Due to the dramatic increase in primary energy consumption and the increasingly strict environmental issues triggered by fossil-fuel sources, it is our firm belief that development of algal biofuel is urged. As discussed in this chapter, the main challenges pertaining to algal biofuel viability entail lower environmental impact beyond a number of associated benefits (namely, CO2 reduction and wastewater treatment), which may contribute to ensuring eco­nomic competitiveness.

However, associated with biofuel production is the spent biomass that is produced, with huge potential in terms of applications—from secondary biofuels through feed formulations and fine chemicals to bioremediation purposes. Therefore, biofuel production using spent biomass entails a strong economic interest, as thoroughly discussed in this chapter.

For competitiveness in this algae-based scenario, industry should follow an integral upgrade approach via implementation of an algal-based biorefinery, thus maximizing the economic return on all components of algal biomass, aiming at the point of zero residues.

A careful analysis of the current state of the art indicates that it is difficult to develop algal biofuel to the point where it can fully replace fossil fuels, in either developing or developed economies. Governments should indeed adopt an affirmative action by enforcing carbon taxes to limit use of fossil fuels as well as subsidizing investment, funding R&D efforts, and promoting consumption of renewable energies. Multilateral alternative energy develop­ments will probably be necessary to fully address the CO2 emission objectives of the Copenhagen Agreement and the Kyoto Protocol—and extensive cultivation of algae could play a central role in that process.

Acknowledgments

This work received partial funding from project MICROPHYTE (ref. PTDC/EBB-EBI/102728/2008), coordinated by author F. Xavier Malcata and under the auspices of ESF (III Quadro Comunitario de Apoio) and the Portuguese State.

A postdoctoral fellowship (ref. SFRH/BPD/72777/2010), supervised by author F. Xavier Malcata and cosupervised by author Isabel Sousa-Pinto, was granted to author A. Catarina Guedes, also under the auspices of ESF. A Ph. D. fellowship (ref. SFRH/BD/62121/2009), further supervised by author F. Xavier Malcata and cosupervised by author Isabel Sousa-Pinto, was granted to author Helena M. Amaro, again under the auspices of ESF.