The financial feasibility of microalgae biodiesel in an integrated, multi-output production system

The stagnant development of microalgae-based industries suggests a need for a broader assessment of its commercial potential, particularly given its ability to utilize industrial waste effluents in cultivation and produce multiple outputs from the biomass, including an environmentally superior biofuel. This study assessed the financial feasibility of producing microalgae biodiesel from transesterification, together with feed and fertilizer in a multi-output production system, integrated with a complementary waste-producing industry. The multi-output system allowed for the price of biodiesel to be sold at the competitive market price of US$1.50/L rather than US$24.18/L, if it were produced as the only primary output. The high-value feed and fertilizer offset the low revenues of biodiesel to ensure the financial feasibility of the production system. Sensitivity analyses of these estimates indicated where improvements could further increase the financial appeal of this multi-output microalgae production system. In particular, a 20% improvement in the cost-efficiency of lipid extraction and transesterification processes was found to have a 17-fold increase in the net present value. The results suggest that multi-output systems have several benefits for the potential of a microalgae-based industry, namely the synergistic benefits of integrating microalgae production with complementary industries and the investment appeal of microalgae-based biofuels that can be priced competitively while still being financial feasible. Although alternative conversion processes (e.g. fermentation and thermochemical routes) would be key to the increased cost-efficiency of biofuel production, the development of integrated multi-output microalgae industries could prompt private and more importantly, policy-led investment in development of the industry