Algae are organisms that utilize solar energy and carbon dioxide (hereafter referred to as carbon) and, through photosynthesis, produce complex molecules and oxygen released into the atmosphere. Algae can be divided into two main groups: 1) microscopic unicellular, filamentous, or colonial algae, and 2) multicellular macroalgae. Another classification of algae is based on their pigment composition: green, red, and brown algae. Algae grow in various aquatic environments, including oceans, streams, lakes, and ponds, across a broad salinity range, from freshwater and brackish water to seawater and hypersaline lagoons. Algae can also be found within ice and thin layers covering rocks and soil. Microalgae and cyanobacteria together are responsible for nearly 50% of the photosynthesis occurring on Earth, despite collectively constituting less than 1% of the planet’s total biomass.

In addition to the ‘natural’ cultivation of algae in open systems (mainly ponds) or closed systems (e.g., pipes, tanks, or panels), a new cultivation technology, algae engineering, has emerged in recent years. Engineered algae are microscopic organisms that have undergone genetic modification through advanced biotechnological techniques to develop algae with enhanced or novel traits that do not exist in their natural state. Methods such as genetic editing using CRISPR-Cas9 and other synthetic biology technologies enable precise modification of the genetic structure of algae, allowing for their rapid and highly accurate production tailored to various needs, such as carbon capture, the development of sustainable alternatives to petrochemical products, and more (see below).

This document aims to provide a high-level overview of this emerging field, which is considered to have significant potential to contribute to climate change mitigation and adaptation. It follows an in-depth study on the use of emerging technologies under the umbrella of bio-convergence in climate-related contexts. As such, it focuses on engineered algae and does not cover general algae cultivation technologies and processes—an extensive and well-developed field in its own right.

Bio-convergence, a revolutionary approach that combines the strengths of life sciences, including biotechnology, with engineering and information technology, is a game-changer. It gives birth to innovative solutions that blend biological and non-biological systems to tackle modern challenges. Engineered algae, a shining example of bio-convergence, seamlessly blend biological systems – algae – with advanced engineering tools and processes, such as genetic engineering and editing. This technological fusion empowers us with an unprecedented level of precision and control over the desired characteristics of algae, circumventing the lengthy and unpredictable process of natural selection. This precision is the key to unlocking the full potential of bio-convergence.

The climate challenge is one of the most complex challenges that humanity has ever faced. Understanding the causes of climate change and finding solutions to prevent or halt global warming (mitigation) and solutions to cope with a new climate reality (adaptation) requires a multidisciplinary and creative approach. This is where disruptive technologies, such as bio-convergence technologies like engineered algae, come into play. These technologies have significant potential to contribute to addressing climate change, particularly in terms of mitigation. Among the primary applications of engineered algae, which will be elaborated on later, are carbon capture, fixation, and storage; biofuel production; and the use of algae biomass to create sustainable consumer products.

Algae engineering aims to modify them genetically and/or physiologically to optimize existing traits, enhance the efficiency of algae production processes, and even provide them with entirely new capabilities. This is a multi-step process:

Before any genetic modification, the algae genome is studied, and the genes relevant to the desired traits are identified. This is done using advanced bioinformatics tools that analyze the algae’s genes and heterologous genes (genes originating from other organisms) that may help achieve the desired outcomes. These traits may include growth rate, metabolic pathways, resistance to environmental stress, and the production of oils and hydrocarbons. Once the relevant genes are identified, biosynthetic technologies such as CRISPR-Cas9 are used to introduce new genes or manipulate existing ones with high precision, allowing researchers to create algae strains tailored to specific needs. For example, genetic manipulations can be performed on genes related to carbon fixation so that algae can absorb and store more significant amounts of carbon. By modifying the algae genome, researchers can enhance oil production or adjust oil profiles, leading to optimal biofuel production. Algae can also be genetically modified to produce polymers for bio-plastics, among other applications.

After genetic modification, the various strains are cultivated in controlled environments, primarily using bioreactors. Through multiple iterations, researchers can select the strains that exhibit the best results relative to the desired traits and focus on them for subsequent stages. It is important to note that growth conditions are also optimized. Various factors, such as photoperiod and light intensity, aeration, carbon dioxide concentration, nutrient and water availability, and even the bioreactor design, are carefully calibrated to ensure that the algae grow optimally in alignment with the targeted outcomes.

Carbon Capture and Storage

One of the most significant advantages of algae is their natural ability to perform photosynthesis, which absorbs atmospheric carbon dioxide and releases clean oxygen. In this sense, algae serve as an essential tool for carbon capture. By developing engineered strains of algae, this process can be enhanced, enabling algae to absorb carbon in larger quantities and with greater efficiency than ‘natural’ processes.

Combining direct air capture (DAC) facilities with engineered algae ponds creates a dual carbon capture mechanism: DAC systems capture carbon and transfer it to algae ponds, providing an enriched nutrient source for the algae while mitigating the accumulated carbon. Another possibility is the direct integration of engineered algae with industrial plants emitting large amounts of carbon, facilitating local air purification and carbon capture.

Various estimates exist regarding the carbon capture potential of engineered algae. Roughly speaking, while ‘regular’ algae can fix carbon at a rate twice their biomass (i.e., 1 kg of algae can fix approximately 2 kilograms of CO₂ per day), engineered algae have been reported to fix between 10 to 50 times their weight in carbon.

Despite this potential, several specific barriers are hindering the progress of this field (detailed below in addition to the general barriers discussed later in the review):

• Technology that enables the engineering, production, harvesting, and processing of engineered algae at a significant scale is still being developed, as current production is primarily conducted on a small scale.
• Production variability and high costs.
• Inefficient use of natural resources, particularly the high energy consumption required for production processes, impacting both production costs and the ecological footprint.
• Regulatory constraints (or lack of appropriate regulation) on using genetically modified organisms (GMOs) negatively affect the motivation for R&D and investments in the field.
• Negative public perception of genetically modified organisms discourages investment and R&D in this sector.
• Environmental concerns regarding the potential ‘release’ of engineered algae into natural habitats could lead to ecological disruptions.

Due to these barriers, most development in this area is currently conducted at relatively small production sites and has yet to reach commercial scale. Additionally, compared to other applications of engineered algae, this specific sector features only a small number of companies.

However, several companies and initiatives are active in this field: Global Algae Innovations – a company engaged in engineering and producing algae for various applications, including biomass production and carbon fixation; HeliosNRG – a company specializing in R&D and consulting for algae-based solutions, with a focus on carbon capture; and Montana State University – Energy Research Institute – an academic center conducting R&D on carbon capture and fixation as part of a broader focus on energy research.

Biofuel Production

Algae can serve as a sustainable energy source. They can be engineered to produce larger quantities of oils and hydrocarbons, which can be converted into various biofuels, such as biodiesel, bioethanol, and biogas. When burned, these fuels release less carbon compared to fossil fuels. The carbon released during the combustion of biofuels is equal to the amount of carbon absorbed by the algae during its growth process, making the entire process nearly carbon-neutral.

The production cost of fuel derived from engineered algae is still undefined, and different estimates show significant variability. This variability stems from differences in production methods and the currently limited ability to produce fuel on a large scale.

One project, the Marine Algae Industrialization Consortium at Duke University in the United States, aims to achieve a production cost of $5 per gallon (approximately 4.5 liters) for algae-based fuel at a commercial scale. Still, the path to reaching this goal remains long. Several recent studies have estimated costs between $20 and $50 per gallon. Although biofuel production is one of the most attractive applications of engineered algae—mainly due to the expected market size – several key barriers still exist:

Compared to other applications of engineered algae, this specific sector features a relatively large number of companies due to the potential market size. Several companies and initiatives are active in this field: Accelergy Corporation – a company specializing in the production of synthetic liquids and low-carbon fuels using biomass (including engineered algae) and natural gas; Global Algae Innovations – a company engaged in engineering and producing algae for various applications, including biofuels; Neste – a company developing renewable materials, including engineered algae, for multiple applications, with a focus on biofuels and sustainable aviation fuel (SAF); Arizona Center for Algae Technology and Innovation – an academic center conducting R&D to advance algae engineering, particularly for renewable energy applications; National Renewable Energy Laboratory and Los Alamos National Laboratory – academic centers conducting R&D on the use of algae engineering for biofuel applications; Sandia National Laboratories – a U.S. government research institution engaged in R&D on algae engineering for various applications, with an emphasis on fuels; Matsuri (Microalgae Towards Sustainable & Resilient Industry) – a consortium of 35 major Japanese companies, managed and partially funded by the Japanese government, promoting R&D on algae applications (including engineered algae), primarily for green energy purposes. The algae farms are located in Malaysia, while major corporations are mainly involved in ensuring demand for algae-based energy and related products.

Biomass Production

The use of algae biomass to produce sustainable products: Engineered algae can create a wide range of environmentally friendly products, especially compared to existing alternatives. For example, algae can be engineered to produce rapidly biodegradable bioplastics, pharmaceuticals, and animal feed. In addition to making manufacturing processes more eco-friendly, these products may also reduce the demand for petrochemical-based materials, whose production is highly carbon-intensive. Furthermore, algae waste from biofuel production can be repurposed by incorporating it into the soil, thereby improving soil health and increasing carbon sequestration potential.

As with other applications mentioned, the production costs of engineered algae biomass vary significantly, depending on cultivation methods (e.g., water-based growth or bioreactor cultivation). The cost estimates remain inconsistent. The market-related barriers are similar to those discussed earlier, but for fast-moving consumer goods (FMCG), two additional key challenges include:

• Strict regulations on genetically modified organisms (GMOs), particularly concerning pharmaceuticals and food products.
• Public perception, including scepticism and concerns regarding genetically modified products.

Additionally, the market remains underdeveloped regarding the entire value chain, making the production and distribution of such products economically unviable and less competitive than other products perceived as healthy and environmentally friendly.

Several companies are noteworthy in this field: Global Algae Innovations, previously mentioned, is involved in algae engineering and production for various applications, including food, animal feed, and polymers; Neste, also mentioned earlier, develops renewable materials, including engineered algae, for polymer and chemical production; Arizona Center for Algae Technology and Innovation conducts R&D on food and animal feed applications; and Algae4IBD, a program funded by the EU Horizon initiative, promotes R&D on the use of algae for medical applications.

Carbonate Salt Production

The production of carbonate and bicarbonate salts: Some algae strains can be engineered to produce carbonate and bicarbonate salts, which stabilize carbon in solid form. This provides an additional method for carbon capture from the atmosphere. However, this field remains highly niche, and limited commercial data is available on its viability.

The global algae market was valued at approximately $21 billion in 2022 and is projected to reach around $45 billion by 2030, reflecting a compound annual growth rate (CAGR) of about 10%. Algae-based human nutrition products account for about one-third of the market, while animal feed constitutes one-quarter. The remaining market share is distributed among algae-based biofuels, chemicals, cosmetics, and fertilizers. Regarding growth projections, the two fastest-growing segments (each expected to grow at around 10% CAGR) are food and dietary supplements for humans and animals and the algae-based biofuels market. However, significant growth is also anticipated in other segments, as Verified Market Research, Coherent Market Insights, and The Business Research Company reported.

Several trends support this optimistic growth outlook:

• There is an increasing focus on addressing climate change, from developing carbon capture capabilities to restoring biodiversity through biological means (bioremediation) and producing and consuming sustainable products.
• The growing motivation to find sustainable alternatives to fossil fuels.
• The broad range of potential applications, spanning both industrial and consumer markets, that can be developed using engineered algae.
• Technological breakthroughs, particularly in genetic engineering tools and synthetic biology, and the emerging integration of phenomics with artificial intelligence, emphasize machine learning. These advancements enable the production of genetically stable, resilient, and industrially optimized algae strains.
• There is an increasing interest in sustainable alternatives to traditional animal feed.
• The growing governmental involvement in promoting the sector at a national level, as seen in increased R&D funding for engineered organisms and policy initiatives supporting circular economy principles and a more enabling regulatory environment.

Several key barriers prevent the field from realizing its full potential:

First, development and production processes are complex, expensive, and resource-intensive. Laboratory equipment required for R&D, such as scanning and optimizing the best-performing strains—costs highly. Before commercial-scale cultivation, numerous pilot studies are necessary to determine whether the desired outcomes can be achieved under real-world simulated conditions. The cultivation of algae itself is also expensive:

• Establishment and maintenance of infrastructure (e.g., bioreactors and ponds).
• Creation and maintenance of the growth medium, including essential nutrients such as nitrogen, phosphorus, metals, and water.
• High energy consumption is required to operate these systems.
• Harvesting (or collection) of algae requires advanced equipment, such as centrifuges with high energy consumption.
• Filtration and flocculant systems—compounds used for algae collection, drying, and separation from the aqueous environment.
• Purification processes to ensure that the final product meets required cleanliness standards.
• Residual waste management.
• Ongoing control of invasive species, prevention of viral infections, and ensuring the stability of engineered algae strains over time. Due to these factors, the cost of the engineering process can be volatile, particularly in response to fluctuations in raw material prices.

Second, gaps in genetic knowledge about algae complicate targeted genetic interventions. Modifications to specific biological components of algae can trigger chain reactions that are not yet fully understood. For example, manipulations related to light exposure do not affect all cells equally at different depths within the algae, and epigenetic changes can create discrepancies between phenotypes and genotypes. The complexity of the process is further evident in the need to integrate algae production with other systems, such as energy networks or waste treatment systems.

Third, inconsistency in technological maturity. Due to the complexity of the research, development, cultivation, and distribution processes involved in engineered algae, it is difficult to precisely determine the field’s Technology Readiness Level (TRL). Some components are at a relatively high level of technological maturity, while others are not yet fully developed. As a result, the field is estimated to range between TRL 3 and TRL 8.
Specific applications, such as algae-based consumer products (e.g., dietary supplements and pigments), have reached a high TRL 7–8, meaning they are in advanced commercial production stages. Other applications, such as engineering algae strains for increased lipid production or optimized fatty acid profiles, are at TRL 4–6. While pilot studies have consistently demonstrated promising results, challenges such as high water consumption, algae nutrition costs, and efficient use of secondary byproducts hinder the establishment of a profitable business model at a commercial scale.
More advanced innovations, such as flocculation for microalgae harvesting or forward-osmosis filtration in algae production, have not been viable for large-scale commercial production. A more accurate evaluation of the entire ecosystem—including development, production, and commercial use – requires case-specific research for each component while considering regulatory maturity, integration with existing systems (e.g., alternative energy sources), and consumer readiness to adopt engineered algae-based products.

Fourth, various technological and economic challenges remain in biofuel production, including algae-based fuels. Expanding production and usage of biofuels will require significant infrastructure investments in R&D, production, transportation, distribution, and the development of vehicles capable of running on biofuels.

The engineered algae sector is regulated in the United States under several existing biotechnology regulatory frameworks, primarily the Toxic Substances Control Act (TSCA). This law grants the Environmental Protection Agency (EPA) the authority to review new microorganisms, including engineered algae, before their production or import into the U.S. However, the level of scrutiny may vary depending on several factors, such as the level of innovation (i.e., how new the technology is) and the potential risk posed by a specific algae strain.
While TSCA serves as the primary regulatory foundation, other U.S. regulations may apply depending on the intended use of engineered algae. For example, the Federal Food, Drug, and Cosmetic Act (FD&C) regulates their use in food, pharmaceuticals, and cosmetics. In contrast, the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) may apply if used as biological pesticides.

The European Union treats engineered algae under its strict regulatory framework for genetically modified organisms (GMOs), including engineered algae, as defined in Directive 2001/18/EC. This directive establishes monitoring procedures for GMO products and imposes labeling requirements under certain conditions, for example, when engineered algae constitute a significant component of food products.

This review examined the emerging algae engineering technology, which enables the modification and enhancement of various algae traits, producing algae with improved characteristics. Specifically, we explored the potential of these algae in supporting the global fight against climate change.

We outlined the technological processes that enable algae engineering and highlighted their potential climate-related applications, including:

• Carbon capture and storage through natural photosynthesis and the potential to maximize carbon sequestration via genetic engineering
• Biofuel production, where combustion offsets carbon capture, enabling carbon-neutral fuel consumption
• Algae biomass production and its potential applications in consumer and industrial sectors (e.g., bioplastics, animal feed, and more)
• Carbonate salt production

Additionally, we discussed the barriers that hinder the widespread adoption of engineered algae, including high production costs, knowledge gaps regarding algae behavior under specific genetic modifications, inconsistency in technological maturity due to the use of diverse technologies, lack of supporting infrastructure (vehicles and factories) for algae-based fuels, negative public perception of genetically modified materials, and regulatory restrictions.

An analysis of Israeli companies in this field shows that market growth in Israel varies, with most companies established in the past ten years. The Israel Innovation Authority has invested in 75% of companies specializing in algae engineering and 43% of companies involved in the broader algae sector.

The potential of engineered algae to mitigate climate change is significant, primarily due to their ability to serve as a sustainable alternative to fossil fuels, alongside their carbon capture and storage capabilities.

In the coming years, we can expect growth in engineered algae, both in technological maturity and in the expanding range of applications. This projection is driven by increasing national and private sector motivation to develop new climate solutions and reduce dependency on fossil fuels. Additionally, integrating advanced technologies, including genetic engineering tools and AI, will enable the development of genetically stable and resilient algae strains, further expanding their industrial applications and contributing to the sector’s growth.

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* All information provided in this article is correct as of the date of writing and according to the data available to the author. The Innovation Authority or anyone on its behalf is not responsible for the accuracy, truthfulness, and precision of the data, in whole or in part. The article is published for the public’s benefit, and no commercial use should be made of it, including for its sale, distribution, or presentation.