The rapid commercial expansion of the algal biofuel industry is an excellent example of sustainable product development with dramatic future potential for contributions to fuel sup­plies, yet many questions regarding algae production remain unanswered. The state of knowledge regarding the potential environmental impact of the production of algae and algae-derived biofuels continues to be incomplete, fragmented, and largely obscured by proprietary concerns. However, this knowledge is changing rapidly, facilitated by research and industry and driven by economics. Commercialization of the production of algae — derived biofuels as part of the overall biofuel industry will have a profound future impact on society. Waste products that are currently discharged into the environment as contami­nants will be utilized to produce much-needed renewable energy sources. Now is the time to initiate the development of an algae industry evaluation methodology that allows for the advancement of knowledge and evaluation tools for authorities to best understand the potential implications (Menetrez, 2012).

The process of generating biofuel from algae involves the growth, concentration, separa­tion, and conversion of microalgae biomass, some of which can be genetically altered. After separating the desired biofuel product or products from the microalgae biomass, a significant portion of byproduct remains. It is important that the remaining byproducts have a useful and safe purpose for the economic feasibility and environmental sustainability of the process. Post-extraction byproducts must be used efficiently and completely. Since no biofuel is car­bon-neutral in the current scenario, significant fossil-fuel input is needed for growing, processing, and extracting the oil, which might offset the positive aspects of the algal biofuel (U. S. DOE, 2006).

Microalgae hold great promise as starting materials for biofuel production, but signifi­cant challenges exist for the developing industry. Present economy-of-scale differences between the algal oil industry and the petrochemical industry are immense and will require significant investment in the form of government-funded incentives for liquid fuels de­rived from microalgae. The present microalgae manufacturing industry is very small at only 5000 tons y-1 (Pulz and Gross, 2004). It is almost completely devoted to synthesizing high-value nutraceutical products and is not extensively engaged in the mass production of high oil-containing microalgae. In addition, microalgae require significantly higher levels of nitrogen than terrestrial plants to achieve effective growth rates, which increases the cost of production (Brezinski, 2004).

Moreover, microalgae do not achieve concentrations at maturity in their natural aqueous growth media >1 wt%. Therefore, to become a significant industrial commodity in terms of cost and scale, growth and harvesting technologies need to be developed that can econom­ically provide higher concentrations required for industrial-scale processing operations. Actual extraction processes for lipids and lipid-derived materials require considerable improvement. Essentially, any process suitable for commercial consideration must not dry algae by evaporating water. The energy input to evaporate water is significant, and the heat energy input required will, with very few exceptions, be greater than any energy output that can be obtained by combustion of the dried material (Heilmann et al., 2011).

Although algal biofuels possess great potential, profitable production is quite challeng­ing. Much of this challenge is rooted in the thermodynamic constraints associated with producing fuels with high energy, low entropy, and high exergy from dispersed materials (Beal et al., 2012).

One of the difficulties with using conventional gasification technologies for converting high-moisture biomass such as algae is the low thermal efficiency that results from the need to vaporize the water in and with the feedstock. Thus, conventional biomass gasification pro­cesses require a dry feedstock. Of course, energy is still required to do this drying prior to gasification, and the energy needed here offsets some of the energy gained by producing the gaseous product. Gasifying wet biomass in supercritical water is a means of circumventing this energy penalty (Guan et al., 2012).

In addition to these holistic challenges, some of the other challenges with respect to the reactors and catalyst are as follows: Due to the high pressures needed for processing, special reactor and separator designs are required. The process has to be designed in a way that can handle solids loading in excess of 15-20 wt% and handle feedstock with impurities. Proper heat-recovery systems have to be designed because the reactors operate at very high temper­atures in pressurized conditions. Feeding at high pressures into the reactor is always a chal­lenge and is a major problem in small-scale plants. In the case of heterogeneous catalysts, the catalyst has to be robust and should not deactivate easily due to the formation of coke. If ho­mogeneous catalysts are used, they must be recovered at the end of the process and reused again. Another most important phenomenon that occurs is the wall effect, which can cause serious problems after scaling up if not understood at lab-scale level (Peterson et al., 2008).

With respect to the conversion methods, effective heat and mass transfer is required for the proper conversion of feedstock into the desired products. This requires advanced design of reactors used for conversion and preparation of hybrid catalysts.

Acknowledgments

The authors thank the Director, Indian Institute of Petroleum, Dehradun, for his constant encouragement and sup­port. RS thanks the Council of Scientific and Industrial Research (CSIR), New Delhi, India, for providing a senior research fellowship (SRF). The authors also thank the CSIR for financial support.