation medium. The availability of algal oil is still very restricted and, so far, the retail market is more relevant than the bulk market. The retail market pays a higher price for algal omega-3 since it is a vegetable source and has not been in contact with industrial pollution.

38

World Fish Oil Production and Use

Figure: After MareLife algae seminar. Source: Ewos innovation, production: FAO.

Actually, there is moreover a lack of omega-3 products in the market than a real com-petition. The global omega-3 market’s increasing demand is leading to depleting of fish stocks and cultivated microalgae biomass is expected to be one of the future sources of omega-3. The market for omega-3 ingredients have been growing between 10 and 18 per cent across different regions in the globe, and marine source omega-3 ingredients contribute to 90% of the estimated revenues of US $1.5 billion globally in 2010. Replac ing fish oil (approx. 1 million tons a year) by algal products completely would require an annual production of 2.5-3.5 million tons of algae. Europe is expected to show a greater acceptance of algal oils in the near future and grows faster than North America, where algal oils are well established. Globally, the average price of algae omega-3 oil is US $140 per kilo. According to data from the International Fishmeal and Fish Oil Organization (IFFO), the price of fish oil rose from US $800 per metric ton in February 2007 to US $2.200 per metric ton in February 2008. This fish oil price follows the vegetable oil prices and this explains why there was a peak in 2008.

International market price for fish oil and fish meal (monthly average, 64/65% crude protein), any origin, wholesale, CIF Hamburg (US $ per tonne: Helga Josupeit, FAO, GLOBEFISH Database – personal communication, May 2008)

http://www.sciencedirect.com/science/article/pii/S004484860800567X

Fish oil prices averaged US $1.696 (€1.212) per metric ton between January and March 2011 – double the value from a year ago, Corporación Pesquera Inca (Copeinca) said in its annual report. The spike was biggest for oil destined for human consumption, with contain higher levels of omega-3. There, prices have reached levels of US $2.200 (€1.572) per metric ton, Copeinca CEO Samuel Dyer Coriat told IntraFish. This is due to a shortage of supply of this type of oil, he said. However, the picture is different when it comes to fish oil for aquaculture. There, prices have fallen to around US $1.200 (€857.6) per metric ton, Dyer Coriat said. Austevoll, the Norwegian fishing group with activities in Chile and Peru, also said fish oil prices had fallen after the heights reached earlier this year. “After a rising trend in the first part of the quarter, fish oil prices have now fallen slightly as expected,” Austevoll said in its quarterly report. Capsules of

39

International Market Price for Fish Oil and Fish Meal

omega-3 EPA/Capsules of omega-3 EPA/DHA from fish oil are available at internet for US $350-875 per kg while capsules of omega-3 EPA/DHA from algae oil are available at internet for US $1.900-2.500 per kg. Present worldwide annual demand for eicosapentaenoic acid (EPA) is claimed to be about 300 metric tons production from Phaeodactylum cornutum, which contains about 2% eicosapentaenoic acid would require production from 15.000 t of algal biomass. The DSM owned company Martek produce the omega-3 fatty acid DHA from hetero-trophic cultured algae Schizochytrium. Martek had a net sale of US $450 million in 2010 and just US $17.05 million were sales to food and beverage customers. The main part was sold to the infant formula makers and dietary supplements trade. The Martek IPI on DHA from microalgae has prevented other companies to enter this business, such as the Swiss chemical group Lonza which aquired the Nutrinova’s DHA business in 2005, was forbidden from selling any products that infringes Martek’s omega-3 patents. Nevertheless, Martek’s patent protection on its algae-based DHA for infant formula began to expire in 2011 and virtually runs out in 2014, both in Europe and in the U.S Many players waiting to enter the market for algal omega-3 Ingredients, have based their hopes on Martek’s patent portfolio expiry, but technology has been the driving force that kept Martek competitive as an omega-3 Ingredient manufacturer. DSM’s ex-pertise in the field of nutritional ingredients, their positioning as a single stop supplier of key functional ingredients and greater ability to offer technical support are advantages that clients will consider when signing on. While Martek derives only around $83 million as a Food & Beverage Ingredient from omega-3 in North America, Pronova Biopharma, the largest company in this space in NA, got approxi mately $175 million in revenues from omega-3 Ingredients. Most companies are pure play omega-3 manufacturers, even though they operate across many application segments, but Cognis (BASF) and Martek (DSM) are currently the only two companies which have the significant backing of global ingredient players. While Cognis has only marine source omega-3, Martek adds to DSM’s existing vegetable and marine source omega-3 Ingredients. With the acquisi-tions, Cognis & Martek have gained significant increase in access to markets and R&D focus that could push smaller players out of the market for omega-3 Ingredients.

REGIONMARINE %Revenue

ALGAL %Revenue

GROWTH TOTAL %Revenue

GROWTH MARINE %Revenue

GROWTH ALGAL %Revenue

NA 85% 15% 13.9 13.4 11.5

EU 93% 7% 10.2 9.7 16.5

APAC 90% 10% 18.2 17.6 16.5

Table: Growth patterns snapshots of marine and algal omega-3 ingredients in different regions of the world in 2010.

40

Marine and Algal Omega-3 Ingredients in Different Regions

However, new algal players are entering the market - among them, Algae Biosciences Inc. (Scottsdale, AZ), Aurora Algae Inc. (Hayward, CA), Lonza (Allendale, NJ), and Source-Omega LLC (Chapel Hill, NC). Suppliers differ in many ways, including their algal strains, subsequent fatty acid profiles, and growing processes. Unlike the heterotrophic process of growing microalgae as Martek does, BioProcess Algae cultivates algae via autotrophic process in biofilms exposed to light and uses waste heat and carbon dioxide from ethanol factory. (http://www.bioprocessalgae.com)

Bioprocess Algae’s Attached Growth system in Shenandoah, Iowahttp://www.algaeindustrymagazine.com/aim-interview-bioprocess-algae-ceo-tim-burns/

The omega-3 ingredient market from algae is estimated to $300 million. Future recommended dietary reference intakes or recommended daily intakes of omega-3 LC-PUFA for the general population could average 650 mg per day per capita. For the total US population of more than 281 million, the above recommendation would require about 222.556 ton per year of FGFO, equivalent to about 296.741 ton per year of CFO (Crude Fish Oil). If the entire global population of about 7 billion should follow these recommendations, there will be a need of 7.39 tons of CFO or more than 7 times of today’s production.

41

-glucansThe global -glucan market is emerging and still limited today, as -glucan have only been marketed as specific ingredients for 10 or 15 years. However it has great potential, and is likely to grow in the future, especially as far as animal food industry is concerned. Since -glucan from marine diatoms is indicated to be a strong BMR, and will compete against -glucan from baker’s yeast in the nutraceutical and pharmaceutical market. Established industrial manufacturers of -glucan derived from baker’s yeast for medical care are:Biothera (USA)Immunocorp (USA)MSD (Merck Sharp & Dohme – USA)Eli Lilly (USA)

The US -glucan market holds significant growth potential with expected annual growth rates of 10-15% for the following years. The market for -glucan ingredients has an estimated value of US $80-100 million, according to Steen Andersen, Fluxome CEO. -glucan extracted from the mushroom shiitake (Shanghai, China) is available at internet for US $40-100 per kg while gelatine capsules with -glucan from yeast are available at internet for US $1.660-3.900 per kg. BioCAP, a Swiss manufacturing company producing glucan, has made a business plan where the price of between US $110-166 per kg is mentioned.

Immune Health MarketThe Asia Pacific immune health ingredients market which is further divided into five subsegmentsincluding:yeastbetaglucan,VitaminC,probioticcultures,prebioticsandmedicinal mushroom ingredients was valuated to US $958.2 million in 2009. Due to frequent outbreaks of diseases such as severe acute respiratory syndrome (SARS), bird flu and swine flu coupled with a higher per cent of the ageing population (having lower immunity), this market is expected to grow to US $1.46 billion in 2016.

The Global Market of Feed AdditivesThe global animal feed production in 2012 is dominated by China (175.400 million metric tons), Brazil (164.920 million metric tons) and USA (59.629 million metric tons). The global market value of feed additives was US $16.1 billion in 2010 and is expected to grow to US $27.6 billion in 2017 at an estimated annual growth rate (CAGR) of 8.1% from 2010 to 2017, according to the BCC Research. Estimates in the latest Markets and Markets report shows that the feed additives market will reach $18.7 billion in 2016. According to ”Global Animal Feed Additives by Type, Livestock, Geography, Regulations Trends & Forecasts (2009-2016)”, the Asian market, a driving sales force, will hold 28.5% of the global market share in 2016. Increasing demand for meat products in the region and rising domestic meat production are both expected to contribute to the area’s growth. Europe is currently the leading market for feed additives,

42

Table: After Global Feed Summary 2012 (Alltech).

Figure: After Global feed summary 2012 (Alltech).

43

COUNTRY POULTRY RUMINANT PIG AqUA OTHER AqUA

Asia 116.00 80.12 81.00 24.50 4.03 24.50

EuropeEU27 & Non-EU Europe and former Soviet Union

67.96 55.76 61.90 1.72 7.80 1.72

N AmericaUS & Canada

91.07 45.5 31.23 0.286 17.09 0.286

Middle East/Africa 27.71 17.04 0.87 0.60 0.72 0.60

Latin America 71.26 22.34 24.80 1.88 4.46 1.88

Others 4.60 3.49 2.00 .20 .86 .20

Total 378.6 224.3 200.7 29.7 35.0 29.7

* Other includes Horse (9.24M) and Pets (25.6M)

Global Feed Tonnage by Species

Global Feed Tonnage % by Species

26%

3% 4%

23%

44%

Pig

Poultry

Ruminant

Aqua

Other

with a 35% share in 2011 resulting from regulatory concerns and increasing per capita meat consumption. North America is the second largest market as of 2011, with a share of 28%; the US is the largest market with a share of more than 80%, according to the report. According to the BCC Research report, amino acids are by far the largest feed additive group. This market segment is expected to rise at a CAGR of 10.2% and reach US $18.8 billion by 2017, up from US $9.6 billion in 2010. Vitaminsrepresentthesecond-largestingredientgroupafteraminoacids,withatotalmarket value of US $2.9 billion in 2010. This segment is expected to grow to US $3.8 billion by 2017, increasing at a CAGR of 4.2%.

Figure: Global market value of feed additives by region, 2010 (BCC Research).

44

Table: After Global Feed Summary 2012 (Alltech).

Asia 305 Million

Europe* 200 Million

North America 185 Million

Latin America 125 Million

Middel East/Africa 47 Million

Other 11 Million

* Europe = EU27 & Non Europe former Soviet Union

Global Feed Tonnage by Region

Global Market Value of Feed Additives by Region

Latin America12%

Asia Ex. China11%

North America21%

Europe26%

China22%

ROW8%

45

CONCLUSIONS AND TRENDS ON ALGAE

A large number of academic and industrial players are active on the international algal stage. Nations which have a long-established history of expertise for macroalgae – chiefly in applications for food, fertilisers, alginates, and pharmaceuticals – include China, Japan, the Philippines, Korea, Indonesia, Chile, and in Europe coastal countries such as France, the UK, Norway and Portugal. For microalgae, the US (with its Aquatic Species Programme, as well as pioneer-ing nutraceutical companies), Australia, Israel, Japan, China, Taiwan and several EU countries have well established capabilities, again chiefly in high value applications such as nutraceuticals. The more recent biofuels boom has had a large influence, especially in the US and the BRIC countries (Brazil, Russia, India and China); considerable funding has been invested there. The advantages of algae – no need for arable land or freshwater to produce the crop, and the possibility to boost yields with CO2 from flue gasses, to name but a few – are intuitive and attract investors’ attention. The difficulties of producing algal fuels at scale – including: the energy burden for mixing, harvesting and processing; culture collapse and contamination /grazer control – are much less intuitive, but have proved very hard to overcome. To attract funding, a significant number of the new companies that have been formed make unrealistic claims about productivities and profits; however, this threatens the credibility of the field in general. In addition, the collapse of many new companies, including the high-profile MIT- spin-out GreenFuel Technologies Corporation in 2009, has led to more caution.

4. Analysis on How the Nordic Countries Best Can Capitalise on its Strengths in the Light of Current and Emerging Oppor tunities for Algal R&D, and in the Context of International Competition

46

Internationally, recognition is growing that the pursuit of algae only for bioenergy will make successful commercialisation very difficult; the general trend is towards integrative solutions that make use of the protein fraction for food and/or feed as well as the oil fraction for fuel. This is also shown by the priorities of the Algal Innovation Centres such as AlgaePARC (Wageningen, The Netherlands), Estación Experimental delaFundaciónCajamar(Almeria,Spain),CEVA–Centred’EtudeetdeValorisationdes Algues (Pleubian, France), MBL – Microalgal Biotechnology Laboratory (Beer Sheva, Israel), SD-CAB – Center for Algae Biotechnology (San Diego, California, USA), AzCATI – Arizona Center for Algae Technology and Innovation (Mesa, Arizona, USA), PRAJ-Matrix – The Innovation Center (Pune, India), CABS – Center for Advanced Biofuel Systems (Saint Louis, Missouri, USA), EBTIPLC Biofuel Research & Development Centre (Coimbatore, Tamilnadu, India); all of them are interested in a range of algal products and processes, rather than on algal biofuels only. There is also an increasing trend to exploit algae as an industrial biotechnology platform; international leaders are the US, Israel, and the EU, although BRIC countries are catching up rapidly.

HOW CAN THE NORDIC COUNTRIES BEST CAPITALISE ON ITS STRENGTHS IN THE LIGHT OF CURRENT AND EMERGING OPPORTUNITIES FOR ALGAL R&D, AND IN THE CONTExT OF THE INTERNATIONAL COMPETITION?

Based on the analyses, there are 25 universities and R&Ds working on algal topics while only 7 companies are working on commercial algae projects in the Nordic countries. Academia in the Nordic countries has great expertise in the environmental and ecological sectors for both microalgae, especially (but not exclusively) in the marine sector, however there is not yet any great business activity related to algae. The Nordic countries are world leaders in aquaculture and omega-3 industry in which are suffering from shortage of ingredient source due to the wild fish stock depletion. For the Nordic countries, owing to the climate conditions, topography and land availability, producing algal biofuels at appreciable scale is only realistic if they are grown at sea. A further opportunity for the Nordic countries lies in using its R&D excellence to develop IP that can be applied in places more suited to large-scale algal production. Successful operations in microalgae will always have to take the regional para meters into account and use them to their benefit. The Nordic countries do not have large desert areas with abundant sunlight all year round, which generally might be considered the ideal conditions for growing algae. However, the Nordic countries have a mode-rate climate with less need for cooling, significantly extended hours of daylight in the growing season, lots of water, great industrial waste streams for growing algae (CO2, nutrients and heat), a world-class process industry, and a general aptitude for new and green technologies and building great companies. Also, sun conditions and the

47

Photosynthetically Active Radiation (PAR) levels are much better in certain regions in Sweden than for example in Germany or the Netherlands, where successful commer-cial algae operations already are in place. Then, the most suitable method of large-scale microalgae production in the Nordic countries will be closed-system photobioreactors (PBRs) in greenhouses with controlled climate and light conditions.

Beneficial Sunlight Conditions in the Nordic CountriesIn general, the sun is quite an unstable and unpredictable quantitative energy source for cultivating phototrophic microalgae, and this makes the cultivation of microalgae challenging. On sunny days, the microalgae may reduce or stop the photosynthesis (photoinhibition) due to high irradiance levels. To avoid photoinhibition, the production facilities should be protected from such high sunlight exposure, and in addition keeping the cultivation units at high biomass densities to avoid light penetrating because of cell shading. On sunny days in an open production system, evaporation is the challenge and water has to be refilled to maintain the production medium, whilst in closed production systems, the overheating is the problem and the PBRs need to be cooled. The Nordic sunlight is less intensive and consequently bringing less problems with over-heating compared to latitudes more south. At high latitudes, the solar angle is low, and solar light capture could be more effec-tive by keeping the PBRs at an optimal angel to the sun. The project Solar Power Plants in the North, leaded by Tobias Boström (tobias@norut.no) at Norut, is demonstrating that a solar tracking system could be 50% more efficient than static panels at high latitudes. Such research results might be interesting to convert into the adaptation and management of PBRs in the Nordic countries and could be a topic of research in PBR engineering. The adaptation of the trees and the plants to the sunlight conditions are expressed in their stems and leaf architecture. Trees growing close to equator have adapted their morphology to catch the main sunlight supplied vertically from zenith while trees and plants growing close to the polar areas have adapted their morphological structure to obtain more of the horizontal sunlight. This adaptation is interesting to have in mind in the development of PBRs for Nordic conditions. This is also an argument for selecting open pond production close to equator whilst vertical PBRs might be more relevant for Nordic conditions. In some cases the unpredictable variation in natural sunlight is insufficient to secure a successful production as e.g. Asta Real AB relay strictly on controlled artificial illumina-tion to produce astaxanthin from the microalgae Haematococcus pluvialis. The Nordic countries have a world leading greenhouse and horticulture expertise which might contribute in the development of illumination systems adapted to microalgae. Mass production of microalgae in large-scale PBR is still a very new industry and there is a potential for technology improvement. Among elements to be considered more priority are distribution of sunlight and artificial light to optimise the production effectiveness of the PBR. For algae cultivation on a larger scale in greenhouses it is natural to use horticultural lamps. Horticultural lighting has been developed for decades and is widely

48

http://www.focussolar.de/Maps/RegionalMaps/Europe/Europe

used in nurseries. Since the photo ecology of algae differ significantly from higher plants reflected in their light harvesting physiology, horticultural lamps might need to be technically modified to be fully beneficial for algae cultivation. Trials carried out by IGV,BerlinGermany2006basedonuseofstate-of-theartphotobioreactortechnologydevelopedbyIGVindicatedthatapplyingnaturalilluminationsuppliedwithartificiallightning for algae production is feasible in terms of productivity. In summary, an area with particular development potential for the Nordic countries at this time appears to be the exploitation of high value chemicals for cosmeceuticals and nutraceuticals markets in the context of industrial biotechnology. Residues after extraction can be used for anaerobic digestion and the resulting biogas injected into the gas grid, although co-digestion with another feedstock will be needed to provide the

49

Global Horizontal Irradiance, GHI (Annual value 2007 in kWh/m²)

necessary economies of scale. Biomass production costs can be lowered by growing the algae on nutrient-rich waste water and with waste CO2; appropriate regulatory stand-ards would need to be met. Other areas of significance include generating IP e.g. for liquid biofuels (to be applied internationally), replacing fishmeal in animal feed, and developing integrated growth systems with anaerobic digestion and aquaculture. Given adequate support, algae have the potential to become a substantial driver in the develop-ment of a bio-based economy in the Nordic countries.

MICROALGAL R&D OPORTUNITIES AND BENEFITS ARE MAKING A GENERAL PROGRESS IN PLANT SCIENCE AND BIOTECHNOLOGY

The need of moving from the reliance on fossil resources has made biomass becoming resurgent as a principal feedstock and biological sciences, plant science and biotech-nology in particular will need to provide solutions to key challenges facing our planet. Step changes in these disciplines have already been made by microalgal R&D in which has the potential to accelerate the needed progress. Evolution has led to great diversity across all kingdoms of life, providing an abundance of bio-active molecules, enzymes, pathways and traits that are all targets for potential biotechnological applications. In this variety across all forms of life, both animals and land plants occupy a rather narrow phylogenetic space. Microalgae, however, are represented in almost all field of life, and therefore collectively provide a truly astonishing richness of diversity – a resource that as yet has hardly been used. The following arguments will outline how microalgal R&D, by developing this resource, may contribute to solving major challenges, such as food security, energy, materials, and benefit biological and biotechnological disciplines’ progress in general. Food Security supported by Science Microalgae is becoming more important as food source, especially when it comes to protein- and mineral-rich animal feed in aquaculture and beyond, and much can be learnt from studying microalgae that will be of benefit to crop science generally. As microalgae can be found in any imaginable habitat, and have evolved mechanisms with which to withstand extremes of temperature, irradiation, drought and salinity, this rich, however as yet hardly tapped, resource of genetic diversity can be mined for novel enzymes with the increasing ease and speed of genome sequencing. Enzymes that are found to be effective for desired traits may be transferred into conventional crop plants to reduce risk of crop failure and maintain the usefulness of arable land which might otherwise be rendered useless by the effects of climate change. Other example of interesting traits to be transferred to conventional crops are the enzymes for the long-chain poly-unsaturat ed fatty acids (PUFAs) synthesis in which are an important class of nutraceuticals that we currently derive from oily fish, or via fish oil capsules, but which originate from microalgae at the beginning of the marine food chain. Similar approaches could be taken for other valuable microalgal metabolites (e.g. other oils, vitamins, pigments and antioxidants).

50

Energy Security Supported by ScienceMicroalgae are hotly pursued as a feedstock for bioenergy – be it for their biomass or as self-repairing “solar panels” in biophotovoltaic cells – but their usefulness for under-pinning energy security extends further than this: the field of artificial photosynthesis draws heavily on the rich design spectrum of light harvesting solutions that exist in pro- and eukaryotic algae, learning from the principles of nature and using them as starting points for biomimetic systems. This also applies to the use of algal – especially cyanobacterial – enzymes as a blueprint for solar H2 production and CO2 reduction (Bioforsk). This diversity of algal light harvesting systems is also the basis for the engineering of improved photosynthetic organisms that will use the entire visible spectrum. Furthermore, algal synthetic biology could be used to produce desired high-spec biofuel molecules.

Material Security Supported by ScienceWhereas microalgal species maintain their genomes comparatively narrow, all in all, due to the large number of microalgal species, they show enormous metabolic flexibility. This adaptability can not only be extracted for novel chemicals (platform chemicals, pre-cursors for plastics, pharmaceuticals), which could either be harvested in microalgae or transferred into bacterial or plant systems, but can also inform material science: diatoms, for instance, have elaborated the capability to compose the most intricate silicate nanostructures in 3D, whereas nanoscientists are currently only able to manu-facture 2D structures. This has attracted large interest from the computer industry and solar panel industry in special (Sintef and NTNU). Diatom nanostructures also have the potential to be converted as slow-release nanocapsules for pharmaceuticals.

Biotechnology BenefitsSynthetic Biology Microalgae are now being developed as ‘green yeast’, presenting an extensive adaptability which unifies existing systems such as the ability to grow autotrophically (both in marine and freshwater conditions), and can overexpress proteins, as well as plant secondary metabolites at high levels. Additionally, there is an advantage of locating genes for the target proteins either in the chloroplast, consequently mimicking a prokaryotic expression system (while acquiring high yields and high solubility of protein products), or in the nucleus, accordingly following a eukaryotic expression path . The existence of a vacuole offers the option for storage in compartments and secretion pathways into the medium can also be exploited. Compared to terrestrial plants, micro-algae as platforms for synthetic biology, offer particular advantages, such as more than 10 times faster growth, short life cycles, increased manageability, easier cultivation, lower cultivation costs, and small size, all of which makes high-throughput screening easier. Consequently, a microalgal industrial biotechnology platform could therefore become a beneficial instrument for plant sciences, and important step to make synthetic biology achievements possible to be used in other plants and crops.

51

Environmental Applications Microalgae have been used to treat waste water streams, rich of nutrients and soils conta-minated, with heavy metals and toxic hydrocarbons. However there are still improvement potential. Additionally, pollutions may be detected by application of microalgal sensors from microalgal metabolism. Scrubb ing technology of CO2 and NOX from flue gasses using microalgae species in integrated biorefineries contributes to the cycling and capturing CO2, and there are improvement potentials in both tech nology terms and in the screening of suitable microalgae species as well as in genetics.

Conclusions The examples given above provide a flavour of the potential that algal research has to bene-fit the progress of plant science and biotechnology, both in terms of fundamental/ blue sky research, and addressing urgent issues such as food, energy and material security. The as-yet hardly tapped, rich resource of algal diversity has the potential to become a major contribu-tor to underpin the development of a bio-based economy in the Nordic countries. To realise this potential, however, algae will need the same genomic resources as other crops: full and fully annotated genome sequences, functional genomics and links with ex-pression profiling, metabolic profiling, epigenome profiling, understanding of natural varia-tion, RNAi knock down collections for the whole genome in selected species, and insertion mutant collections. In effect, algal improvement programmes would need to be developed in parallel to the improvement programmes in terrestrial crops. Both the expertise and the will exists in the Nordic countries to develop the majority of the opportunities mentioned here; some examples of Nordic countries researchers already pursuing relevant work have been given, and many more names could be added. The next chapter will address how algal research in the Nordic countries may capitalise fully on these strengths, and stay competitive in a well populated and rapidly moving international field.

STRENGTHS OF NORDIC COUNTRIES RESEARCH CAPABILITY ON THE GLOBAL ALGAE STAGE

In a globalised society, capabilities that exist on a national level need to be assessed in the light of activities on the international stage. Looking at this bigger picture makes it pos-sible to determine where the Nordic countries expertise can achieve the highest impact, and highlights the challenges associated with staying internationally competitive. This chapter gives a high-level overview of the strengths of current algal research capability in the Nordic countries, identifies overlaps with expertise internationally (and competition arising), assesses knowledge gaps and draws out key contributions the Nordic countries could make on the global algal stage.

Overview of Nordic Countries Strengths and Outline Swot Analysis Academia in the Nordic countries has great expertise in the environmental and ecological sectors for both microalgae, especially (but not exclusively) in the marine sector. Funda-

52

mental biology is also a key strength; major breakthroughs in photosynthesis research have been made in the Nordic countries, and a wealth of experience exists in taxonomy, physiology, metabolism and biochemistry of algae. The latter two are now increasingly being employed in biotechnological contexts, with high relevance to underpinning a bio-based economy. In general, the Nordic countries benefits from an enormous breadth of expertise that is of relevance to algae, but struggles to capitalise on this since the relevant researchers belong to different communities, which traditionally have not been in active dialogue. The Nordic countries algal culture collections are also of international significance. In terms of industrial activity, the Nordic countries has contributed to major break-throughs in applied biology and engineering, which have now been adopted by inter-national players such as Asta Real AB, and both academia and industry are actively involved in PBR design and integrated systems for producing algal biomass (e.g. Algalif, CO2BIO, Promar, Simris Alg, University of Life Sciences). While it is essential to be fully aware of the strengths the Nordic countries have to offer, in order to draw informed conclusions it is also valuable to put them in the context of known weaknesses of the general Nordic countries set-up, and to be mindful of both opportunities and threats associated with algal research in the Nordic countries. To facilitate this process, an outline SWOT analysis is given in Table under. More detail has already been described earlier in this text on the range of opportunities for progressing plant sciences and biotechnology in general through algal research.

STRENGTHS WEAKNESSES

• World leading aquaculture industry • Lack of cohesion between the constituent research communities

• World leading aquaculture feed industry • Small number of people with combined engineering and biological expertise

• World leader in aquaculture R&D • Decline in freshwater expertise

• World leading omega-3 industry and R&D • In common with other scientific endeavours:

• Strong marine biotechnology infrastructure • Less flexible in responding to new opportunities than US / BRIC countries

• Ecological/environmental R&D, especially marine, impacts of climate change

• Comparatively poor track record of successful commer-cialisation of R&D outputs, compared e.g. to US

• Fundamental biological R&D: photosynthesis, physiology, phylogeny, taxonomy, whole organism biology, biochemistry, systems/molecular/microbiology, biotechnology

• Diversity of research base

• International microalgal culture collections

• Focus on integrated systems in applications

53

Outline SWOT Analysis of Algal Research in the Nordic Countries

OPPORTUNITIES THREATS

• Use environmental expertise to forecast environmental con-sequences of large-scale algal growth, and to develop algae as bio-indicators for environmental change/impact. Improve reliability and uptake of modelling and Life-cycle Assessment (LCA) through improved datasets, to pre-empt expensive mistakes and accelerate progress

• Loss of lead in current strengths due to being diluted/ crowded out by well-funded international competition (especially US and BRIC countries; loss of funding for the Carbon Trust ABC is an example of how expertise and momentum is being wasted through lack of support)

• Rising oil prices and potential breakthroughs in low cost, sustainable integrated algal production/biorefining at scale may make algal bioenergy (and other bulk products) com-mercially viable

• Loss of expertise: through staff retiring and insufficient numbers of new people entering the field (especially in traditional disciplines such as taxonomy)

• Rising prices of fish oil and fish meal due to the aquaculture expansion in relation to fish stock depletions while break-throughs in large-scale algal production may turn microalgae to be a sustainable source for omega-3 and aquaculture feed

• First-rate Nordic R&D outputs being commercially exploited mainly abroad, with little benefit coming back to Nordic countries

• Increased availability of microalgae expertise from countries suffering high rate of unemployment due to economic crises

• Disappointment of unrealistic expectations may lead to blindness in funding bodies, politicians, business and the public for real opportunities algae offer

• Increase sustainability of CO2/heat/waste water producing industries and aquaculture through integrated algal growth systems and bioremediation

• Use expertise to develop algae as industrial biotechnology platform with increasing number and diversity of model systems, making use of novel approaches such as epigenetics

• Develop novel products from bioprospecting and mining of growing body of omics data

• Exploit benefits of coordinated interdisciplinary work, if Nordic countries research community can be united

• Increase collaboration on international scale, access international funding

Overlaps with International Activity/Expertise Ecological expertise is shared with some other European players such as Germany (e.g. Alfred Wegener Institute, www.awi.de/en/home/). The US, Israel and most European countries, notably Germany, Italy, Spain and France also have considerable expertise on photosynthesis and fundamental biology, and often have stronger commercial activities applying the fundamental knowledge to biotechnological applications. Israel has a 30 year track record in algal biotechnology. The US is also very active in this area, and the BRIC countries are rapidly catching up. Culture collections internationally have a strong

54

history e.g. in Japan, such as MCC at NIES http://www.sbs.utexas.edu/utex/otherRe-sources.aspx.(http://mcc.nies.go.jp/); NBRC at NITE (www.nbrc.nite.go.jp/e/), the US e.g. UTEX (www.sbs.utexas.edu/utex); CCMP (https://ccmp.bigelow.org/), Germany CCAC (www.ccac.uni-koeln.de/), SAG (http://epsag.uni-goettingen.de/) and France PCC at CRBIP(http://www.pasteur.fr/ip/easysite/pasteur/fr/recherche/les-collections/crbip/informations-generales-sur-les-collections#); an overview of international collections can be found at http://www.sbs.utexas.edu/utex/otherResources.aspx. Leadership in the field of PBR design and biomass growth internationally is shown by e.g. Italy (e.g. Mario Tredici, Florence), Spain (e.g. University of Almeria), Portugal (e.g.VitorVieira,Necton/AlgaFuel),Germany(e.g.ottoPulz,Potsdam),andIsrael(e.g. Sammy Boussiba, Ben-Gurion).

Competition Between Nordic Countries and International Capability All overlaps have the potential to turn into competition. This is less of an issue for ecological and environmental research and fundamental biology, where broadening the knowledge base can increase momentum and produce synergies (although it increases pressure to be the first to publish), and for culture collections, where a certain level of redundancy is essential to avoid contamination or natural disasters in one collection wiping out access to important strains. Competition becomes a threat wherever results can be commercialised. Of the overlaps listed earlier in the text, competition is par-ticularly a threat to biotechnological R&D, and especially for high-value applications where algae can be grown in closed, highly controlled systems, since unlike technologies applicable to open systems they can be transferred to virtually any location. There is con-siderable activity especially in the US to develop algae as a biotechnological platform; notonlyCraigVenter’scompanySyntheticGenomicsInc.,butalsocompanieslikeSolazyme Inc., Sapphire Energy Inc. and Joule Biotechnologies Inc. on the energy side have an active interest in employing genetically modified algae. The San Diego Center for Algae Biotechnology develops algae not only for bioenergy, but also for expression oftherapeuticproteins.Vaccinesandotherhighvalueproductsfromalgaearealsobeingpursued by companies such as PhycoBiologics Inc and Phycotransgenics LLC, both in the US. In Israel, the university spin-out TransAlgae Ltd has been set up as an algal breeding company for a wide spectrum of applications. In addition to the substantial funding that is being poured into this kind of research especially in the US, competition is also increasing from Asia, in particular China, Japan and Korea.

Knowledge Gaps Filled by Nordic Countries Expertise Communication with algal stakeholders has highlighted that – while much work remains to be carried out – not many gaps in expertise exist in the algal field. In ad-dition, the increased global interest in algae, especially through new players from the BRIC countries, and through the large influx of funding in the US, is leading to closure of remaining gaps. Even in its traditional areas of strength, the Nordic countries is in

55

danger of being diluted, if not crowded out. The expertise in algal culturing, molecular biology /synthetic biology and on photosynthesis is shared by others who often benefit from stronger funding. Nevertheless, the challenge posed by the world’s need to turn from a petroleum- to a bio-based economy is of such magnitude that parallel research approaches are needed to find solutions on acceptable timescales. This represents a window of opportunity for Nordic countries expertise. The high quality of the Nordic countries research base in this area, as well as creative approaches characteristic for Nordic-based scientific excellence, add considerably to the Nordic countries’ competi-tiveness, and need to be fully made use of. Furthermore, the Nordic countries’ marine biotechnology expertise and aqua culture engineering are of great value and can help to address e.g. marine bioprospecting (e.g. MabCent-SFI, Marbank and Marbio), and aquaculture engineering expertise transfer to microalgaecultivation(e.g.theuniversities,Sintef,ImR,NIVA,Nofima).Ifthisexper-tise can be integrated into budding commercial activities, both nationally and internationally, it can both save costs and contribute to successful and sustainable scale-up of microalgae cultivation. Expertise in the underpinning disciplines of phylogeny and taxonomy, although not unique to the Nordic countries, is internationally on the decline, and hence may turn into a gap which the Nordic countries would be well placed to fill, provided its own level of national expertise is maintained.

key Contributions the Nordic Countries Could Make The Nordic countries could make a number of key contributions to the global algal field. Its strength in engineering of intensive aquaculture with highly controlling the produc-tion parameters can be transferred and contribute to the development of large-scale microalgae production. Again, unification of the research community will be an essential step, as will making both the commercial world and the international academic arena aware of the value of what it has to offer. Integration of algal growth with aquaculture promises ecological and economic benefit on a national as well as global level, and the Nordic countries research com-munity (especially Nofima, Sintef, ImR and the universities) are well placed to increase sustainability of the aquaculture industry. In the area of culture collections, the Nordic countries are expected to continue its lead e.g. in the development of cryopreservation techniques. Finally, especially in light of the threat from well-funded international competition, the Nordic countries should make sure to capitalise on its R&D strengths in genetics, molecular biology and biochemistry to develop microalgae as an industrial biotech-nology platform. This would employ functional genomics, algal breeding, metabolic engineering and synthetic biology, as part of a global effort to transition into a bio-based economy. The platform could be developed with the aid of an underpinning infrastruc-ture in omics and could feed into the developing Technology Innovation Centres (TIC) onHighValueManufacturing,aswellasbecomingpartofthepipelineforanypotentialfuture RD&D initiatives on industrial biotechnology.

56

ALGAE RESEARCH VALUE CHAINS IN THE NORDIC COUNTRIES – ANALYSIS OF GAPS AND RECOMMENDED ACTIVITIES

To increase the impact of algal expertise in the Nordic countries, it is important to con-nect together the various research elements that are needed to progress the outputs of fundamental research onwards into applications. In the Nordic countries context, it is helpful to differentiate between two overarching value chains for microalgal research:

1. Fundamental research leading to the development of novel high tech solutions and high value products employing microalgae, with the end goal of building the next generation of algal technology applications, and

2. Further improvement and optimisation of existing applications in order to make them financially viable, more profitable and/or environmentally acceptable.

Considerable expertise exists in the Nordic countries that can contribute to both of these value chains. Both in different ways – and with input from different kinds of fundamental research – have potential to underpin the development of a bio-based economy in the Nordic countries.

Development of High Tech Solutions and High Value Products Employing Microalgae By its nature this value chain requires intense, lab-based R&D (Technology Readiness Level (TRL) 1-4) and, although mostly found in multidisciplinary approaches, tends to produce stand-alone end products (a patented process or physical product). These are often taken to higher TRL levels through spin-out companies from research institutes. Those spin-outs in turn are frequently acquired by larger companies who implement the technology in their operations. The research value chain in this instance would start with fundamental lab work; generation of protected IP that can be sold or licensed could be considered an end point. Examples from industrial biotechnology include: •Underpinningmethodologiesthatcanbepatented/licensed: – algal synthetic biology toolkits – algal transformation systems – high-throughput screening technologies for algal bioprospecting (microfluidic cultivation and selection systems; systems biology/omics service development) •Novelproducts: – platform chemicals – pharmaceuticals – nutraceuticals – energy products: e.g. algal biophotovoltaics; solar H2 production and CO2 reduction (through biomimetic catalytic systems, based on algal enzymes) – ecological applications (ecosystem services in the built environment; algal sensors for pollutants)

57

The indicative list above represents a highly diverse spectrum of approaches, and will need to be driven forward by R&D teams with very different expertise in each case. Indeed, many of these novel approaches could develop into full value chains of their own, with the potential to overtake currently identified algal applications in scope and importance. It is outside the remit of this report to review gaps and make recommendations for each of these individually; however, several common features can be drawn out:

Gaps and Bottlenecks The Nordic countries is fortunate to have a wealth of brilliant horticulture, aquaculture and algal scientists who have a track record of innovative thinking. Bottlenecks for capitalising on this have included scarcity of strategic funding support and of mechanisms by which researchers can interact with industry in a meaningful way. Such interaction would help to identify pathways of conducting world-class science; science which has outputs that are of high relevance to industry, and hence the potential to identify routes to commercialisation. A further bottleneck that is shared with com-mercialisation of other bioscience outputs is presented by the fact that researchers often are still not too familiar with how to take brilliant ideas, inventions and developments further: starting with appropriate IP protection combined with identifying industries for which the IP is relevant, and then by building teams with the right mix of skills to move to the next stage. An increased awareness among researchers of the relevance of their expertise to commercial applications, and of the opportunities that could arise from taking their research outputs further through development, would accelerate the flow of algal R&D into novel biotechnological applications. Other helpful skills include knowing when to draw in other expertise (e.g. business know-how), and when to let go – understandably scientists who have developed a new process or product tend to be keen to retain control; however, to get to the next level, business and marketing experts increasingly need to be in charge if commercialisation is to be successful.

Recommendations The numerous opportunities that exist to build algae as an industrial biotechnology platform could be best assessed and developed in a forum that will bring academics and industry together to discuss the overlap in priorities for R&D for both parties, and that will feed into a strategic funding initiative. In such a forum, it can be discussed and clarified which of the technically feasible and intellectually rewarding projects would provide most benefit in an industrial and economic context. Issues such as the advantages of algal systems over current methods, the best choice of model organisms and the most relevant tools and target molecules can be addressed, leading to research outputs that will have high relevance for industry. A very encouraging start in this direction has been made through the Nordic Algae Network meetings and work-shops.

58

Further Improvement and Optimisation of Existing Applications While the research value chain discussed above largely produces high-tech stand-alone solutions based on algae, this value chain is intimately connected to the scale-up of algal production and hence requires integrated multi-disciplinary work across a spectrum of science and engineering disciplines. Laboratory-based biological and biotechnological work is in most cases still essential; however it needs to be informed by the requirements imposed by the entire pipeline (since improvements in one area may introduce difficulti-es in another), and needs to develop integrative approaches underpinned by sound LCA and ecological assessments. Most interesting products are:

•Basecommodities–biomassenergyproducts,bulkanimalfeed•Existinghighvalueproducts–specialityfeeds/foods,nutraceuticals,cosmeceuticals•Bioremediation–wastewaterclean-up,Co2/NOx scrubbing

The value chain for all of the above consists of: selection (and/or development) of algal strains and ecologically sensible locations for cultivation, growth of biomass, harvesting, processing, down to distribution, sales and marketing, with refinement of the whole process through iterative life cycle, sustainability and economic assessment. Research in fundamental bioscience underpins all aspects of this chain up to distribution; relevant research areas include:

– For strain selection and growth: Algal breeding, metabolic manipulation through media composition, disease control, symbioses

– For harvesting and processing: Wall composition /manipulation /degradation; enzymology; biochemical fractiona-tion, separation and purification techniques

– Overall: Life cycle and sustainability assessment based on sound data; modelling of scenarios

Gaps and Bottlenecks A key bottleneck lies in human resources: individuals each of whom understands diffe-rent sections of the value chain are required, and they are in short supply. Major capacity building is needed especially of scientists who have a sound grasp of both biology and engineering; more extensive integration with ecological expertise would also be helpful. This is a gap on a global level: availability of trained personnel has been highlighted as the second-most critical issue for global algal industries in The Algal Industry Survey 2008. http://www.ascension-publishing.com/BIz/algal-industry-survey.pdf Furthermore, the field would greatly benefit from an increased body of solid data that can feed into modelling approaches, especially the all-important life cycle and sustaina-bility analyses. The final major bottleneck is the provision of funding opportunities that encourage

59

researchers to collaborate and develop synergies between their research activities under the umbrella of a strategic research agenda. While pockets of funding are accessible to algal researchers, they are not joined up and do not provide strategic direction.

Recommendations To address the bottlenecks mentioned above, it is highly recommended that research councils and funding bodies, and in consultation with academia and industry, develop a joined-up strategy for algal value chains in the Nordic countries. This would need to be followed up with integrated funding appropriate to the various bodies involved. Only a cohesive strategic approach with appropriate funding will ensure that the algal research strengths, which the Nordic countries undoubtedly possesses, will be counted on the international stage, and that the benefit of this expertise will be felt in the Nordic countries directly through underpinning the development of a national bio-based economy. Strategic funding should include a cross-council graduate training programme to build capacity in graduates and post-docs with a sound understanding of the biological, engineering and environmental challenges that are so crucial for successful commerciali-sation of algal technologies. Another priority area should be the establishment of a peer-reviewed, open access database for information to feed into life cycle and sustainability analyses and modelling studies.

Summary Both research value chains discussed above build on biological R&D strengths in the Nordic countries, and in different ways have potential to underpin the development of a bio-based economy. Cooperation with other funding bodies that have overlapping interests would further add value and momentum. Funding initiatives for this value chain would best be delivered under a national strategy for algae, which builds on the strengths of the Nordic countries and joins up the RD&D outputs across disciplines and technology readiness levels along the entire pipeline.

AREAS OF RD&D REqUIRED TO PROMOTE THE DEVELOPMENT OF AN ALGAL ECONOMY

As highlighted earlier, algae have considerable potential to contribute to a bio-based economy in the Nordic countries: through development of an industrial biotechnology platform which underpins food, energy and material security, and through integrated biorefining solutions for fuel, feed, (platform) chemicals and bioremediation services. Algae hence have an important role to play in industrial biotechnology & bioenergy, and food security. To establish the full extent of these opportunities, and to turn the potential into economic reality, substantial RD&D needs to be carried out for each of the value chains.

60

The risks and rewards associated with different aspects of the broad spectrum of RD&D topics vary considerably, as do their importance for progress of the overall field. Assessing which research needs to be carried out, and how risky, rewarding and important it is, will help to form a strategy for algae in the Nordic countries.

Priority Areas of Development to Benefit the Nordic countries Economy To capitalise on the strengths in world-class biological R&D the Nordic countries pos-sesses, and to build a high-tech innovation cluster that will underpin the establishment of a bio-based economy, algae should be developed as an industrial biotechnology plat-form. Such a platform will serve to overexpress proteins and metabolites for chemical and pharmaceutical applications. Its development needs to be accompanied by mining the vast diversity of algae for useful traits, enzymes and metabolites through biopros-pecting, and by crop improvement programmes for algae: this will underpin food and material security as described earlier, and is expected to lead to the discovery of novel bio-actives and pharmaceuticals. The second value chain (i.e. further improvement and optimisation of existing applications) also has potential to benefit the Nordic countries economy. In addition to improving the as yet unfavourable economics of algal bioenergy and bulk products, high priority should be assigned to realising the full potential of algae to contribute to high value food/feed production and integrated bioremediation: particularly useful areas include algal growth as part of integrated aquaculture, as well as the use of anaerob digestion (AD) liquid digestate as nutrient feedstock – wherever possible in conjunction with CO2 and NOx scrubbing from flue gasses. The most appropriate use of the biomass created in these integrated applications would be, regulation permitting, as animal feed to replace fish meal, or fertiliser. If regulatory frameworks do not permit these uses, the biomass can be used as feedstock for AD (although implications for end use of AD byproducts would need to be considered). In the medium and long terms, the output of both value chains should converge in the concept of an integrated biorefinery, where algal biomass – dedicated crops and/or residual biomass after extraction of high value compounds from industrial biotech-nology approaches – would be fractionated into its useful components. Theoretically these comprise protein for food or feed, carbohydrates as feedstocks for biopolymers or bioalcohols, lipids for food, feed, oleochemicals or biodiesel, and potentially metabolites for chemical applications. Caveats include that only a subset of end uses will be appropriate for any given feedstock, and that all developments need to be underpinned by sound life cycle and sustainability analyses. With these in place, however, microalgae can be developed into a highly versatile branch of the bio-based economy.

61

CONCLUSIONS AND RECOMMENDATIONS

This study was commissioned by the Blue Bio project, to address the area of micro algae; the current academic and industrial activity, and potential as a feedstock for energy and other products, and how this could be optimally developed. The objective has been to analyse how the Nordic countries best can capitalise on its strengths in the light of current and emerging opportunities for algal R&D, and in the context of international competition. First, potential opportunities for algal R&D to underpin food, energy and material security, and progress biotechnology has been reviewed, and then the strengths of the Nordic countries research capability on the global algae stage has been assessed. Gaps in algal research value chains in the Nordic countries have been analysed, and levels of risk, reward and importance of areas of RD&D required to promote the development of an algal economy have been assessed. After establishing the potential for the Nordic countries in algae and determinating how this area could progress forward, some key recommendations have been made:

A. The Nordic countries needs to develop a focused and integrated approach to algae. B. Algal production should follow integrated approaches and be developed in demon-

stration projects. C. High value products from algae, especially in the context of integrated biorefining,

should have higher priority than fuel production. D. The Nordic countries has world-class algal expertise which has suffered from scarce

and disperse funding; strategic and linked-up funding packages with industry input are required to move forward.

Three principal take-home messages for microalgae are:

1) There is a need for a central co-ordination point. 2) There is a need for co-ordinated funding for R&D. 3) There is a need for demonstration projects.

Strategic Funding In the medium and long terms, strategic funding calls on research underpinning the development of an algal industrial biotechnology platform would ideally be part of an industry club that also draws in other councils and funders. This would ensure inter-disciplinary connectivity and ongoing relevance of the world-class research to indu-strial developments, and provide a pipeline for licensing and commercialising research outputs.

Cross-Council Strategic Initiative on Microalgae Close integration with engineering and environmental expertise is needed in order to make meaningful progress across the pipeline as a whole. To develop the algal R&D field as a whole, it is recommended that the research councils work together to assess

62

which areas of algal research value chains (and which algal products and services) the Nordic countries are best placed to develop, based on their research strengths and on the benefits of research outputs to a bio-based economy in the Nordic countries. Leading on from this assessment, the councils may wish to formulate a strategy for algal R&D in the Nordic countries. The identified strategic R&D aims would best be realised by bringing the currently fragmented multidisciplinary algal research community together under the umbrella of a virtual Nordic countries centre of excellence on algae, with core funding being provided from across the councils and industry. It needs to be stressed that strategic funding should also include unrestricted blue sky research on algae, without which the pipeline of innovative algal solutions is likely to collapse. The centre could embrace both algal research value chains, and for value chain two, should work closely with a network of industry-led pilot and demonstration sites. Such collaborations could be funded through LINK-type projects, and would underpin the optimisation and deployment at increasing scale of those integrated algal solutions which the strategy has identified as particularly relevant to the Nordic countries. The creation of and support for such a centre would provide cohesion, focus and momentum for the high quality, but currently disjointed algal research community, would build capacity, and establish a firm foot-hold for Nordic countries expertise on the international algal stage.

Strategic Initiative on Microalgae across Research Councils and Government Departments A cross-council strategy on algae would be a very helpful step, and would lead to co-ordinated funding initiatives with focused, joined-up and industrially relevant research outputs. However, unless those outputs are developed beyond the technology readiness levels that are the remit of the research councils, pull-through to commercialisation and consequent benefit for the Nordic countries’ emerging bio-economy may be limited. To realise the full potential of algae for the Nordic countries economy, a joined-up approach across the research councils, banks and all relevant government departments is needed. The government has highlighted the importance of mechanisms that facili-tate the translation of the Nordic countries’ research capabilities into economic benefit, and with the initiative to create technology innovation centres has provided a funding mechanism to do so. The research councils may want to cooperate in engaging with the relevant government departments and banks to create a national strategy on algae that spans research, development and deployment, and may recommend to the govern-ment the establishment of an algal technology innovation centre. The combination of a strategic ally funded academic centre of excellence which builds on the strengths of the algal research community in the Nordic countries with a technology innovation centre that takes step-changing research outputs through to commercial application would provide a complete and strong pipeline. Such a pipeline would guarantee high impact of Nordic countries algal research, and would provide direct benefit to the Nordic countries by both determining and realising the potential that algae have to contribute to a sustain able bio-based economy. Through smaller-scale initiatives (such as the algal INTERREG programmes BioMara and EnAlgae, and the Carbon Trust ABC) that

63

have required collaborative work across research groups and with industrial stakeholders, the algal community has demonstrated an eagerness to overcome its fragmentation. The response of the com-munity to a national strategic initiative on algae is expected to be highly positive, and would put the Nordic countries back on the map as a serious international player in this highly competitive field.

Summary The Nordic countries have a wealth of biological expertise to offer to establish algae as part of a bio-based economy, both through high tech approaches to build algae as an industrial biotechnology platform, and by developing algal products and services in the concept of integrated biorefining. This is complemented by extensive ecological expertise that helps to understand and model the role of algae in climate change and develop them as bio-indicators for environmental impact. This wealth of knowledge has not been made best use of in the Nordic countries, for two principal reasons:

1. A lack of integration of the research community across the breadth of relevant disciplines: this needs to be catalysed by providing funding for multidisciplinary research programmes, where possible linked to collaborative demonstration sites with industry.

2. Progress in the field has been seriously hampered by lack of funding. The Nordic countries are in grate danger of being marginalised on an international scale, since especially the US and BRIC countries have been and are investing heavily in this arena. Unless this situation is remedied, further opportunities will be lost. The quality and size of the knowledge base is likely to diminish through brain-drain to well-funded RD&D activities abroad. It would lead to first-rate Nordic countries R&D outputs again being commercially exploited mainly abroad, with little benefit coming back, and the Nordic countries would be forced to adopt technologies from abroad which could and should have been developed nationally.

The development of a virtual Nordic countries centre of excellence on algae would provide cohesion and much needed capacity building in multidisciplinary expertise. Such a centre would need to receive core funding from the research councils to support fundamental scientific research, underpinning the development of novel algal products and services. It would work closely with a network of industry-led pilot and demonstration sites on LINK-type projects. These would facilitate the optimisation and deployment of integrated algal solutions at increasing scale. In parallel, the research councils may want to recommend to the government and banks the establishment of an algal Technology Innovation Centre (TIC). A TIC would provide the pull-through to commercialisation beyond the technology readiness levels which fall under the remit of the research councils. The combination of a strategically-funded academic centre of cxcellence that builds on the strengths of the algal research community in the Nordic countries with a technology innovation centre that takes step-changing research outputs through to commercial application would provide a complete and strong pipeline. Such a pipeline would guarantee high impact of Nordic countries algal research. It would provide direct benefit to the Nordic countries by both determining and realising the potential that algae have to contribute to a sustainable bio-based economy: it will in the short to medium term develop tangible solutions, and at the same time ensure that underpinning science is being put in place to address the long term challenges to mankind.

64

REFERENCES

Bidigare, R.R., Ondrusek, M.E., Morrow, J.H. and Kiefer, D.A. (1990) In vivo absorption properties of algal pigments. Ocean Optics X Proc. SPIE, 1302, 290-302.Bricaud, A., Claustre, H., Ras, J. and Oubelkheir, K. (2004) Natural variability of phytoplanktonic absorption in oceanic waters: Influence of the size structure of algal populations. J. Geophys. Res., [Oceans] 109(C11).Cardozo,K.H.M.,Guaratini,T.,Barros,M.P.,Falcão,V.R.,Tonon,A.P.,Lopes,N.P.,Campos, S., Torres, M.A, Souza, A.O., Colepicolo, P. and Pinto, E. (2007) Metabolites from algae with economical impact. Comparative Biochemistry and Physiology, Part C 146, 60–78.ChapinIII,F.S,Zavaleta,E.S.,Eviner,V.T.,Naylor,R.L.,Vitousek,P.M.,etal(2000) Consequences of changing biodiversity. Nature 405:234-242.Chisti,Y.(2007)Biodieselfrommicroalgae.Biotechnol Adv 25:294-306.Huerlimann, R., de Nys, R. and Heimann, K. (2010) Growth, lipid content, productivity, and fatty acid composition of tropical microalgae for scale-up production. Biotechnol Bioen 107:245-257.Li,Y.,Horsman,M.,wang,B.,wu,N.andLan,C.Q.(2008)Effectsofnitrogensourceson cell growth and lipid accumulation of green alga Neochloris oleoabundans. Appl Microbiol Biotechnol 81:629-636.Oswald, W.J. and Golueke, C.G. (1960) Biological transformation of solar energy. Adv Appl Microbiol 2:223-262.Plaza, M., Cifuentes, A. and Ibánez, E. (2008) In the search of new functional food ingredients from algae. Trends Food Sci Technol 19:31-39.Pulz,o.andGross,w.(2004)Valuableproductsfrombiotechnologyofmicroalgae. Appl Microbiol Biotechnol 65: 635–648.Reynolds, C.S. (2006) The Ecology of Phytoplankton. Cambridge University Press,NewYork.Singh, J. and Gu S. (2010) Commercialization potential of microalgae for biofuels production. Renewable and Sustainable Energy Reviews.Volume14,Issue9,2596-2610.Smith,V.H.,Sturm,B.S.M.,deNoyelles,F.J.andBillings,S.A.(2010)Theecologyofalgal biodiesel production. Trends Ecol Evol 25:301-309.Spolaore, P., Joannis-Cassan, C., Duran, E. and Isambert, A. (2006) Commercial applications of microalgae. J Biosci Bioen 101:87-96.Tilman, D., Socolow, R., Foley, J.A., Hill, J. Larson, E. et al. (2009) Beneficial biofuels – The food, energy, and environment trilemma. Science 325:270-271.

5. References and Sources

65

Wilhelm, C. and Jakob, T. (2011) From photons to biomass and biofuels: evaluation of different strategies for the improvement of algal biotechnology based on comparative energy balances. Appl Microbiol Biotechnol 92:909-919.

SOURCES

Algal research in the UK (a Report for BBSRC by Dr Schlarb-Ridley, 2011) http://www.bbsrc.ac.uk/news/industrial-biotechnology/2011/110922-n-algal-research.aspx

Engineering & Economic Assessment of Algae Biofuel Production (PowerPoint presentation by Quinn, N.W.T., Berkeley National Laboratory, 2008). http://esd.lbl.gov/files/about/staff/nigelquinn/Engineering&Economic-Fnal_110108-5.pdf

Exploitation of Marine Living resources- Global Opportunities for Norwegian Expertise (Report fromDKNVSandNTVA,2006) http://www.ntva.no/images/stories/Rapporter/havbruk-2006.pdf

Fishmeal and Fish Oil – The Facts, Figures, Trends, and IFFO’s Responsible Supply Standard (IFFO- Anne Chamberlain, 2011) http://www.iffo.net/downloads/Datasheets%20Publications%20SP/FMFOF2011.pdf

Opportunities and Challenges in Algae Biofuels Production (A Position Paper by John R. Benemann, 2008) http://www.fao.org/uploads/media/algae_positionpaper.pdf

Photobioreactors for the production of useful microalgal biomass (PowerPoint presentation by ottoPulzandHorstFranke,IGV,2009).Microalgae Market and Application Outlook Report (Report from CBDM.T., 2011) http://cbdmt.com/index.php?id=7&raport=23

Microalgal Applications – Ecological optimization of biomass and lipid production by microalgae (dissertation of Maria Stockenreiter, 2012) http://edoc.ub.uni-muenchen.de/14830/1/Stockenreiter_Maria.pdf

Microalgalphotobioreactors:Scale-upandoptimisation(Barbosa,M.J.G.V.,Ph.DThesis, Wageningen University, 2003) http://edepot.wur.nl/121438

http://www.bioprocessalgae.com

http://www.fao.org/docrep/005/x3980e/x3980e07.htm

http://www.fao.org/docrep/003/W3732E/w3732e06.htm

http://www.frost.com/sublib/display-market-insight-top.do?id=223058470

http://www.nrac.umd.edu/files/Factsheets/fact160.html

http://www.nutritionaloutlook.com/1206/Omega

66

Microalgae are microscopic algae, and can be considered as small unicellular plants either existing individually, or in multicellular colonies. Microalgae occur in nearly all ecosystems but mostly in freshwater and marine aquatic ecosystems. Depending on the species, their sizes can vary from a few micrometers to a few hundreds of micrometers, and each algal cell represents a separate ”production”. Photosynthesis is the key process for the biological conversion of solar energy to chemical bond energy which the microalgae use in its metabolism to grow and produce or store compounds such as lipids. Microalgae are generally more efficient converters of solar energy due to their simple cellular structure. Unlike higher plants, microalgae do not have roots, stems and leaves, and their transfer efficiency of solar energy into biomass can exceed 10 %, while plants comprise only 0.5 %, which makes the microalgae photosynthesis more effective. Microalgae can double their biomass several times a day under good conditions, and in their aqueous suspension, they have more efficient access to water and other nutrients compared to higher plants.

Appendix 1: Microalgae Biology

Figure: Microalgae diversity visualized during the study [a) Scenedesmus quadricauda; b) Pedisatrum boryanum; c) Cyclotella bodanica; d) Scenedesmus dimorphus, e) Cosmarium quadrifarium, f) Chlorella vulgaris; g) Centric diatom; h) Pinnate diatom; i) Scenedesmus obliquus; j) Oedogonium; k) Nageliella, l) Cosmarium depressum].http://www.sciencedirect.com/science/article/pii/S0960148111006239

67

Figure: Phylogenetic tree highlighting the diversity and distribution of algae (boxed groups; colours indicate the diversity of pigmentation) across the domains of life122. For comparison animals and land plants are encircled in red and green, respectively. http://www.keweenawalgae.mtu.edu/

There is a great variety of microalgae classes, and generally the classification is based on the pigmentation of the microalgae, but also due to their life cycle and basic cellular structure. Chlorophylls are important photosynthetic pigment to microalgae, but they have also a variety of secondary pigments like for example carotenoids, billiproteins, phycocyanin, fucoxanthin and phycoerythrin which cause a broadening of the absorption spectra and helps covering the photo-synthetic active radiation (PAR) between 400 and 700 nm.

68

Phylogenetic Tree Highlighting the Diversity and Distribution of Algae

The four most important microalgal classes are:Diatoms (bacillariophyceae): These microalgae dominate the phytoplankton of the oceans, but are also found in fresh and brackish water. Diatoms contain polymerized silica in their cell walls. Diatoms store carbon in the form of natural oils or as a polymer of carbohydrates known as chrysolaminarin (beta-glucan). Beside chlorophyll-a and -c they also contain diadinoxanthin and diatoxanthin.

Green algae (chlorophyceae): These are also quite abund-ant, especially in freshwater and occur as single cells or as colonies. As their name implies the green algae contain mainly chlorophyll-a and –b. Starch is the main storage compound, though oils can be produced under certain conditions.

Blue-green algae (cyanophyceae): Much closer to bacteria in structure and organization, these microalgae play an important role in fixing nitrogen from the atmosphere and are found in a variety of habitats. Besides chlorophyll-a of bacteria, further pigments are phycoerythrin and phyco-cyanin.

Golden algae (chrysophyceae): This group of microalgae is similar to the diatoms, but their pigment system is more complex. Chrysophyceae can appear yellow, brown or orange in color due to their fucoxanthin and xanthophylls. Golden algae produce natural oils and carbohydrates as storage compounds.

Light Micrograph of the diatom Phaeodactylum tricornotum. Image courtesy of Alessandra de Martino and Chris Bowler, Stazione Zoolo-gica and Ecole Normale Supérieure. (http://en.wikipedia.org/wiki/File:Phaeodactylum_tricornutum.png).

The green algae Dunaniella salina can produce large amounts of the nutritive orange pigment, beta-carotene. The photo shows an orange alga (under stress) and a green alga. Photo: Paco Lamers (http://resource.wur.nl/en/wetenschap/detail/alga_produces_food_supplement_under_stress/).

The filamentous cyanobacteria Spirulina Arthrospira platensis. (http://www.valorimer.com/contenu-337-fr.htm).

The golden algae Chrysosphaera paludosa. Photo: Bourrelly. (http://www.wigry.win.pl/glony.htm).

69

Finally, the biodiversity of microalgae is enormous and they represent an almost untapped resource. It has been estimated that about 200.000 to several million species exist of which about 35.000 species are described. Over 15.000 novel compounds originating from algal biomass have been chemically determined. Most of these microalgae species produce unique products like carotenoids, antioxidants, fatty acids, enzymes, polymers, peptides, toxins and sterols.

Figure: Adapted from Kleivdal, presentation at NASF 2012 Biomarine Innovation Seminar.

Microalgae are efficient carbon dioxide (CO2) binders and consume approximately 1.8 kg CO2 per kg dry weight biomass produced. They are important for life on earth since they produce approx-imately half of the atmospheric oxygen (O2) through their photosynthesis, the biochemical process of carbon fixation producing hexoses or carbohydrates. About 90% of carbon is bound as macro-molecules, or in other words: proteins, lipids, carbohydrates. Lipids account for some 2 – 20% of dry weight of phytoplankton. Some microalgae can reach a very high lipid content and, Botryo-coccus braunii, a main contributor to crude oil deposits, can show lipid concentrations of up to 80% of its dry weight. Besides their capacity as a storage compound, lipids function as a buoyancy compartment. Most lipids are lighter than water, and inevitably, their presence counterbalances normal excess density to some limited extent.

70

Phototrophic Microalgae Produce Omega-3

Figure: Commercially important metabolic pathways in microalgae. This schematic representation depicts simplified cellular pathways involved in the biosynthesis of various products derived from microalgae. Although the chloroplast

can act as a factory for protein and hydrogen production (solid blue), the nucleus plays a fundamental role in metabolic control (dotted red). Both of these organelles contain individual genomes, which offer the possibility for

independent transgene incorporation (dashed blue and red).http://ipec.utulsa.edu/Conf2010/Powerpoint%20presentations%20and%20papers%20received/Noor_

Sam_90_received9-8-10.ppt

71

Commercially Important Metabolic Pathways in Microalgae

Under favorable conditions, unicellular algae grow continuously by a process known as cell division. Each cell enlarges and divides into two daughter cells that subsequently grow and divide yielding a culture that increases exponentially (e.g., 8, 16, 32, 64...etc.). Microalgae population dynamics can then be described by different phases:

1. The lag-phase, where, just after the inoculum, the cells increase in size, but not in number, and begin to absorb the nutrients supplied with the culture medium;

2. The log-phase (or exponential phase), where cells reproduce very fast and population growth is exponential;

3. The transitional phase (or declining growth phase), where growth rate slows down; 4. The stationary phase, where cells remains constant in number and reproduction is balanced by

death; 5. The decline phase, where cell number decreases since death rate exceeds growth.

Appendix 2: Microalgae Cultivation and Upscaling

Cell division of the green algae Cosmarium. Photo: Charles Krebs.http://www.photomacrography.net/forum/viewtopic.php?t=1062&sid=fb41027b8ac2369ca099c9682fb21a38

72

Figure: After FAO.http://www.fao.org/docrep/003/W3732E/w3732e06.htm#b2-2.3.2.%20Growth%20dynamics

The amount of time for algae to divide and the maximum density attained depend upon several factors:• Species• watertemperature• Salinity• Lightintensity• Nutrients• Co2 aeration • Vesselsize• Presenceofmicroscopic,predaceouscontaminants

Each microalgae specie has its own optimal range of parameters which also depends on the develop ment stage of the algal culture. Concentrations of cells in phytoplankton cultures are generally higher than those found in nature. Algal cultures must therefore be enriched with nutrients to make up for the deficiencies in the cultivation medium. Growth slows as the algal population becomes more crowded. Nutrients are depleted, meta-bolites build, and light penetration decreases because of self-shading. The cultures have reached their stationary phase for the current conditions and will not increase in density. Algae harvest-ed near this maximum density are a high quality food and it is normally advisable to harvest phytoplanktonic organisms during their log phase, since in the new culture they will grow more rapidly and will yield a more viable population. Nevertheless, in some cases, specific biopolymers are obtained in stationary phase and when exposed to specific stimulus (e.g. high light intensity to produce astaxanthine from Haematococcus pluvialis).

73

Five Growth Phases of Microalgae Cultures

Microalgal culture commence with a pure stock or starter culture of the microalgal species select ed for the purpose of the cultivation. Pure, uncontaminated microalgae species can be obtained from a culture collection, and there exist nearly 476 culture collections from 62 countries organized by World Federation for Culture Collections (WFCC) in an international database called World Data Center for Microorganisms (WDCM). Once obtained, starter cultures (usually transported in test tubes) are used to inoculate several new cultures. Some of these are kept as stocks to start up new cultures, while the rest are used to inoculate progressively larger vessels until there is enough culture to start mass production tanks. Aseptic cultivation is important to avoid invasion and contamination from other species. One strategy is maintaining the culture pure and another strategy is to keep a very high density which complicates other species to invade. Generally, the choice of strategy is related to what method is applied, and it is easier to work aseptic in small vessels whilst high density pure culture is more pragmatic for larger scale cultivation. Microalgae can be produced using a wide variety of methods, ranging from closely-controlled laboratory methods to less predictable methods in outdoor tanks. The terminology used to describe the type of algal culture include:

– Indoor/Outdoor. Indoor culture allows control over illumination, temperature, nutrient level, contamination with predators and competing algae, whereas outdoor algal systems make it very difficult to grow specific algal cultures for extended periods.

– Open/Closed. Open cultures such as uncovered ponds and tanks (indoors or outdoors) are more readily contaminated than closed culture vessels such as tubes, flasks, carboys, bags, etc.

– Axenic (=sterile)/Xenic. Axenic cultures are free of any unwanted organisms such as bacteria and require a strict sterilization of all glassware, culture media and vessels to avoid contami-nation. The latter makes it impractical for commercial operations.

– Batch, Continuous, and Semi-Continuous. These are the three basic types of phytoplankton culture, and batch culture consists of a single inoculation of cells into a container of fertilized seawater followed by a growing period of several days and finally harvesting when the algal population reaches its maximum or near-maximum density. In practice, algae are transferred to larger culture volumes prior to reaching the stationary phase and the larger culture volumes are then brought to a maximum density and harvested. According to the algal concentration,

Microalgae stock cultures. Photo: Pål Myhre.

74

the volume of the inoculum which generally corresponds with the volume of the preceding stage in the upscaling process, amounts to 2-10% of the final culture volume. Where small amounts of algae are required, one of the simplest types of indoor culture employs 10 to 20 l glass or plastic carboys, which may be kept on shelves backlit with fluorescent tubes. Batch culture systems are widely applied because of their simplicity and flexibility, allowing to change species and to remedy defects in the system rapidly. Although often considered as the most reliable method, batch culture is not necessarily the most efficient method. Batch cultures are harvested just prior to the initiation of the stationary phase and must thus always be maintained for a substantial period of time past the maximum specific growth rate. Also, the quality of the harvested cells may be less predictable than that in continuous systems and for example vary with the timing of the harvest (time of the day, exact growth phase).

Another disadvantage is the need to prevent contamination during the initial inoculation and early growth period. Due to the low density of the desired phytoplankton and the high concentra-tion of nutrients, any contaminant organism with a faster growth rate is capable of competing out the culture. Batch cultures also require a lot of labor to harvest, clean, sterilize, refill, and inoculate the containers. The continuous culture method, (i.e. a culture in which a supply of fertilized seawater is con-tinuously pumped into a growth chamber and the excess culture is simultaneously washed out), permits the maintenance of cultures very close to the maximum growth rate. Two categories of continuous cultures can be distinguished:

• Turbidostatculture,inwhichthealgalconcentrationiskeptatapresetlevelbydilutingtheculture with fresh medium by means of an automatic system.

• Chemostatculture,inwhichaflowoffreshmediumisintroducedintothecultureatasteady,predetermined rate.

The latter adds a limiting vital nutrient (e.g. nitrate) at a fixed rate and in this way the growth rate and not the cell density is kept constant. The disadvantages of the continuous system are its relatively high cost and complexity. The requirements for constant illumination and temperature mostly restrict continuous systems to indoors and this is feasible for relatively small scale production of high valuable end products.

Batch cultures. Photo: Pål Myhre.Microalgae inoculated in larger vessels. Photo: Pål Myhre.

75

However, continuous cultures have the advantage of producing algae of more predictable quality. Furthermore, they are amenable to technological control and automation, which in turn increases the reliability of the system and reduces the need for labor. The semi-continuous technique prolongs the use of large tank cultures by partial periodic harvesting followed immediately by topping up to the original volume and supplementing with nutrients to achieve the original level of enrichment. The culture is grown up again, partially harvested, etc. Semi-continuous cultures may be indoors or outdoors, but usually their duration is unpredictable. Competing organisms, predators and/or contaminants and accumulated meta bolites are factors rendering the culture unsuitable for further use. Since the culture is not completely harvested, the semi-continuous method yields more algae compared to the batch method at a given tank size.

Cultivation Methods – Open and Closed SystemThe next step after defining a strain and product of interest is to develop necessary bioprocesses to establish the connection between discovery and commercialization. The design and optimisation of the microalgal cultivation system is crucial for a successful production, and determination of an appropriate cultivation system is depending on the product and strain. Almost all microalgae are produced in outdoor open pond systems, mostly of the raceway-type with paddle wheel mixing. Around 10.000 tons are produced annually, with plant gate costs over $10.000/t. The biofuels pro-duction objective is to produce millions of tons at a cost under $1.000/t, and in order to achieve this goal, a number of challenges will have to be overcome. Microalgae are very small and grow as very dilute (<1 g/l) cultures in suspension. They have a very low standing biomass (<100 g/m2), and require daily harvesting from large volumes of liquid. The harvested biomass is perishable and must be processed immediately to maintain the high quality. Microalgae cultures require a source

Continuous culture in a small laboratory photobioreactor. Photo: Pål Myhre.

76

of CO2, either purchased or ‘free’ from power plant flue gases, biogas or ethanol plants. Micro-algae require a good climate with a long and stable cultivation season. For biofuel production algae must be produced at very high productivity, and future bioprospecting may hopefully bring up more suitable species available for cultivation. One of the major advantages of open ponds is that they are easier to construct and operate than most closed systems. However, major limitations in open ponds include poor light utilization by the cells, evaporative losses, diffusion of CO2 to the atmosphere, and requirement of large areas of land. Furthermore, contamination by predators and other fast growing heterotrophs have restricted the commercial production of microalgae in open culture systems to only those organisms that can grow under extreme conditions. On small scale, mixing is rather easy; however, at large scale, mixing becomes more difficult and can become rate limiting. The biggest advantage of open systems is their simplicity, resulting in low production costs and low operating costs. While this is indeed the simplest of all the growing techniques, it has some drawbacks owing to the fact that the environment in and around the pond is not completely under control, and unpredictable culture crashes are often caused by changes in weather, sunlight or water quality. Contamination from strains of bacteria or other outside organisms often results in undesirable species taking over the desired algae growing in the pond. The water in which the algae grow also has to be kept at a certain temperature, which can be difficult to maintain. Another drawback is the uneven light intensity and distribution within the pond.

Factors limiting algae biomass productivity (Source: Niegel et al, 2008).

77

Although open systems are suitable for very fast growing strains or for strains that grow at extreme conditions, such as high pH (Spirulina) or high salinities (Dunaliella), the majority of the strains and products with applications in the pharmaceutical industry require monoalgal or even axenic cultures. In order to meet these standards and aiming at attending a cost-effective process, several closed systems such as enclosed photobioreactors (PBRs) of various designs, including tubes, bags, panels, etc. have been developed in the last years. The productivity of PBRs and ponds are similar except when PBRs are erected vertically, which increases productivities per area of land, but not per m2 of PBR. Another advantage is that PBRs can be kept warmer in cold climates. However, PBRs are limited to a few hundred m2 for individual growth units, compared to several hectares for ponds. PBRs facilitate better control of culture environment such as carbon dioxide supply, water supply, optimal temperature, efficient exposure to light, culture density, pH levels, gas supply rate, mixing regime, etc. As in conventional heterotrophic cultivations, also in microalgal biotechnology high volumetric productivities are required to reduce the size of cultivation systems and consequently reduce pro-duction and downstream processing costs. This entails a high efficiency of light utilization besides high biomass concentrations because light energy is the growth limiting substrate. The basic idea of using sunlight to produce high-value compounds brings along several limitations, which are related to the light regime inside the cultivation system and have to be considered in the design and scale-up of photobioreactors. There is a big potential on improving the closed photobioreactor designs, and in finding ways to maximise photosynthetic efficiency and the control of metabolism and productivity. This can be achieved by shading, using a vertical bioreactor design, or by increasing biomass density. High density cultures require higher levels of mixing, however there are intensity limits on mixing. Higher levels of mixing requires more energy inputs and can also lead to shear effects through bubbling or boiling, which can also lead to high levels of fouling. At high densities certain algae

Vertical tubular photobioreactor produced by IGV. Photo: Pål Myhre.

78

produce inhibitors, which need to be avoided. Other important factor is understanding the ‘flashing light’ effect as algae travels from light to dark zones, and one of the key issue is varying the light intensity, with the aim of maximising productivity when light levels are at the highest peaks. Photosynthesis is inhibited by O2 produced by algae, and the tolerance varies between algal strains. Bioprospecting and selection of strains having higher energy efficiency on CO2 supply, tolerating higher pH and salt levels is another important issue. Work on the control of primary metabolism aims to control metabolism to match reactor design and to maximise productivity, but also to optimise production of lipids or colourants.

79

PROJECT BLUE BIO

Norwegian contact: Øystein Lieoystein.lie@forskningsparken.no

Swedish contact: Camilla Petterssoncamilla.pettersson@gu.se

or www.bluebio.org

© BlueBio 2013

Authors: Jenny Egardt, University of Gothenburg Øystein Lie, Mare Life Jon Aulie, Mare Life Pål Myhre, Marine Design AS

Photo: Pål Myhre, Marine Design AS, Sapphire Energy, Charles KrebsGraphic design: Clout AB

PROJECT PARTNERS

University of GothenburgMare LifeChalmers University of TechnologyNorwegian University of Life SciencesInnovationskontor väst Kjeller Innovation

The Blue Bio projectThis report is one result of the project Blue Biotechnology for Sustainable Innovations,orBlueBio,withintheEUinterregionalprogramIV-AintheKattegatt-Skagerrack (KASK)-region. The aim of this project has been to increase awareness about and interac-tion between the marine research and innovation systems in western Sweden and southern Norway. By finding common areas of interest and mutually beneficial means of collaborating we can increase both the utilization of academic research and the markets for developed products. While the project ends 2012, we hope that the results from the project will continue to be of value for both academy, society and industry. Other results of this project are an extensive handbook in marine innovation, which is a structured PowerPoint presentation that is meant to be used by innova-tion advisors as a “toolbox” when interacting with researchers and companies in the marine area, a short version of this handbook in an iBook format for easier dissemination, a marine biotechnology cluster of researchers and com-panies in the region, and the development of novel innovation cases from the research environment.

www.bluebio.org

Financed by

Project partners