The favourable growing temperatures and vast areas of undeveloped land found in the tropics have led to speculation that this technology could offer sustainable energy and an economic boost to the developing world.
But a study published in Energy Policy this month (6 July) suggests that developing nations lack the scientific know-how to turn such biofuels into reality.
Biofuels made from crops such as maize and palm are an established renewable energy source, but have been criticised for taking up farmland and contributing to climate change.
Recent interest has therefore been focused on biofuels that require no arable land as they are made from microscopic algae grown in water.
Now, researchers have analysed literature on algae biofuels, highlighting uncertainties and concerns relating to energy production levels and the technology's commercial viability.
These concerns include the need for large-scale production for it to become economical, and high plant and infrastructure costs. They also include scientific uncertainties surrounding variables including how the choice of algae species, their growth rate and growing environment affects energy production. Many such variables are estimated and can then lead to over-optimistic projections, the study says.
Then, by analysing the quantity of journal publications and patents around the world, the researchers were able to assess developing countries' research capacity for algae biofuels.
"As far as things look now, algae biofuel production is not the best option for developing countries because they don't have the capacity even to do the research," the study's lead author and research fellow, Ademola Adenle, tells SciDev.Net.
While the United States and Europe produced 70 per cent of all related research publications between 1974-2010, Africa and South America were only responsible for two per cent each, despite their favourable locations for growing algae, the paper says.
This indicates that many developing nations are insufficiently involved in the development of this potentially useful technology, it adds.
“Algae biofuel production is not the best option for developing countries because they don't have the capacity even to do the research.”
Adenle argues that several technical and institutional challenges must also be overcome before the algae biofuel industry can take off in developing countries.
He says that developing countries need to develop research capacity and legal frameworks to support the introduction of patented technology, following the approach of emerging economies such as Brazil, China and India.
While emerging nations such as China and India still produced a fairly low proportion of global publications related to algae biofuels considering their population size — at three and five per cent respectively — they did better than countries in Africa.
Adenle says these emerging economies at least have some sort of capacity and institutions in place to build their R&D in this area.
"We can't compare African countries with emerging economies such as India, Brazil and China that are more advanced, because their regulatory frameworks are equivalent to those of developed countries," he says.
The main challenge for African countries is to improve their institutions, Adenle says. "For any developing country to develop their own algae biofuel, they have to take a similar approach to that of Brazil, India and China, by investing in institutional capacity such as training and education," he says.
"Having a proper policy to support the introduction of new technologies is fundamental to the development of the industry. If developing countries don't prioritise this, then it makes it very difficult for the country, international organisations and companies to harmonise their agendas and work together."
Dheepak Maharajh, a senior scientist at the Council for Scientific and Industrial Research in South Africa, praises the study's assessment and highlights the need for further research to make algae biofuel viable.
"The crude oil industry evolved over 100 years to produce various higher-value products that make it profitable," he tells SciDev.Net.
"A similar approach is needed for algae biofuel where we extract its maximum value. Governments therefore need to continue to invest in research and take a long-term outlook for return on investment."
Link to study's abstract