The problem with integrating microalgae biodiesel production with any high value coproducts or byproducts, such as pigments, vitamins, or specialty chemicals, is that these would be produced in very large amounts, saturating any likely markets. And, of course, the requirements for producing such high value products are quite different from the needs for biomass fuels. One example for coproducts comes from fuel ethanol production from corn, which is economically dependent on animal feeds (distillers dried grains), byproducts for economic viability, in addition to the more than $1/gallon in subsidies. Indeed, only large byproduct markets, such as animal feeds, could be realistically considered in the context of biodiesel production. However, although it may be possible to coproduce proteins with algal lipids, such an optimization (e. g., for high protein feeds) is likely to be difficult. Another major problem, as in distillers dried grain, is the drying costs. Overall, higher-value feed coproducts cannot, and should not, be a major driving force in developing this technology.

Of course, the likely route for the future development of practical and commercial large-scale microalgae culture technology will be through development of specialty foods and animal feeds coproduction. For example, Spirulina with two farms in the United States, comprising more than 100-ha of ponds, is becoming a commodity product, with bulk prices declining by almost half

(from the high 20s to the mid teens in dollars per kg) during the past 2 years. If this trend were to continue, to below $10/kg, this algal biomass could become a significant ingredient in aquaculture and other specialty animal feeds. Larger-scale systems for poultry feed production (microalgae high in xanthophylls, for example), or even cattle and hog feeds, could be foreseen, but require a decrease in costs (prices) to about $1,000/ton.

But to be considered for fuel production, costs for microalgal biomass production would need to be reduced to the absolute minimum. This implies that productivities must significantly increase, and costs decrease from current levels. We argue that any future technology development effort for microalgae biodiesel production should exclude higher value byproducts or coproducts as a specific target. We believe that the needs of biodiesel production, specifically for high lipid productivities, must be the objectives of such a program. One exception is the combination of such a process with wastewater treatment, as there are few likely alternative uses for the biomass. The other is the utility of such processes in greenhouse gas mitigation, also the objective of the Japanese R&D program in microalgae CO2 utilization, discussed briefly in the following section.