Algae is one of the leading renewable energy resources, which has obtained worldwide recognition as countries around the globe look to calm the distress associated with the emission of greenhouse gases. The international global algae market has laid its foundation on strategic collaborations by leading companies and expansion of production stations for algae-based products and algae cultivation. Sapphire Energy, Inc., Solazyme, Inc., and Algenol are key players that clasped a colossal market share of around 91.0% in 2015.
Asia Pacific Dominates with Towering CAGR
Further segmented into protein sales and pharmaceutical applications, docosahexaenoic acid (DHA) production is anticipated to be a dominant application segment throughout the forecast period 2016–2024. Algal biomass used for producing DHA finds extensive usage in preparing various protein-based nutritional and pharmaceutical products. The aviation sector will witness the capping of net carbon emissions as green energy resources encourage a carbon-neutral growth. Other segments on the basis of application include marine sector, road transport, bioplastics, and others such as biofertilizers and printing and textiles.
By cultivation technology, the open pond cultivation technology segment will dominate for most of the forecast period with over 80% of algal biomass generated on a global platform. Raceway, closed photobioreactors, and closed fermenter systems cultivation technology are other segments that the algae market is categorized into.
Geographically, Asia Pacific (APAC) is predicted to register a lofty CAGR, leaving behind North America, Europe, the Middle East and Africa (MEA), and Latin America. An estimated 40.0% of global carbon emission is attributed to Iran and key APAC countries, such as China, India, Japan, and Indonesia. Algal biomass and carbon capturing cultivation technologies will have significant demand in the APAC region. With more than 120 algae cultivation firms, North America tops the global algae market with regard to volume and value.
Increasing Renewable Energy Projects and Carbon Capturing Technologies Fortify Demand
Low wastewater treatment costs are an important driver for the algae market, which curtail the overuse of underground water resources available. In order to satisfy the increasing demand for freshwater resources due to rising industrialization and population growth, algae cultivation is encouraged globally. Most developed countries, such as the U.S., have strict rules to follow related to carbon emission. This has led to an enormous transition from fossil fuel-based energy resources to renewable ones. In fact, carbon dioxide and other waste flue gases are used to warm algae during cultivation. Algae biofuel, a fresh energy resource, has gained prominent growth as fossil fuel resources are being underused due to a significant demand-supply gap.
Affordable Crude Oil Prices and High Investments Arrest Growth
As the demand for algae-based products is eminently dependent on the prices of fossil fuels, the 50% drop in crude oil price prevailing since 2014 could cut back the rise of the algae market. Costly capital investments in R&D, high payback period, and few expensive cultivation technologies such as closed photobioreactors and closed fermenters are foretold to be the other restraints.
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Nonetheless, an increase in the number of production facilities and the development of novel technologies for algal biomass production are expected to extend rewarding market opportunities. The global market is also anticipated to demonstrate growth with government support for complete commercialization of algae-based projects to reduce carbon emission, cutthroat competition amongst major players, and advancing usage of renewable energy.