The EU boosts support for algae businesses

Algae has gained a huge profile under EU strategies for sustainable economic development. We look at why this feedstock is gaining visibility and how bio-businesses working with it can get support.

Algae is among most abundant, diverse, chemically rich, and low-input feedstocks. Bio-based startups working with these organisms have become targets of EU green investment over the last ten years and the EU Commission has supported at least 300 algae-related projects so far.

Because algae and its chemical derivatives have so many end applications, startups and product developers can potentially find support across many different EU-wide policy frameworks: the EU Green Deal, Farm to Fork, the EU Sustainable Blue Economy Communication, the Green Deal, or a combination. 

Then there is the 2022 EU Algae Initiative, the region’s first targeted programme to develop a large-scale algae industry that can serve multiple goals under each of these sustainable development frameworks. This programme will research methods of algae cultivation and processing and help bring new technologies across the value chain to market.

Here’s a guide to why algae is gaining visibility in the EU and which initiatives entrepreneurs working with this biomass can turn to. 

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Algae’s importance to Europe’s blue economy

The algae industry has climbed the EU agenda over the past decade thanks to the region’s broader commitment to strengthening the blue economy – an umbrella term for any economic activities that rely on oceans, lakes, rivers, and the biological resources found therein.

A subsector of the blue economy is the blue bioeconomy, industries whose supply chains begin with taking biomass from aquatic ecosystems, like algae, invertebrates, plants, or fish.

Historically dominated by the fisheries and the seafood sector, a more recent branch of it is something that the EU refers to as ‘blue biotechnology’. The OECD defines this as the application of science and technology to living aquatic organisms for the production of knowledge, goods, and services. 

Blue biotechnology today has a strong sustainability dimension. Many companies working in this sector have built circular business models, using biological waste normally thrown out by the sea food industry as their feedstock.

From blue growth to blue sustainability

EU support for blue technology began under its 2012 approval of the EU Blue Growth Strategy, a Europe-wide economic development strategy aiming to expand the coastal and maritime industries. 

Algae-based blue biotechnology loomed large in this early EU attempt to grow the blue industries. One of the projects that the EU Blue Growth Strategy invested into was the Brittanny region’s Smart Specialisation Strategy, which explored new ways of using macro-algae (algae large enough to be visible to the naked eye, like kelp) and micro-algae (microscopic algal organisms) in new domains like food, health, cosmetic, biofuels, and green chemistry sectors. 

The Blue Growth Strategy morphed into the 2021 Sustainable Blue Economy Communication – a sign of the times insofar as the former emphasis on growth has given way to concerns for sustainable exploitation. The updated blue economy strategy has retained focus algae, except here the emphasis was on sustainable modes of algae production.

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Algae as a sustainable feedstock for Green Deal industries

The European Green Deal of 2020 shifted the blue bioeconomy and marine biotechnology within it from being one economic development strategy among many to a central pillar in regional paths to sustainable prosperity.  

As the EU Commission has quipped, “there just can’t be green without blue”, in recognition of how the nature of aquatic resource exploitation will make or break its climate goals. Aquatic ecosystems generate 50% of oxygen and absorb 30% of carbon emissions on earth, supporting blue businesses that conserves its essential ecosystem functions is essential. 

For the architects of the Green Deal, marine and algal biotechnology also open a path to more sustainable land-based economies. New ways of transforming aquatic biological resources could open a wider range of renewable feedstocks for chemicals and material manufacturers that today depend on petrochemicals.  

The climate payoff of marine biotechnology is not limited to cutting industrial fossil feedstock use. The possibility that chemicals or materials could come from renewable marine resources can also help reduce the amount of land that needs to be brought under intensive cultivation.  

The damage associated with petrochemical extraction and processing are well known but intensively cultivating feedstock for renewable manufacturing can also put strain on the environment. Opening up aquatic biological resources provides a feedstock source for industry that can relieve land use problems. 

Responsibility for developing the blue bioeconomy is now shared between the 2012 EU Blue Growth Policy and the European Green Deal, reflecting how the sector forwards traditional economic targets like creating jobs and expanding industry alongside new climate targets.

EU Funding for algae entrepreneurs 

The European Green Deal recognises that algal biotechnology is a young, untried sector that needs different types of support. Hurdles to commercialisation are not just limited to scaling cultivation and processing methods but clarifying the still-hazy regulations around marketing algae-based goods and quality standards for biomass feedstock.

Algal entrepreneurs looking for support should first turn to the InvestEU Blue Economy Fund/BlueInvest. The accelerator is targeted at blue bioeconomy businesses all along the value chain, including those working with algae. 

InvestEU Blue Economy Fund’s main role is to advise external private impact investors on which small to medium-sized blue economy projects they should be putting their money into. So far, the fund has secured 26 blue economy projects with investment and has locked in €500 million of private investment dedicated to growing the sector. Currently, it has 21 algae-related projects in the pipeline. 

However, InvestEU Blue Economy also goes beyond attracting financing. For algae farmers, InvestEU Blue Economy Fund is developing a new toolkit to guide entrants to the sector on best cultivation practices. It is also funding projects for career reorientation so that the algal sector attracts new talent. 

Since building new industries and markets is as much a regulatory task as one of guiding investment, the InvestEU Blue Economy Fund is working with the European Committee for Standardisation to develop standards for algae ingredients. This will provide growers and processors with more certainty on the quality they should be aiming for with their crop and products. This work includes defining the maximum level of contaminants acceptable within them.

Networking and knowledge sharing

Another EU organisation supporting the algal biotechnology and algal cultivation sector is the European Algae Stakeholder Forum (EU4Algae Forum). Founded in February 2022, this is a space for anyone involved in or and affected by the algal industry to network, gain and offer peer support, and share business intelligence. It is also a centralised information hub on any algae funding calls released by the EU.

The EU4Algae Forum features 7 different working groups for knowledge exchange tailored to different sub sectors of the algal economy. The Microalgae Production working group for example concentrates the latest research on cost-effective, sustainable microalgae cultivation. 

The Microalgae Production working group is also working out criteria for certifying biomass quality alongside guidelines for algae farmers on what kinds of characteristics their biomass needs to sell into the food industry versus industrial uses like waste remediation. 

The industrial possibilities of algae is still an open area of research. For this reason, the EU4Algae Forum also maintains the SeaStrains database, a member-updated list of functional seaweed strains. 

The Algae Initiative

The founding of EU4Algae led promptly to Europe’s first policy statement devoted to developing the European algae sector –  the 2022 EU Algae Initiative. Its task is to develop  the algae sector to serve goals under the Green Deal, Farm to Fork Strategy for sustainable agriculture, and the Sustainable Blue Economy Communication. 

In its statement of policy, the EU Algae Initiative says it has four aims: to improve governance framework and legislation, to improve the business environment, to close knowledge and innovation gaps, and increase social awareness and market acceptance of algae products in the EU.

Again, one focus of the EU Algae Initiative is on boosting the amount of cultivated feedstock in Europe by developing and refining sustainable cultivation methods. 

In Europe, innovation in high value chemicals from algae has tended to run ahead of advances in algae cultivation, which remains far less developed than in Asia.

European bio-businesses still rely mainly on harvesting wild stock but expanding the algal biotechnology sector demands scaling in algae aquaculture. Wild stock exploitation is unsustainable and would not be able to supply specific species in large enough volumes for industrial needs. 

As a result, an important part of the Algae Initiative is focused on increasing productivity in algae cultivation through innovative equipment such as cultivation and processing systems and monitoring probes to reduce biomass loss and labour costs.

As part of its efforts to boost the volumes of biomass that processing industries can access, the initiative is also looking at ways of valorising toxic algal blooms. These are thick clusters of wild microalgae that form when rivers and oceans are affected by fertiliser pollution. The Algae Initiative will prototype a harvesting machine to collect these cyanobacteria scum and macroalgae mats, as well as methods of turning excess microalgae into a feedstock source. 

The Initiative will also hammer out detailed standards on biomass quality, something that biomass cultivators will need to develop cultivation systems that can meet the demands of the market. Defining biomass quality will build on the standard-setting work that the EU4Algae Forum has been doing. Another approach by the initiative to improve the quality of material produced by the algae industry is to innovate in biorefinery equipment. 

Algae processing also needs to be made more viable, and the best way to achieve this is to work out multi-stream processing methods capable of making different products from the same feedstock at one site. This will extend an existing project by the Bio-Based Industries Joint Undertaking, MULTI-STR3AM, which is supporting scale-up and cost-lowering in microalgae cultivation

As for business financing, the Algae Initiative will work through the existing InvestEU Blue Economy Fund/BlueInvest to support SMEs and projects in the algae sector. However, the Commission is also continuing to explore what further algae-related funding it can dispense. 

Already, the Algae Initiative has earmarked funding for two projects under the DG MAre Work Programme 2023. These are geared towards setting up a regenerative EU algae industry, including through ocean farms. 

To stay updated on future EU funding calls relating to algae, join the EU4Algae Forum.

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