Although several challenges remain in the trail toward algae biofuels commercialization and its adoption as a biofuel, as seen so far, an increasing number of companies and policy makers seem to believe the rewards outweigh the risks. Thus, the expectation pathway for algae-based biofuels remains uncertain.

Theoretically, microalgae have been shown to be a potential source to produce biodiesel because of their many advantages as a sustainable feedstock for biodiesel production compared to other feedstocks (Ahmad et al. 2011). Nevertheless, not only more innovations are still needed for the development of technologies that reduce costs while increasing the yields of production (Singh and Gu 2010), but it is also required a comprehensive set of policies to assist the development of micro­algae technology.

In the management area, it is extremely important in the early phases of this prom­ising industry, to deliberate new business models that look at the bioenergy poten­tial of algae through the transportation fuels market, as well as production of other higher-value products so as to make the economics practicable (Singh and Gu 2010).

2 Conclusion

The continued use of fossil fuels for energetic purposes is gradually becoming clearer to the society that is unsustainable. Innovative technologies and sources of energy must be developed to replace fossil fuels. In this context, biofuels play a vital role in meeting the energy needs of human beings. There is reason to believe they will continue to do so in the future albeit in a different manner. The basic economic motivation for biofuels is that they are a convenient, low-priced, domes­tically producible and a substitute for oil. However, alternative sources of biofuel derived from terrestrial crops such as sugarcane, soybeans, maize, and rapeseed inflict a lot of pressure on the global food markets, contribute to water scarcity, and precipitate the destruction of forests. Besides that, many countries cannot grow most of the terrestrial crops due to climate factors or lack of fertile cultiva­tion areas for energetic purposes. In this context, algal biofuels can really make a contribution for the future world sustainability.

In the presented chapter, it is clear that algae are now being intensively researched as a potential biofuel feedstock. In addition to their potentially high yields per unit land area, algae can grow in unsuitable land for agriculture, includ­ing industrial areas. Thus, their exploitation offers the possibility of a feedstock for producing biofuel that avoids damage to ecosystems and competition with agricul­ture associated with other biomass resources. Although many testing and start-up companies are in operation in several countries, cost information is scarce. Along the aforementioned literature review, a consensus was found that biofuels from algae are, in any case, still at the research and development stage and face numer­ous obstacles related to energy and water needs, and productivity.

Consequently, we revisited the recent developments in biofuel algae-based mar­kets and their technical issues, political standpoints, and environmental impacts. From a research and technology perspective, we stressed the importance of the US bioenergy policies and the European SET plan, as well as by the scenarios from IAE in 2010. These policies inform that several countries have introduced mandates and targets for biofuel expansion and, moreover, that production, international trade, and investment have increased sharply in the last few years.

The introduction of these new policies is essential for lowering the costs of algae biofuels, encourage investment, and develop greater diffusion of this emer­gent technology. Otherwise, in the lack of public policy, currently production costs will eventually remain too high to replace fossil fuels. In the same manner, it is expected that these policies will stimulate innovation to tackle some of the prob­lems in this emerging market.

The problems concerning large-scale production of biodiesel from algal farms on non­arable land include inconsistent and insufficient algal productivities, uncertain capital and operating costs, volatile market prices, and unknown levels of government support. Our survey permits to conclude that although intensive work is being done on many technolog­ical issues, economic studies and respective data are scattered, incomplete, and divergent.

With the onset of new policies, incentives, and massive investment in the pri­vate and public spheres, more researchers are forging new understanding in the science required to make algal biofuels economically feasible. In the present situ­ation, however, the technology to efficiently produce biodiesel from microalgae is not yet competitive. However, with policy support and incentives, we believe that the algal biofuel industry will continue to develop and assuming that this technology follows renewable energy cost trends, costs will decrease to even­tual economic viability. In parallel, processes must be developed to reduce costs and increase production. In this respect, the currently fast rate of development of algae biofuel technology and the actual rising of petroleum-based fuels prices are encouraging algae-based biofuels feasibility in the next few years.

Nevertheless, as shown in this chapter, we are witnessing a rise of companies’ strategies of entering new markets. Reports and news of new activities of algae — based companies are frequently on the news nowadays. These are signs that the uncertainties around the commercialization of this still not mature technology are not sufficient to hinder investment decisions.

Acknowledgments Lauro Andre Ribeiro and Patricia Pereira da Silva would like to acknowledge that this work has been partially supported by FCT under project grant PEst-C/EEI/ UI0308/2011 and from the Brazilian National Council for the Improvement of Higher Education (CAPES). This paper has been framed under the Energy for Sustainability Initiative of the University of Coimbra and supported by the R&D Project EMSURE Energy and Mobility for Sustainable Regions (CENTRO 07 0224 FEDER 002004).