When the subject of algae comes up in relation to biofuels,
it's usually concerning biodiesel. That's because algae are very high in oil content.However, one of the main reasons for interest in algae is that it grows fast and consumes a significant amount of carbon dioxide. With that in mind, there is no reason algae couldn't also be used to produce ethanol. A company called Algenol has refined strains of algae specifically for ethanol production in salt water. Algenol has submitted a grant application to the Department of Energy to build a pilot plant in cooperation with Dow. The plant, located next to a Dow facility in Freeport, Texas, will consume carbon dioxide produced by Dow's operations to grow the algae in bio reactors.
Dow intends to use ethanol primarily in the production of plastics to replace petroleum. However, the ethanol could be used as a fuel as well. Algenol hopes to get the production price of its algae ethanol down to $1 per gallon. Not only does the process consume carbon dioxide at the net rate of 1.5 million tons of CO2 per 100 million gallons of ethanol, it also transforms salt water into fresh water.
[Source: Algenol, Dow]