Algae are among the fastest growing plants in the world, and about 50% of their weight is oil. That lipid oil can be used to make biodiesel for cars, trucks, and airplanes. Algae will some day be competitive as a source of biofuel.

Only renewable biodiesel can potentially completely displace liquid fuels derived from petroleum. The economics of producing microalgal biodiesel need to improve substantially to make it competitive with petrodiesel, but the level of improvement necessary appears to be attainable (Demirbas 2009b).

Biodiesel has great potential; however, the high cost and limited supply of re­newable oils prevent it from becoming a serious competitor with petroleum fuels. As petroleum fuel costs rise and supplies dwindle, biodiesel will become more at­tractive to both investors and consumers. For biodiesel to become the alternative fuel of choice, it requires an enormous quantity of cheap biomass. Using new and inno­vative techniques for cultivation, algae may allow biodiesel production to achieve the price and scale of production needed to compete with, or even replace, petroleum (Campbell 2008).

It has been estimated that 0.53 billion m3 of biodiesel would be needed to replace current US transportation consumption of all petroleum fuels (Chisti 2007). Neither waste oil nor seed oil can come close to meeting the requirement for that much fuel; therefore, if biodiesel is to become a true replacement for petroleum, a more productive source of oil such as algal oil is needed (Scott and Bryner 2006; Chisti 2007).

The cost of producing microalgal biodiesel can be reduced substantially by us­ing a bioreflnery-based production strategy, improving capabilities of microalgae through genetic engineering and advances in photobioreactor engineering. Like a petroleum refinery, a biorefinery uses every component of the biomass raw ma­terial to produce usable products (Chisti 2007).