Climate change is a significant issue in today’s world. As accepted by the wider scientific, political and social communities, climate change is unequivocally—a greater than 90% chance—due to global warming caused by the activities of humans since the 1750s (IPCC 2007). Thus a project which absorbs CO2, a major contributor
to global warming, would play a significant role in combating climate change. The importance of the microalgal biodiesel production is underlined by the ability of microalgae to absorb carbon dioxide. Carbon capturing occurs in the cultivation phase of the algae biomass, where CO2 fixation occurs through the biological photo­synthesis reaction. This CO2 bio-sequestration has attracted attention due to the pos­sibility of converting this harmful waste into a valuable product.

The carbon and energy audits are focused on Australia (but applicable else­where), and used as a basis for all the discussions in this section. To reach the CO2 reduction targets, the Australian Federal Government has implemented two primary drivers: The National Greenhouse and Emission Reporting Act (NGER Act) which regulates and sets guidelines on how both Scope 1 (activity direct) and Scope 2 (activity dependent) emissions should be reported; and the Carbon Pollution Reduction Scheme (CPRS) which is the “cap-and-trade” scheme where emitters are required to purchase permits for their emissions.

Under CPRS, emitters who exceed certain limits are required to obtain permits for their Scope 1 emissions. For example, if Company A emits 10 tonnes of CO2-e above a certain limit, the company is required to possess 10 permits (each permit is equivalent to 1 tonne of CO2-e) (NGER Guidelines, 2008). The permit is either allo­cated to mitigate costs of the scheme to some key industries or auctioned to the highest bidder. There is a fixed amount of permits sold in line with the national emis­sion cap, with an initial selling price of $25 per permit [37]. Companies would pur­chase permits if their internal costs of abatement are higher than the price of permits, and would directly reduce their emissions if their internal costs of abatement are lower than the price of permits. It is expected that permit prices might rise to between $35 and 50 per permit by 2020 [37]. The microalgal cultivation process which cap­tures CO2 will reduce the overall Scope 1 emissions of an industry and convert this harmful waste into valuable products. By undertaking a complete audit on the pro­cess, the exact capturing ability of the process will be ascertained and analysed.