D1.2. Cost and Economic Feasibility Guide For Large Scale Microalgal Biorefineries

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Ares(2018)2756353 - 28/05/2018
D1.2. COST AND ECONOMIC FEASIBILITY

GUIDE FOR LARGE SCALE MICROALGAL
BIOREFINERIES
Date: May 30th, 2018

WP1. TECHNO-ECONOMIC ASSESSMENT
Task 1.2. Techno-economic assessment
Leader: BZN Participants: AQA, GEA
WP1. TECHNO-ECONOMIC ANALYSIS
Task 1.1. MARKET ANALYSIS
D.1.2. Cost and Economic Feasibility Guide for Large-Scale Microalgal Biorefineries.
INDEX
1. INTRODUCTION ........................................................................................................................... 3
1.1. REPORT DESCRIPTION ....................................................................................................... 3
1.2. KEY BENEFITS FOR SABANA STAKEHOLDERS ........................................................... 3
1.3. SOURCES OF INFORMATION ............................................................................................ 4
2. COMMERCIAL APPLICATIONS OF MICROALGAE ............................................................... 4
2.1. General overview .................................................................................................................... 4
2.2. High value products................................................................................................................. 5
2.3. Biofertilizers: biostimulants and biopesticides ........................................................................ 7
2.4. Aquaculture ........................................................................................................................... 10
2.5. Wastewater treatment ............................................................................................................ 11
2.6. SABANA approach ............................................................................................................... 14
3. MICROALGAE PRODUCTION CAPACITY ............................................................................. 15
3.1. Maximal biomass production capacity .................................................................................. 15
3.2. Available technologies .......................................................................................................... 16
4. ECONOMIC ANALYSIS METHODOLOGY ............................................................................. 22
4.1. Overall overview of the process ............................................................................................ 22
5. CASE STUDIES............................................................................................................................ 26
5.1. Biomass ................................................................................................................................. 27
5.2. Production of biostimulants, biopesticides, biofertilizers for agricultural uses..................... 27
5.3. Production of feed additives and aquafeed for aquaculture uses........................................... 28
5.4. Overall process ...................................................................................................................... 29
6. REFERENCES .............................................................................................................................. 30
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1. INTRODUCTION
1.1.REPORT DESCRIPTION
This report is part of SABANA project supported by EU Commission SABANA project under Grant
Agreement 727874. SABANA project aims at developing a large-scale integrated microalgae-based
biorefinery for the production of biostimulants, biopesticides and feed additives, in addition to
biofertilizers and aquafeed, only using marine water and nutrients from wastewaters (sewage, centrate
and pig manure). The objective is to achieve a zero-waste process at a demonstration scales up to 5 ha
sustainable both environmentally and economically. A Demonstration Centre of this biorefinery will
be operated to demonstrate the technology, assess the operating characteristics of the system, evaluate
environment impacts and collaborate with potential customers for use.
To achieve final microalgae-based products for agriculture and aquaculture, suitable to be

commercialized, it is necessary to develop optimally designed complete processes involving (i)
production, (ii) harvesting and (iii) processing of the microalgae biomass. The objective of this report
is to revise the major factors determining the economic reliability of microalgae based processes, and
to perform a critical analysis of the different scenario on which microalgae based processes are
competitive, moreover identifying the bottlenecks to enlarge the industry of microalgae based products
and services.
To perform this analysis, the first point is to define the boundary conditions of microalgae based
processes so that related with markets for biomass based products, then identifying the required
production capacity and price of the biomass on these markets. Next the maximal production capacity
as a function of environmental and operational parameters must be analysed, identifying the available
technologies and its cost. Thus, the feasibility of whatever process must be based on an economic
analysis, the rules to perform it being detailed. This methodology will be used to compare different
scenarios from high value to low value products, which will be compared with real processes
performed at commercial scale. Bottlenecks of large scale microalgae biorefineries will be thus
identified, then proposing solutions to improve it. Technologies for large scale biorefineries of
aquaculture and agriculture products using wastewaters will be in detail analysed because it is the
objective of SABANA project, evaluating the performance of these systems and major challenges to
be solved for the expansion of this type of processes. BIORIZON is the leader of this task and
responsible of the techno-economic analysis, in collaboration with other companies and institutions.
1.2.KEY BENEFITS FOR SABANA STAKEHOLDERS
The key benefits for SABANA Project stakeholders are listed here:
- This report provides an analysis of the current and potential markets for microalgae based
products and services, at industrial scale, which assist in identifying the optimal applications
and the key points to be considered when considering whatever new process.
- A revision of potential of microalgae to contribute to different markets based on its maximal
production capacity and available technologies, including their cost. This revision, based on a
deep bibliographical review in addition to expertise from companies, allows identifying the
most suitable applications of microalgae biomass.
- This report provides a general tool for the economic analysis of microalgae-based products
allowing identifying both the final biomass production cost and the major factors contributing
to it, thus identifying the opportunities to improve the profitability of microalgae based
processes.
- Detailed information about the optimal conditions to produce microalgae based products for
agriculture and aquaculture coupling with wastewaters treatment as objective of SABANA
project, identifying the boundary conditions on which these processes can be commercial.
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1.3.SOURCES OF INFORMATION
To prepare this report a large number of information sources has been used, from experience and
knowledge of the partners to bibliographic references and data from real facilities, and including
experimental data obtained during the first year of the project. Some highly relevant sources of
information includes books (Richmond, 2004), reports (Nrel, 1998; Pulz et al., 2013), papers, etc..
The structure of the report is thought to show a general vision of the economic feasibility of large scale
microalgae biorefineries. In this way,
(1) We analyse the commercial applications of microalgae, identifying the price and size of the
markets as first step to find the challenges and opportunities of microalgae based industry.
(2) We revise the potential of microalgae to contribute to these sectors in terms of production
capacity and cost, considering the actual technologies available but also the requirements of
resources (land, nutrients, energy, etc..).
(3) We propose a simplified scheme to perform economic analysis of microalgae-based processes

as tool for the comparison of different scenarios and allowing identifying the bottlenecks for
the development of new microalgae based biorefineries.
(4) We provide an in depth analysis of scenarios related with SABANA project, thus considering
the production of products agriculture and aquaculture using wastewaters as nutrients source,
that is used to make decisions along the entire project.
2. COMMERCIAL APPLICATIONS OF MICROALGAE

2.1.General overview
The current commercial applications of microalgae mainly include direct human uses as food,
cosmetic and nutraceuticals, in addition to speciality feeds for niche markets as aquaculture and pets
(Borowitzka, 2013b) (Figure 1). However, there are several emerging markets on which microalgae
also can contribute as on (i) the production of bio-fibres and commodities for the chemical industry,
replacing that from fossil origin, (ii) the production of biofertilizers, (iii) the bioremediation of liquid
and gaseous effluents, or (iv) including the production of biofuels (Milledge, 2011). The food-related
markets are actually consuming most of microalgae biomass worldwide produced, up to 20.000 t/year,
but including this production capacity is low for these medium size markets. This is one of the raisons
because the production of microalgae is growing up to 10% annually, to satisfy the large demand of
microalgae based products, and the price of the biomass is not decreasing. In spite of this high
demand, the actual market is dominated by small and medium size companies, close to the production
step, most of them located in Asia and USA, in addition to Europe.
Opposite, the second group of emerging applications have a much larger market size, also requiring
much larger production capacities which today are not feasible for this incipient industry. So, for a
single biodiesel facility a production capacity of 100.000 t/year is required, in terms of biomass this
being equivalent to a biomass production capacity of 500.000 t/year, thus 25 times larger than actual
overall worldwide microalgae production capacity. Moreover, a medium size wastewater treatment
plant for 200.000 inhabitants daily process up to 50.000 m3/day of wastewater, enough to produce up
to 50.000 kg/day of microalgae biomass, equivalent to 15.000 t/year, that is almost 2/3 of the overall
worldwide microalgae production capacity.
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Figure 1.- Current and emerging applications of microalgae. Adapted from Vitor Verdelho personal
communication.
2.2. High value products
The market of microalgae-based high value products includes the production of high quality biomass
for human application but especially the production of pigments and antioxidants, in addition to
extracts for cosmetic industry (Borowitzka, 2013b). A summary of the market estimations for
microalgal products is showed in Figure 2. It is clearly observed as the main applications are related
with human uses, involving the utilization of biomass but also the extraction of pigments, antioxidants,
fatty acids, etc. The price of these products range from 10 to 10.000 US$/kg, and the market size is
growing for most of the products, including in some cases fast growing. In any case, the actual market
size for these type of products is larger than 1.000 MUS$ and continuously increasing (Voort et al.,
2015). If including emerging new applications, the market size would be huge but still this is an
unrealistic scenario because the production capacity and cost of technology actually used still limit this
possibility.
Figure 2.- Market estimations for microalgal products. (Draaisma et al., 2013)
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The most extended microalgae strains produced in worldwide includes Spirulina, Chlorella,
Dunaliella and Haematococcus (Figure 3). The first three strains are the only ones approved at EU
level for human consumption, whereas Haematococcus is used to produce astaxanthin. Spirulina is
largely the most produced strain because its facility to growth at alkaline conditions, thus minimizing
the presence of contaminants, whereas Chlorella also minimizes the contamination problems due to its
high specific growth rate. In the case of Dunaliella the contamination problems are reduced by
producing this strain at three times higher salinity than seawater, although at these conditions the
growth rate and productivity is reduced. All these strains are mainly produced in open raceways
because this is the cheaper technology, and the only one which has been scaled up to larger sizes, of
5.000 m2 per single unit. The price of the biomass of these strains range from 10 to 100 US$/kg, thus
the production cost must be lower than these values to achieve profitable processes. Still it is not
possible to achieve biomass production costs below 30 US$/kg if using close photobioreactors and
clean raw materials (water, fertilizers, CO2), it being only possible to reduce the production cost below
this value if using effluents (wastewaters, flue gases) or open reactors (Acien et al., 2013).
Figure 3.- Market size and price of most relevant microalgae produced in worldwide (Benemann,
2013)
Spirulina is mainly used as functional food or to improve the health properties of regular foods, as
source of gamma-linoleic acid and phycocianin, to be used in cosmetic or as supplement for feeds
(Vigani et al., 2015). Companies producing Spirulina in worldwide includes Cyanotech
(www.cyanotech.com) (U.S.A); Earthrise Nutritionals (www.earthrise.com) (U.S.A); Panmol/Madaus
(www.panmol.com) (Austria); Parry Nutraceuticals (www.murugappa.com) (India); Spirulina
Mexicana (Sosa Texcoco) SA (México); Siam Alga Co., Ltd. (Tailandia), Nippon Spirulina Co., Ltd.
(Japan), Koor Foods Co., Ltd (Israel), Nan Pao Resins Chemicals Co., Ltd. (Taiwan); Myanmar
Spirulina Factory (Myanmar), Blue Continent Co., Ltd (South Africa). Most of the production of this
strain is carried out in open raceways in facilities up to 200 ha.
Chlorella is mainly used in foods and functional foods, cosmetic, supplement for feeds, and
aquaculture due to its high protein content and excellent amino acids profile (Vigani et al., 2015).
Companies producing Chlorella in worldwide includes Nikken Sohonsha Corp.
(www.chlostanin.co.jp) (Japan), Earthrise Nutritionals (www.earthrise.com) (USA), Ocean Nutrition
(www.oceannutrition.com) (Canada), I’age vertd (www.agevert.com) (France), Chlorella
manufacturing and Co. (Taiwan), Roquette Klötzed (Germany). Although this strain can be produced
in open raceways, most of the production is carried out in circular tanks under mixotrophic conditions.
Recently different companies are also producing Chlorella in tubular photobioreactors providing
“excellent” quality biomass.
Dunaliella is mainly used in foods and functional foods, to produce β- carotene, in cosmetic, as
antioxidant source, or supplement for feeds (Vigani et al., 2015). Companies producing Dunaliella in
worldwide includes Nature Beta Technologies Cognis (www.cognis.com) (Australia); Cyanotech
(www.cyanotech.com) (U.S.A.); Nikken Sohonsha Corp. (www.chlostanin.co.jp) (Japan); Earthrise
Nutritionals (www.earthrise.com) (U.S.A.), Betatene (www.betatene.com.au) (Australia); Inner
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Mongolia Biological Eng. (China); Nature Beta Technologies (Israel); Parry agro Industries
(www.murugappa.com) (India); ABC Biotech Ltd. (India); Tianjin Lantai Biotechnology, (China);
Western Biotechnology Ltd.(Australia); Aqua Carotene Ltd.(Australia). This biomass is exclusively
produced in open raceways at high salinity conditions, professor Ami Ben-Amotz being the largest
worldwide expert on this process (Ben-Amotz, 1995; Ben-Amotz et al., 2004).
Haematococcus is mainly produced as source of astaxanthin, a powerful antioxidant, and to be

incorporated into functional foods, cosmetic, and aquaculture (Vigani et al., 2015). Companies
producing Haematococcus in worldwide includes Mera Pharmaceuticals (www.aquasearch.com)
(U.S.A.); Cyanotech (www.cyanotech.com) (U.S.A.); BioReal (www.bioreal.se) (U.S.A.); Algatech
Algal technologies (www.algatech.com)(Israel); Fuji Health Science (www.fujichemical.co.jp); Dutch
State Mines (http://www.dsm.com), Changsha Organic Herb Inc. (http://www.organic-herb.com),
Health Sources Industry Co., Ltd (http://www.health-sources.com) (China); Parry agro Industries
(www.murugappa.com)(India). Because this strain is highly sensible to variations of culture conditions
and contaminations, most of Haematococcus commercialized in worldwide is produced in closed
photobioreactors. Prof. Sammy Boussiba is a largely reputed specialist on this field (Leu and
Boussiba, 2014).
2.3.Biofertilizers: biostimulants and biopesticides
The biofertilizers market is at a prime focus in the agriculture industry for its multi-functional benefits
and functional properties. Biofertilizers are used to improve the availability of nutrients for plants and
enhance the plant uptake of phosphorus and zinc. They also act as a physical barrier against pathogens
and protect plants from pests, decompose organic residues, and stimulate the overall plant growth and
development. Besides the expected increase in soil fertility, this technology would increase the amount
of stabilized carbon stored (C-sequestration) in soils and thus contribute significantly to the reduction
of greenhouse gas emissions. Moreover, further contribution to reduce fuel usage in agriculture can be
expected by the improved workability of soils (better water retention, less use of mineral fertilizers
and pesticides, and reduced release of nitrous oxide).
Biofertilizers are gaining significance in the market with a rise in the price of chemical fertilizers and
increase in organic food industry globally. The recent increase in the price of chemical fertilizers and
commercial response to the rising food prices has reinforced the need to develop alternative soil
fertility management strategies. Global Biofertilizers Market is expected to reach USD 1.88 Billion by
2020 at a CAGR of 14.0% from 2015 to 2020. The market was dominated by North America in 2014
and accounted for the largest share in the total biofertilizers market. Asia-Pacific is projected to be the
fastest-growing market for between 2015 and 2020 due to the increasing prices of chemical fertilizers
and increasing food demand due to population growth. In terms of type, the nitrogen fixing
biofertilizers segment is projected to be the largest market for biofertilizers; whereas in terms of crop-
type, cereals & grains is projected to be the largest market for biofertilizers in 2014. The cyanobacteria
segment is projected to be the largest market for biofertilizers by 2020 in terms of microorganisms.
Furthermore, by application, seed treatment is projected to be the largest market for biofertilizers in
between 2015 and 2020.
The biofertilizers market is characterized by intense competition due to the presence of a large number
of both large and small-scale enterprises. Expansions, acquisitions, agreements and new product
launches are the key strategies adopted by market players to ensure their growth in the market. The
market is dominated by players such as Novozymes A/S (Denmark), National Fertilizers Limited
(India), Madras Fertilizers Limited (India), Gujarat State Fertilizers & Chemicals Ltd. (India), and
Rizobacter Argentina S.A. (Argentina).
The plant growth regulators market is projected to grow at a CAGR of 3.6% from 2015 to reach a
projected value of USD 1.91 Billion by 2020. The market growth is driven by growing customer
attention towards enhancing the premium value of fruits, vegetables, ornamentals and other permanent
crops. The market is further driven by factors such as technology and product development of
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innovative plant growth regulators that can be cost-effective as well as used on a wide range of crops.
Depending upon crop types, the global market is led by the fruits and vegetables segment, followed by
oilseeds and pulses, and cereals and grains. These are used on a large scale in regions where there is
extensive production and cultivation of fruits and vegetables. Among the types of plant growth
regulators, such as auxins, cytokinins, gibberellins, and others, gibberellins accounted for the largest
market share, followed by cytokinins and auxins. Gibberellins are used on a large scale in regions
where there is an extensive production and cultivation of fruits & vegetables.
Europe accounted for the largest market share for plant growth regulators, followed by North America
and Asia-Pacific. Crops such as cereals, oilseeds, vegetables, and orchard crops are among the widely
produced crops in this region; high yield of crops have been realized by increased application of plant
growth regulator products. The Asia-Pacific region is projected to be the fastest-growing market with
investments from several multinational manufacturers, especially in countries such as China, New
Zealand, and Japan. The regulatory clauses to identify plant growth regulators as a pesticide have
reduced manufacturer’s efficiency to manage production costs due to the long period for regulatory
approval and the related expenditures associated with research activities. The high production cost
affects the final product price and reduces the consumer’s crop margin. The key market players that
dominated the global market include FMC Corporation (U.S.), Syngenta AG (Switzerland), The Dow
Chemical Company (U.S.), BASF SE (Germany), and Nufarm Limited (Australia). Most key
participants have been exploring new regions through new product launches across the globe to avail a
competitive advantage through combined synergies. Since 2011, the plant growth regulators market
has witnessed an increase in demand, especially in BRICS countries such as India, China, Brazil, and
Mexico.
The market for biopesticides is projected to reach USD 6.6 Billion by 2020 at a CAGR of 18.8% from
2015 to 2020. Biopesticides are used primarily as preventative measures for diseases in plants, made
from naturally occurring substances that controls pests by nontoxic mechanisms and in an eco-friendly
manner. Biopesticides are generally derived from animals, plants, and micro-organisms, and include
living organisms (beneficial insects). The need for a continuous supply of food has led conventional
agriculture to be strongly dependent on chemicals. The increasing concern of consumers and
government on food safety has led growers to explore new environmentally friendly methods to
replace, or at least supplement, the current chemical-based practices. The use of biopesticides has
emerged as promising alternative to chemical pesticides. Though the biopesticides market is primarily
driven by microbial biopesticides, biochemical and beneficial insects’ usage is projected to contribute
to further growth.
Grains & oilseeds and fruits & vegetables are the important crop segments that drive the current
growth of the biopesticides market; however, there is a rising trend for use of biopesticides in forestry.
The need for a continuous supply of food has led conventional agriculture to be strongly dependent on
chemicals. The increasing concern of consumers and government on food safety has led growers to
explore new environmentally friendly methods to replace, or at least supplement, the current chemical-
based practices. The use of biopesticides has emerged as a promising alternative to chemical
pesticides. North America dominated the global biopesticides market in 2014; whereas, the European
region is projected to grow at the highest CAGR from 2015 to 2020. The Asian market presents a
good opportunity for biopesticides as China and India adopt more biopesticides.
The market competitiveness of biopesticides has been increasing with the growing demand for organic
food from developing nations and environmental hazards caused by chemical pesticides. The less
availability of arable land has fostered the use of advanced methods to increase the agricultural
productivity. In organic production systems, biopesticides represent the most significant crop
protection tools that a grower has to produce a quality crop. While their use is not overly complicated,
the application of some biopesticides may require a high level of understanding and knowledge of the
diseases and pathogens that they are designed to control. As with any disease management program,
proper timing and application are essential to ensure efficacy. Biopesticides may not perform as
quickly as some synthetic chemical pesticides. However, biopesticides are generally less toxic to the
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user and are smooth on non-target organisms, making them desirable and sustainable tools for disease
management. The market is dominated by players such as Bayers CropScience Ag (Germany), BASF
SE (Germany), Monsanto Company (U.S.), Marrone Bio Innovations Inc. (U.S.), The Dow Chemical
Company (U.S.), and Isagro S.p.A (Italy). These players adopted various strategies such as new
product developments, mergers, agreements, collaborations, and business expansions to cater to the
needs of the biopesticides market.
Microalgae biomass contains valuable compounds that are ideally suited to be used as biostimulants,
biopesticides, and to produce biofertilizers. Green microalgae like Chlorella are able to produce plant-
growth regulating substances, including auxins and cytokinins among others, which enhance the
growth of higher plants; fast growing green microalgae belong to the best plant-growth enhancing
strains. Filamentous cyanobacteria, belonging to Nostoc, Anabaena and Tolypothrix genera are the
most effective strains against plant fungal diseases; the success rate of screening for antifungal activity
is up to 20% in the case of cyanobacteria. Cyanobacteria are the largest group of photosynthetic
prokaryotes that exist in a large diversity and distribution in the world. Eukaryotic algae including
macro- and microalgae, are a rich source of biologically active metabolites. Marine algae have been
shown to have bactericidal (Goud et al., 2007; Srinivasakumar and Rajashekhar, 2009), antifungal
(Najdenski et al., 2013; Uyisenga et al., 2010) and insecticidal activities (Hernández-Carlos and
Gamboa-Angulo, 2011; Tringali, 1997). Green microalgae genera like Nannochloropsis, Chlorella,
and Scenedesmus can produce phytohormones including indol acetic acid (IAA), cytokinins,
gibberellins, absicisic acid (ABA) and/or jasmonic acid (Lu and Xu, 2015) as well as other substances
with biostimulant activity. In addition to this fact, the production of antibiotics and siderophores from
Chlorella and Scenedesmus has been previously described. On the other hand, while cyanobacteria
like Arthrospira (Spirulina), Oscillatoria, Chlorogloea, Arthronema or Calothrix are able to produce
IAA, cytokinins and/or jasmonic acid (Tarakhovskaya et al., 2007), cyanobacteria belonging to
Nostoc, Anabaena, Oscillatoria and Tolypothrix are very effective “biopesticide” agents.
The production of biofertilizers and biopesticides from microalgae requires, in addition to adequate
strains and biomass, suitable extraction or processing methods to achieve efficient end products
(Figure 4). Some authors report that the biomass can be used directly as biofertilizers/biopesticide, but
its efficiency is much lower if adequately processing (Jäger et al., 2010; Macías et al., 2008).
Enzymatic hydrolysis is one of the most extended methodology for the processing of microalgae
biomass for agriculture purposes, but also chemical hydrolysis and extraction process using solvents
has been reported (Molnár et al., 2005; Romero García et al., 2012). Still there is a lack of knowledge
about the optimal processing strategies to obtain agriculture products and their behaviour in the
performance of crops.
Figure 4.- Bioreactor used at pilot scale for the production of biofertilizers from microalgae (right).
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2.4.Aquaculture
The feed premix market is projected to reach USD 10.26 Billion by 2020, at a CAGR of 3.0%, as
studied from 2015 to 2020. The market for feed premix products has a significant impact on the
animal nutrition industry. Feed premix is broadly categorized based on their type into vitamins,
minerals, amino acids, antibiotics, and others include enzymes, preservatives, organic acids,
antioxidants, pigments, and flavours. The feed premix market is also segmented on the basis of
livestock into poultry, ruminants, swine, aquatic animals, and other animals which includes pet
animals, birds, and reptiles. Growing awareness regarding the importance of health and hygiene of
livestock has been a significant driving force for this market after immense livestock loss caused by
avian flu outbreaks in Asia-Pacific regions. Feed premix products provide a wholesome nutrition,
metabolic efficiency, effective growth and development, and health protection to livestock. In order to
ensure healthy growth of poultry, swine, and cattle, vitamins and minerals must be supplemented
while preparing the feed for consumption.
The market for feed premix in North America is projected to reach nearly USD 2.5 Billion in 2020 and
is expected to remain as a strong market along with Asia-Pacific region. The Asia-Pacific region
accounted for the largest market share in 2015 and is projected to grow be the fastest-growing market
during the review period. The feed premix market of key developing regions such as Asia-Pacific and
Latin America witnessed the entry of important market players, business units, and research centers of
key players. The key players in this market have been involved in the process of developing a range of
customized solutions to target specific needs of the livestock breeders and cattle owners. Thus, the
feed premix market has been gaining more global presence and acceptance among customers. Leading
participants in this market include Koninklijke DSM N.V. (The Netherlands), Cargill, Incorporated
(U.S.), Nutreco N.V. (The Netherlands), InVivo Nutrition Et Sante Animales (France), DLG Group
(Denmark), Archer Daniels Midland Company (U.S.), and AB Agri Ltd. (U.K.). These players have
been implementing different strategies to achieve growth and development in this market. Especially,
investments on development of innovative products and capacity expansions exhibit the strong
competition to capitalize on the market demand for feed premix products.
Over the last two decades, the aquafeed industry has shown parallel growth to the aquaculture
industry. Aquafeed is a demand-driven industry. There is growing expectation for aquaculture to meet
the shortfall of aquatic products and to cater to the growing demand of the increasing population. This
industry is driven by the increase in the fish meat consumption which is due to the boom in the world
population. China is responsible for most of the growth that is happening in the Asia-Pacific region.
There is a clear trend towards the development and implementation of safety and quality standards. In
the last decade, greater emphasis was placed on better aquatic animal health management and food
safety following public concerns and reports of contaminants in fish products in all regions of the
world. The international and national demand for safe and higher-quality aquatic products is
increasing wherein there is a clear need to improve product quality and safety. There are
improvements in cold chains and control systems for ensuring product quality and safety due to which
more emphasis will be put for these aspects in the coming years.
Countries are continuing to introduce species or strains for aquaculture, while efforts are made to
develop specific strains for aquaculture; particularly for the high-value species. For instance, in the
shrimp farming sector, effort has doubled to attain the capability to locally commercialize the
production of SPF (specific pathogen free) and SPR (specific pathogen resistant) broodstocks of a
number of species (Penaeus vannamei, Penaeus chinensis, and Penaeus monodon). The Asia-Pacific
market topped the revenue chart of the global aquafeed industry, accounting for around 76.1% and
75%, both by value and volume respectively, of the total market. The global aquafeed market is
expected to reach a value of 123 billion USD by 2019, at a CAGR of 12.1% from 2014 to 2019 by
revenue, and by consumption value, it is projected to reach 89 billion USD by 2019, at a CAGR of
10.7% from 2014 to 2019. The aquafeed market size is estimated by segmenting the market into
micro-markets, based on the share of each additive, animal species, and geographical region. The
aquafeed market, in terms of value, was dominated by the Asia-Pacific region in 2013. China is one of
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the major countries and also a leading producer of aquafeed. The rapid development of the aquaculture
industry in China has contributed in improving food supply, as well as generated job opportunities and
income for the people in China. The European region is the second-largest market while North
America ranks third, as it is the most advanced producer of animal feeds globally. The key players
covered in aquafeed market report include Alltech Inc. (U.S.), Aller Aqua A/S (Denmark), Beneo
Group (Germany), BioMar A/S (Denmark), Biomin GmbH (Austria), Cargill Incorporated (U.S.),
Charoen Pokphand Foods Public Company Limited (CPF) (Thailand), Coppens International B.V.
(Netherlands), Nutreco N.V. (Netherlands), and Ridley Corporation (Australia).
Increasing the needs for protein and the high cost of fish meal in the recent years has led to the need to
search for new alternatives, as animal and plant sources of protein for the needs of aquaculture. One
such accessible and relatively inexpensive food component that could respond successfully the
challenge question raised by aquaculture is algae (Sirakov et al., 2015). Microalgae can be
incorporated into the feed for a wide variety of animals ranging from fish (aquaculture) to pets and
farm animals. In fact, 30% of the current world algal production is sold for animal feed applications
(Becker, 2004) and over 50% of the current world production of Arthrospira is used as feed
supplement (Yamaguchi, 1996). Microalgae are required for larval nutrition during a brief period,
either for direct consumption in the case of molluscs and peneid shrimp or indirectly as food for the
live prey fed to small fish larvae. The most frequently used species are Chlorella, Tetraselmis,
Isochrysis, Pavlova, Phaeodactylum, Chaetoceros, Nannochloropsis, Skeletonema and Thalassiosira
(Apt and Behrens, 1999; Borowitzka, 2013a; Muller-Feuga, 2000; Yamaguchi, 1996). Microalgae
biomass can be incorporated into the aquafeed directly, at percentages ranging from 1 to 25%, or
alternatively extracts from microalgae containing lipids, especially carotenoids, can be used as feed
additives (Figure 5).
Figure 5.- Image of aquafeed without and with microalgae (left) and carotenoids extract from
microalgae biomass to be used as feed additive (right).
2.5.Wastewater treatment
SABANA project aims to develop new technologies to be applied specially in medium-small cities,
which actually have not adequate and sustainable wastewater treatments, it representing the larger
fraction of locations that don’t accomplish the EU regulations. The utilization of microalgae for
wastewater treatment allows a reduction of the energy associated to conventional wastewater treatment
processes up to achieve an energy positive process, consuming less than half of energy required in
conventional treatments also reducing the wastewater treatment cost to less than half of conventional
systems. The latest figures for wastewater treatment in Europe show improvements in collection and
treatment, even if big differences remain between Member States. Towns, cities and settlements across
the European Union are required to collect and treat their urban waste water under the Urban
Wastewater Treatment Directive. The Directive provides for biological wastewater treatment called
‘secondary treatment’ and, in the catchments of particularly sensitive waters, more stringent treatment.
For EU-15 Member States all deadlines in the Directive have expired, but EU-12 Member States have
extended deadlines, with the latest one expiring in 2018.
11
Cohesion funds and the European Regional Development Fund play a major role in the
implementation of the Directive. In 2009, EUR 3.5 billion were allocated to wastewater infrastructure
projects, and EUR 9.7 billion in 2010, with Poland receiving EUR 3.3 billion, Romania EUR 1.2
billion, and Hungary EUR 600 million. For the whole programming period 2007-2013, the EU
contribution to waste water investments is estimated at about EUR 14.3 billion. Compliance rates were
higher where costs were recovered and the "polluter pays" principle implemented. The Commission is
promoting compliance through continued dialogue and, where necessary, through infringement
procedures, some dating back to 1997. Infringement cases against 10 Member States are still open. In
2009/2010, a total of 82% of the waste waters in the EU received secondary treatment complying with
the provisions of the Directive, four percentage points up from the previous Report. Four Member
States reached 100% compliance and another six Member States had levels of compliance of 97% and
higher. However, the compliance rates in EU-12 Member States are trailing behind significantly with
only 39% of their waste waters receiving appropriate secondary treatment. Moreover, the
implementation of tertiary treatment, which is mostly targeted at the elimination of nutrients to combat
eutrophication or reduce bacteriological pollution that might affect human health such as for drinking
water zones or bathing waters, was an overall compliance rate of 77%. However, there were particular
delays in implementation of more stringent treatment in EU-12 Member States where only 14% of
waste waters are treated appropriately. On the positive side, four countries reached 100% compliance.
The amount of pollutant loads generated from the non-compliant fraction of wastewater from
towns/cities were approximately of 603 kt/y of nitrogen, 78 kt/y of phosphorus and 3900 kt/y of total
organic pollution.
Livestock agriculture in Europe has developed into an efficient industry during the last decades, but its
future is tarnished by several environmental problems (e.g. water, air and soil pollution) that stem
from the large quantities of wastes produced within several intensively farming regions. The entire
manure production in the EU that potentially is available for manure processing is estimated to 1.4
billion tons. Germany is the first producer with up to 202 million tons, whereas Spain produced 117
million tons, and Italy up to 88 million tons per year. Most of the manure is stored and land spread
contributing to contamination of water reservoirs and emissions to the atmosphere. Alternatively,
manure can be processed to change its physical and/or chemical properties as an objective itself, or in
order to recover energy from the livestock manure, make the livestock manure more stable, or remove
nutrients from the main stream. On this scenario farms are obliged to develop and apply specific
solutions adapted to the various manures produced and the local situation.
Different technologies can be applied to manage manure, but no universal solutions exist. In large
farms or concentrated areas manures are processed mainly by anaerobic digestion to produce biogas,
whereas in small farms or not concentrated areas they are stored and then released in the environment.
Processed and unprocessed manures are usually land spread, but production of these residues
overpasses the capacity of arable land available. Also, only a small fraction of the nutrients presents in
the slurry (particularly N and P) are being consumed by plants, causing enormous environmental
problems related to leaching, pollution of surface waters, emissions of noxious gases into the
atmosphere and surface water eutrophication. Moreover, the Nitrates Directive (1991) establishes
action programs to cut down nitrogen pollution and states the limit of 0.170 tonN/ha·year from
livestock manure to control pollution, improve water quality and protect human health. Alternative
technologies can be used to produce valuable products from manure, thus avoiding the necessity of
land spreading. The application of microalgae-bacteria consortiums allows using solar energy to
transform manure nutrients (C, N, P) into valuable biomass that can be used to produce commodities
as feed and biofertilizers. Microalgae hold a great potential because of their high growth rate, easy
production, better utilization of sunlight compared to conventional plants, shorter lifecycles and
independence from fertile agricultural land. Microalgae are capable to produce up to 100 ton/ha·year
of biomass consuming for this up to 10 tonN/ha·year and 2 tonP/ha·year, using solar energy as driving
force and achieving a positive energy balance, thus more energy being accumulated into produced
biomass than consumed into the process. Up to 1 MJ/m2·day of solar energy can be fixed as chemical
energy by microalgae.
12
The utilization of microalgae for wastewater treatment is not new and it was initially proposed by
Oswald in the last century as method to coupling with the production of microalgae biomass at large
scale (Buhr and Miller, 1983; Oswald and Goleuke, 1967). Initially this was the origin of raceway
reactors, which were designed to be able to use microalgae as oxygen producers for the degradation of
organic matter contained into wastewater by bacteria naturally occurring in these reactors. However,
this technology was not extended due to its low efficiency, requiring large surfaces (>10 m2/person
equivalent) and long hydraulic residence times (>10 days) that make this technology unsuitable.
However, recently the technology used is being reconsidered, thus allowing to improve the
performance of the raceway reactors, to improve the control of culture conditions and then the overall
efficiency of this type of reactors, then the required surface reducing (up to 2 m2/person equivalent)
and the hydraulic retention time minimizing (up to 2 days). From these advances recently a large scale
10 ha demonstration facility has been build and it is in operation by FCC Aqualia in Chiclana (Spain)
as part of ALL-GAS project supported by the EU Commission.
It is important to note that although this technology has been mainly focused to the treatment of
sewage or urban wastewaters, it is also feasible for the treatment of other wastewaters from the
industry, farms, and whatever sector. According to the origin of the wastewater the complexity of the
wastewater and its volume largely differs (Figure 6). In the case of sewage, the average volume per
plant is about 50.000 m3/day and the COD content rarely exceed 500 mg/L, whereas if considering
centrate produced into the anaerobic digestion of activated sludge in wastewater treatment plants the
volume can be around 100 m3/day but the COD content is higher than 2000 mg/L. The worse scenario
is when considering the treatment of manure or digestates from farms, which although are produced in
small amounts, around 50 m3/day it contains hyper high COD concentrations up to 30.000 mg/L and
nitrogen contents up to 8.000 mg/L, mainly as ammonium.
Figure 6.- Complexity and volume of wastewater according to wastewater type.
The application of microalgae based process for wastewater treatment can enhance the sustainability
and profitability of actual processes, but more interesting can provide solutions for unsustainable
scenarios now existing. Thus, in the case of urban wastewater the actual treatment systems consumes
up to 0.5 kWh/m3 for the removal of contaminants to the atmosphere in a safe way, the cost of the
process being up to 0.2 €/m3. If replacing conventional for microalgae-based processes it is possible to
recover the nutrients contained into the wastewater as biomass, reducing the energy consumption
below 0.2 kWh/m3 and the treatment cost below 0.1 €/m3. Moreover, if considering the global energy
balance this process is positive, thus producing net energy, and including it being economically
positive if considering the value of the microalgae biomass produced for different markets, including
at prices lower than 1 €/kg.
13
2.6.Market of microalgae based products
Although a lot of references about potential applications of microalgae can be found in literature, only
a few reports provides precise information about market size and price of microalgae products. It is
necessary to remark the recent reports published by the group from the University of Wageningen
(Enzing et al., 2014; Voort et al., 2015). Additionally, valuable information about end products can be
obtained from databases and reports from companies as MarketsandMarkets™. Figure 7¡Error! No se
encuentra el origen de la referencia. summarizes the information about market size and price of
microalgae-based products as a function of safety requirement of released products, thus four major
groups being considered. The requirements of safe production are highly relevant to define the suitable
technology to be used, and at the end the unit production cost.
1.E+08
Market size (tn/year)
1.E+06
1.E+04
1.E+02
1.E+00
PUFA
Livestoch feed
Biodiesel
Biomethane
Biopesticides
Feed aditives
Bioethanol
Bioplastics
Beta-carotene
Whole microalgae
Jet fuel
Biofertilizers
Biostimulants
Aquaculture
biomass
No safety requirements Minimum safety requirements Medium safety requirements High safety requirements
10000
Market price (€/kg)
1000
100
10
0.1
PUFA
Livestoch feed
Biodiesel
Bioethanol
Biomethane
Biofertilizers
Biopesticides
Feed aditives
Bioplastics
Beta-carotene
Jet fuel
Biostimulants
Aquaculture
Whole microalgae
biomass
Market value (M€/year)
1.E+04
1.E+02
1.E+00
PUFA
Livestoch feed
Biodiesel
Feed aditives
Bioethanol
Biomethane
Biopesticides
Bioplastics
Beta-carotene
Whole microalgae
Jet fuel
Aquaculture
Biofertilizers
Biostimulants
biomass
Figure 7.- Comparative analysis of market size, price and value of microalgae based products. Red
bars correspond to valuable compounds for agriculture whereas green bars correspond to valuable
applications of microalgae in aquaculture identified as target products into the project. (Data from
Voort et al 2015).
14
In the case of no safety requirements, end products include mainly biofuels. This market is huge in
size but the acceptable biomass production cost to enter into this markets is too low, below 1 €/kg,
comparable to cereals and other low cost sugars/oil vegetables. The current technology doesn’t allow
to produce microalgae biomass at this low cost (Huesemann and Benemann, 2009). The next market
with minimum safety requirements includes biofertilizers, biostimulants, biopesticides and bioplastics.
Also the production of commodities for industry can be included on these markets. The size of these
markets is also huge but one to two orders of magnitude lower than biofuels. However, the market
price of biomass on these markets is also one to two order of magnitude higher than that of biofuels,
ranging from 1 to 100 €/kg. This is a highly interesting market by the potential benefits of microalgae
based products into the enhancement of production capacity and sustainability of agriculture (Romero
García et al., 2012).
In the case of medium safety requirements, applications of microalgae biomass related with
aquaculture, animal feeding and feed additives are included. The size of these markets is analogous to
previous one also the price of microalgae biomass, thus the only difference being the higher
requirements in terms of quality of raw materials and technologies to be used. The higher requirements
enforce higher production costs. The markets related with human applications is currently the most
relevant for microalgae biomass. These include the whole biomass for food and nutraceuticals, in
addition to high value compounds as antioxidants and PUFAs (Borowitzka, 2013b). The size of these
markets is the smaller one, but the price being the higher one, up to 1000 €/kg. However, to produce
biomass for these markets high quality raw materials and technologies must be used, including only a
few number of strains being allowed to be used, thus it being a very restrictive market with large
regulatory and safety requirements.
When comparing the characteristics of different markets, it could be concluded that to expand the
commercial applications of microalgae large efforts must be focused to produce low cost biomass,
below 10 €/kg, in large amounts, more than 1000 t/year, thus allowing to enter into emerging markets
requiring medium and minimum safety production as those related with aquaculture, feeding animals,
agriculture applications and commodities. Even for these markets new processes and technologies are
required. Anyway, it would be much easier to focus on these markets as previous step to focus in
human application markets requiring the accomplishment of much higher safety requirements, or
finally to focus in biofuels markets requiring much lower production cost and huge production
capacity.
3. MICROALGAE PRODUCTION CAPACITY

3.1.Maximal biomass production capacity
Whatever the technology or strain the microalgae biomass production capacity is limited by the
amount of energy available at the selected location of the facility. Thus, the Solar radiation availability
determines the maximal biomass productivity possible to be achieved. In template climates the solar
radiation ranges from 200 to 300 W/m2, a mean value of 250 W/m2, equivalent to 21.6 MJ/m2·day or
2160 kWh/m2·year, can be estimated. Considering a 5% of photosynthetic efficiency and a combustion
heat of 20 MJ/kg for the biomass, the maximal biomass productivity in template climates can be
estimated to range about 190 t/ha·year (Figure 8). Higher values up to 240 tn/ha·year can be obtained
if considering top locations into the planet as Atacama Desert, north of Africa or centre of Australia.
15
Figure 8.- Worldwide solar radiation availability and microalgae biomass production capacity
considering a maximum efficiency of photosynthesis (Tredici, 2010)
However, to achieve these maximal values the strain and technology must be carefully
designed/selected and operated. It is important to note that these are mean annual values but there is
daily and annual variations that strongly affect/influence the behaviour and at the end the productivity
of whatever system. Only a depth knowledge of the variation of environmental conditions and of the
strains and technology to be used, allows to optimally design and operate whatever microalgae based
system. The inadequacy of whatever parameter not only reduces the production capacity nut also
strongly influences the production cost and the overall viability of the process.
3.2.Available technologies
3.2.1. V/S ratio
According to the solar radiation availability and maximum performance of photosynthetic process, up
to 54 g/m2·day of microalgae biomass can be produced in template climates. For this different
technologies can be used, the volume per surface unit (V/S) being a characteristic parameter if used
technology. Thus, in raceway reactors operated at 20 cm water depth the V/S ratio is equal to 200
L/m2, whereas in tubular large tubular photobioreactors the V/S ratio is equal to 75 L/m2 and it can be
reduced up to 20 L/m2 in thin layer reactors at 2 cm water depth. By dividing the areal productivity by
the V/S ratio it is possible to determine the maximal volumetric biomass productivity to be achieved
for whatever photobioreactor technology (Eq. 1). Results shows as at high V/S ratio the volumetric
biomass productivity is low, up to 0.27 g/L·day for V/S=200 L/m2, whereas when reducing the V/S
the volumetric biomass productivity increases, up to values of 1.69 g/L·day for V/S=25 L/m2 (Figure
9).
Eq. 1
/
16
Figure 9.- Variation of volumetric biomass productivity as a function of areal biomass productivity
and V/S ratio of the reactor.
Whatever the V/S ratio, to achieve the maximal productivity the cultures must be operated in
continuous mode at optimal dilution. Theoretically it could be demonstrated that the optimal dilution
rate is equal to half of the maximal specific growth rate, thus because for most of microalgae the
maximal specific growth rate is close to 1.0 1/day, the optimal dilution rate is close to 0.4 day-1.
Considering this value, it is possible to determine the optimal biomass concentration in the reactor as a
function of the volumetric biomass productivity which is a function of V/S ratio of the selected
technology (Eq. 2). Moreover, from volumetric biomass productivity it is possible to determine the
volume of culture/reactor requested to produce a mass unit of biomass (Eq. 3), and including the
volume of culture/reactor to be daily harvested to produce a mass unit of biomass (Eq. 4).
Eq. 2
Cb
M Eq. 3
V
V V Eq. 4
Results shows as the biomass concentration inside the reactor exponentially increases when reducing
the V/S ratio of the reactor, from 0.7 g/L at 200 L/m2 to 4.2 g/L at 25 L/m2 (Figure 10). The biomass
concentration has a large impact in the robustness of the process, so in the tolerance to adverse culture
conditions or contaminants, thus the operation of large scale photobioreactors at biomass
concentrations upper than 1.0 g/L being highly recommended. Moreover, the biomass concentration
has a large impact into the economy of the process influencing the size of the reactor and of the
machinery necessary. Thus, the higher the biomass concentration inside the culture the lower is the
volume of the reactor requested to produce a fix amount of biomass then including if the price of the
reactor is higher it could be positive for the process. The same about the volume of culture to be
harvested, the higher the biomass concentration the higher the efficiency of whatever technology for
the recovery of the biomass and the lower its size, then it being cheaper and consuming less energy.
17
All these factors must be take into account when considering the overall design of whatever
microalgae based process.
Figure 10.- Variation of optimal biomass concentration, volume of reactor and volume of harvest to be
processed as a function of V/S ratio of the reactor.
3.2.2. Large scale reactors
Once the technology of photobioreactor is selected its final design can be modified according to the
parameters to be controlled. The main parameter is according to previous sections the dilution rate;
thus the volume of culture daily harvest must be set to the optimal according to the specific growth
rate. However, the specific growth rate and then the optimal dilution rate can be strongly reduced if
culture conditions are not adequate. Table 1 summarizes the main parameters to be controlled in
microalgae photobioreactors and ranges on which these variables must be controlled. It is important to
note that at large scale the light intensity and photoperiod are determined by the solar cycle whereas
the salinity is defined once the water origin/quality and the strain to be used are set. On this table it is
not included the dissolved oxygen concentration because at laboratory conditions or in small scale
reactors this parameter is not usually critical.
When considering the production of microalgae at small scale most of the parameters can be easily
controlled but the cost of this control being high although generally it is not considered (Table 2).
However, at large scale the scenario is completely different because the cost of control of whatever
parameter is a relevant issue to be solved. Thus, in the case of culture medium the utilization of
chemicals by fertilizers is easily solved, whereas the adequate mass transfer capacity is determined by
the adequate design of the reactor and its operation conditions. Control of temperature can be in some
cases impossible to accomplish due to the excessive energy requirements for the process, then only
systems capable to avoid overheating that can cause the death of the cultures being installed. Energy
supply for mixing and including the optimization of light utilization efficiency are some of most
difficult parameters to be controlled.
18
Table 1.- General parameters for microalgae cultivation.
Table 2.- Possibilities of control of different parameters in microalgae cultures according to the scale
of the process.
Parameter Low scale Large scale

Culture medium Pure chemicals Fertilizers
Gases exchange (O2/CO2) Easy Adequate design
Control of pH Easy Mixing problems
Control of temperature Easy Energy requirement
Stirring and mixing Easy Energy requirement
Light Difficult Difficult
Continuous operation Easy Adequate design
In the Figure 11 it is showed as the inadequacy of culture conditions can reduce the performance of
microalgae cultures, in this case of T-ISO strain. It is clearly observed as temperature and pH upper or
below the optimal values can reduce the performance of the cells and including causing the death of
the culture. However, the range on which these parameters are optimal is not narrow, so this strain
tolerating temperature from 30 to 40ºC and pH from 7 to 9, without large reduction of its performance.
In the case of dissolved oxygen concentration, it is observed as below the saturation value with air, 10
mg/L, no inhibition is observed, the photosynthesis rate being only reduced when dissolved oxygen
concentrations upper than 15 mg/L are achieved, and photosynthesis completely stopping at dissolved
oxygen concentrations upper than 20 mg/L.
It is important to note that when considering the control of culture conditions, it is mandatory to take
into account not only the daily values but the hourly variation of culture conditions at outdoor due to
the solar daylight cycle. Thus, the dynamic of daily variation of culture parameters must be considered
and according to the velocity of processes taking place it is necessary to design the right
methods/strategies to control the culture parameters. In spite of this, it is impossible to completely
control all the parameters in outdoor reactors. Thus, including when using close tubular
photobioreactors the temperature, light availability and dissolved oxygen concentration inside the
culture can be inadequate (Figure 12). The inadequacy of culture conditions reduces the performance
of the cells, inadequate dissolved oxygen and temperature being two of most critical variables that can
reduce the performance of the cells up to 60%. When considering all the parameters, the inadequacy of
culture conditions can reduce the performance of the cells to half of the maximal, so the design of
adequate control systems having a large influence on the performance of whatever microalgae based
process.
19
Figure 11.- Influence of culture conditions (temperature, pH and dissolved oxygen) into the
performance of microalgae cells in terms of photosynthesis rate (Costache et al., 2013).
20
Figure 12.- Daily variation of culture conditions and its effect on the photosynthesis rate of microalgae
cultures (Ippoliti et al., 2016).
21
4. ECONOMIC ANALYSIS METHODOLOGY

4.1.Overall overview of the process
The economic analysis of whatever process is a useful tool suitable to determine the final production
cost but more important to identify the most relevant factors influencing it. Economic analysis is not a
fix image of the process but it must to provide a dynamic tool suitable to be used by decision makers
to support decisions about the process. To perform the economic analysis of any process a clear and
simply methodology must be used, otherwise it being not useful. It is important to note the proposed
methodology only provide precise numbers according to the precision of data used to perform it, but in
any case it provides a global overview of the suitability of the process and major factors determining
it.
Figure 13 shows the main steps necessary to perform whatever economic analysis. The start point is to
have a block diagram of the process and from it to define the overall flowchart of the process. From
the flowchart the size and type of equipment can be determined, it allowing to determine the cost of
major equipment. Major equipment, in addition to installation cost, pipes, land arrangement, etc.
constitutes the total fix capital requested to build the facility. This total fix capital must be recovered
during the lifetime of the facility as a cost by mean of depreciation that also includes some taxes. Thus
the total lifetime is a critical parameter to be defined. In the case of biological processes lifetime
considered ranges from 5 to 15 years as a function of novelty of the process. As mean value a lifetime
of 10 years is usually considered. Direct production costs include the raw materials and utilities, in
addition to labour and supervision. The amount of raw materials consumed is a direct function of
biomass production capacity, it being determined by the coefficient yields on the process. Equal for
the energy and water included into utilities, both being determined from flowchart of the process.
Concerning manpower, it is highly flexible and depend of the robustness of the process and automatic
level.
Figure 13.- Scheme of methodology proposed to determine the microalgae biomass production cost
and most relevant factors influencing it (Acién et al., 2012).
As example of proposed methodology the economic analysis of a production facility to produce

biomass of Scenedesmus almeriensis in tubular photobioreactors using clean water and CO2 at scale of
0.04 ha is considered (Figure 14). Table 3 summarizes the main parameters of the considered facility,
some of them includes the V/S ratio, the biomass productivity and the energy consumption of the
different steps of the process. On the basis of these general parameters the flowchart of the entire
process can be calculated, from it the list of major equipment and their cost (Table 4). It is important
to note that a complete and precise list of equipment is mandatory. Moreover, the cost of the
equipment is a function of their size and technology. To have direct information from providers is the
22
best scenario but if it is not possible there are different methods to estimate the cost of whatever
equipment from the previous knowledge of a similar equipment/size. When using these approximate
methods, it is critical to consider that not all the technologies and sizes are available. Then a maximum
increase of size of ten times being reasonable, if larger sizes are requested it being recommendable to
install/consider multiple units.
For the case study considered the list of major equipment summarizes up to 330 k€. However, to this
major equipment cost it is necessary to add the cost of installation of the equipment, in addition to
other additional costs. Table 5 summarizes all the items necessary to be considered, and how they can
be calculated from major purchased equipment by multiplying by different factors. The value of these
factors is different according to the industry/sector considered, but for low complexity
biotechnological processes that included in this table are recommended. It can be observed as the final
total fix capital requested to build the facility is almost our times the cost of major equipment, this
being a general rule in biotechnological processes. Once the total fix capital is calculated, the
depreciation is estimated as a function of this value and lifetime of the process (Table 6). Depreciation
also includes some taxes and insurances thus providing an annual cost to be included as cost in the
final estimation of overall production cost.
Figure 14.- Simplified block diagram of the proposed process for the production of Scenedesmus
almeriensis biomass in tubular photobioreactors using clean water and CO2 at scale of 0.04 ha (Acién
et al., 2012).
Table 3.- Major parameters for case study considered about the production of Scenedesmus
almeriensis biomass in tubular photobioreactors using clean water and CO2 at scale of 0.04 ha.
CASE STUDY
Ratio V/S 0.075 m3/m2
Dilution rate 0.34 1/day
Biomass productivity 0.42 g/Lday
Biomass concentration 1.26 g/L
Operation time 360 day/annun
Working time 10 h/day
Biomass production capacity 4.58 Tn/year
Air flow rate 0.10 v/v/min
Power consumption 15 kWh/m3·day
Total culture volume 30 m3
Total culture surface 0.04 Ha
23
Table 4.- Major equipment necessary for the production of Scenedesmus almeriensis biomass in
tubular photobioreactors using clean water and CO2 at scale of 0.04 ha.
EQUIPMENT AND COSTS (€)

Item Detail Capacity Cost €/und Units Total cost, €
1 Medium preparation unit (4 m3/h) 4.0 3
m /h 6,000.00 1 6,000.00
2 Sterilization process (2 m3/h) 2.0 3
m /h 15,000.00 1 15,000.00
3 Air blower (200 m3/h) 200.0 m3/h 2,500.00 1 2,500.00
4 Photobioreactors (3 m3) 3.0 m3
15,000.00 10 150,000.00
5 Sedimenter (2.5 m3/h) 2.5 3
m /h 5,622.04 0 -
6 Harvest storage tank (1 m3) 1.0 m3 500.00 1 500.00
7 Decanter (4 m3/h) 4.0 3
m /h 45,000.00 1 45,000.00
8 Harvest pump (2 m3/h) 2.0 3
m /h 1,000.00 1 1,000.00
9 CO2 supply unit (4 kg/h) 4.0 Kg/h 500.00 1 500.00
10 Freeze-dryer (70 kg/day) 70.0 Kg/day 110,000.00 1 110,000.00
Total (€) 330,500.00
Table 5.- Fix capital necessary for the production of Scenedesmus almeriensis biomass in tubular
photobioreactors using clean water and CO2 at scale of 0.04 ha.
FIX CAPITAL
Item Detail Factor Cost, €
1 Major purchased equipment 1.00 330,500.00
2 Installation costs 0.20 66,100.00
3 Instrumentation and control 0.15 49,575.00
4 Piping 0.20 66,100.00
5 Electrical 0.10 33,050.00
6 Buildings 0.23 74,362.50
7 Yard improvements 0.12 39,660.00
8 Service facilities 0.20 66,100.00
9 Land 0.06 19,830.00
10 Engineering and supervision 0.30 99,150.00
11 Construction expenses 0.05 37,263.88
12 Contractor's fee 0.03 18,631.94
13 Contingency 0.08 72,025.87
Total fix capital 972,349.18 €
Table 6.- Fix capital per year necessary for the production of Scenedesmus almeriensis biomass in
tubular photobioreactors using clean water and CO2 at scale of 0.04 ha.
FIX CAPITAL PER YEAR

Item Detail Cost, €
1 Lifetime 10
2 Depreciation 93,268.92
3 Property tax (@ 0.01 depreciation) 0.010 932.69
4 Insurance (@ 0.006 depreciation) 0.006 559.61
5 Purchase tax (@ 0.16 of items 1-12/10) 0.160 15,557.59
Total fix capital per year 110,318.81 €
24
The flowchart of the process allows to perform the mass balances to the system then determining the
amount of raw materials requested on the process. The requirement of raw materials can largely
modify according to the coefficient yield of the process, thus to have a precise knowledge of this
critical parameter being mandatory. Most relevant raw materials for the production of microalgae
includes fertilizers and CO2. The commercial price of these materials largely modifies according to the
scale of the process and then the required annual amounts, but quite accurate values can be obtained
from different providers. An equivalent scenario can be considered about utilities. They mainly
include water and energy for microalgae production, the total amount being highly a function of the
efficiency of the process, but their cost being quite accurately obtained from commercial providers.
Finally, labour and supervision must be calculated. Direct labour necessary for the operation of the
process is estimated directly from the knowledge of the process. Other items are estimated as a
function of previous items as major equipment cost or labour (Table 7). Equal that in the case of total
fix capital the factors to be used to estimate the labour and supervision cost are a function of the
considered sector/industry. The sum of total raw materials, in addition to utilities, labour and
supervision constitutes the direct production cost.
Table 7.- Raw materials in addition to labour and supervision necessary for the production of
Scenedesmus almeriensis biomass in tubular photobioreactors using clean water and CO2 at scale of
0.04 ha.
Item Raw materials Units €/und. Cost, €

1 Fertilizers (kg) 3215 0.40 1,285.80
2 Carbon dioxide (kg) 10602 0.30 3,180.54
Item Utilities
4 Water (m3) 3672 0.10 367.20
5 Power consumption (Kwh) 161352 0.10 16,135.20
Item Labour and others Units €/und. Cost, €
6 Labour 3.00 30,000.00 90,000.00
7 Supervision (@ 0.2 labour) 0.20 18,000.00 3,600.00
8 Payroll charges (@ 0.25 (labour + supervision)) 0.25 23,400.00 5,850.00
9 Maintenance (@ 0.04 MEC) 0.04 13,220.00 528.80
10 Operating supplies (@ 0.004 items 1-5) 0.00 2,181.30 8.73
11 General plant overheads (@ 0.55 0.55 51,770.84 28,473.96
(labor+supervi+main)
12 Tax (@ 0.16 items 1-7, 11 and 12) 0.16 86.00 13.76
13 Contingency (@ 0.05 items 1-7) 0.05 27,266.25 1,363.31
14 Marketing (@ 0.05 items 1-13) 0.05 48,617.46 2,430.87
Total raw materials 4,466.34 €
Total utilities 16,502.40 €
Total labour and others 132,269.43 €
The proposed methodology allows to identify the list of items to be considered when analysing the
production cost in whatever process, and to determine the annual cost corresponding to each one of
them. By dividing the total production cost by the amount of product to be obtained, in this case the
biomass production capacity, it is possible to determine the unit production cost. Moreover, it is much
more interesting to evaluate the contribution of different costs to the total production cost, thus
allowing to identify major factors determining the final production cost and the main challenges to be
solved to reduce it. For the case study considered it is showed as the biomass production cost is 58
€/kg, the major contributions to this cost corresponding to depreciation and labour (Figure 15). Thus,
to reduce this production cost these major factors must be reduced, it having much less impact to focus
into the reduction of raw materials or energy consumption.
25
Figure 15.- Economic analysis of the production of Scenedesmus almeriensis biomass in tubular
photobioreactors using clean water and CO2 at scale of 0.04 ha (Acién et al., 2012).
A more detailed analysis of depreciation cost shows as the cost of photobioreactors, decanter and
freeze-dryer are the most relevant (Figure 16). To reduce the overall production cost it is necessary to
increase the efficiency of the photobioreactors and to reduce their cost, in addition to reduce the cost
of harvesting process and avoid drying step. Concerning labour and supervision, the direct manpower
related with the operation of the process is the major contribution (Figure 16). Thus to reduce this cost
the increase of automatization of the process and then reduction of manpower required is mandatory.
Figure 16.- Relative contribution of different items to each one of major costs of the production of
Scenedesmus almeriensis biomass in tubular photobioreactors using clean water and CO2 at scale of
0.04 ha (Acién et al., 2012).
5. CASE STUDIES
According to the objectives of SABANA project and the reported methodology to estimate the unit
production cost of microalgae based processes, an economic analysis of different scenarios included
on this project has been reported. In all the cases the installation of a facility up to 5 ha is considered.
On this facility the utilization of two different technologies is considered, raceway and thin-layer
reactors, each one with different productivities of 60 and 120 t/year, respectively. Concerning nutrients
three different scenarios are considered, one being the utilization of fertilizers, whereas others includes
the direct utilization of wastewater to produce the biomass, or the addition of manure to water to
prepare the culture medium. Next, results are included and explained.
26
5.1.Biomass
Economic analysis of microalgae based processes has been performed to determine the overall
biomass production cost at DEMO5 scale. Microalgal biomass production cost is largely a function of
the photobioreactors and raw materials utilized, thus different scenarios have been analysed.
Regarding photobioreactors two scenarios are considered: (i) the utilization of new innovative Low
Energy Algae Rector (LEAR®, patented by FCC Aqualia) or (ii) thin-layer cascade (TLC). Regarding
nutrients four different scenarios are considered: (i) the utilization of fertilizers (including cost of
fertilizers), (ii) the utilization of wastewater with a return of 0.10 €/m3, (ii) the utilization of marine
water and centrate with a return of 0.05 €/m3 of centrate, and (iv) the utilization marine water and pig
manure with a return of 3.0 €/m3 of manure. Results shows as the overall biomass production cost on
DEMO5 is 800 k€/year in the case of using raceway units whereas it increase up to 860 k€/year using
thin-layer cascades, by the higher cost of this technology (Figure 17). Using both technologies the
overall production cost reduces when replacing mineral fertilizers by sewage containing nutrients due
to the avoiding of fertilizers cost and the returns from sewage treatment. Using sewage, the production
cost reduces to 550 and 460 k€ for raceway and thin-layer respectively, due to the large volume of
sewage processed/depurated, whereas using marine water and centrate or pig manure as nutrients
source the reduction of the production cost is lower due to the lower amount of these effluents
processed in spite of its higher treatment price. According to these data the utilization of marine water
and wastewaters represent an economic benefit in addition to greatly increasing the sustainability of
the entire process.
1,000 Raceway 1,000 Thin-layer

800 800
Production cost, €/year
Production cost, €/year
600 600
400 400
200 200
- -
RW+fertilizers RW-sewage RW-centrate RW-manure TL+fertilizers TL-sewage TL-centrate TL-manure
Figure 17.- Production cost of 5 ha facility using raceway or thin-layer cascades in different scenarios.
5.2.Production of biostimulants, biopesticides, biofertilizers for agricultural uses
Considering the utilization of the microalgae biomass in agriculture the production of two added-value
products is considered (biostimulants and/or biopesticides), and additionally a low-value product
(biofertilizers) from the residual biomass. Because the biomass production capacity using improved
raceway and thin-layer cascade is different, a distinct economic balance is obtained for each one of
these technologies. Also three different qualities of products (regular, high and premium) are
considered, mainly related with the “purification” of the final product performed and the market for
which it is produced (cereals, trees and vegetables). In the case of biostimulants and biopesticides it is
considered that 1 litre of extract is obtained per kilogram of microalgae biomass whereas for
biofertilizers up to 10 litre of product is obtained per kilogram of microalgae biomass. Considering a
market price of biostimulants and biopesticides ranging from 5 to 25 €/l, and for biofertilizers ranging
from 1 to 10 €/l, results shows as the incomes from the utilization of the biomass for agriculture
products is highly positive whatever the final product and quality considered (Figure 18).
In the worst scenario, only the production of low price biofertilizers using raceway units give revenues
of 2400 k€/year, much higher than overall biomass production cost of 800 k€/year, including using
mineral fertilizers. Moreover, the production of high-value products as biostimulants or biopesticides
can generate additional incomes of 1200 or 2700 k€/year respectively. These data are based on market
27
prices in the range or even lower than other equivalent products from non-sustainable sources. Note
that in this economic analysis the cost of processing the biomass to obtain final added-value and low-
value products is also included, this cost ranging from 1 to 5 €/kg in the case of high-value products,
and from 0.2 to 1 €/kg in the case of low-value products.
60,000 Biostimulants Raceway 60,000 Biostimulants Thin-layer
Biopesticides Biopesticides
50,000 50,000
Biofertilizers Biofertilizers
Incomes, k€/year
Incomes, k€/year
40,000 40,000
30,000 30,000
20,000 20,000
10,000 10,000
- -
Regular High Premium Regular High Premium
Figure 18.- Incomes obtained at DEMO5 scale from target products for agricultural uses.
5.3.Production of feed additives and aquafeed for aquaculture uses
Considering the utilization of the microalgae biomass in aquaculture the production of high-value
product is considered (feed additives) in addition to a low-value product (aquafeed) from the residual
biomass. Feed additives correspond to extracts mainly containing lipids (fatty acids, carotenoids,
sterols, etc.) that can be used to formulate high value feeds whereas the remaining biomass containing
proteins, carbohydrates and non-extracted lipids can be used to formulate aquafeed. In this case up to
0.25 l of feed additives is considered to be extracted per kilogram of microalgae biomass, whereas 1
kg of aquafeed would be produced per kilogram of microalgae biomass. Because the biomass
production capacity using improved raceway and thin-layer cascade open units is different a distinct
economic balance is obtained for each one of these technologies. Also three different qualities of
products (regular, high and premium) are considered mainly related with the “purification” of the final
product performed and the market for which it is produced (young to old individuals). These products
are considered to have market prices from 2 to 20 €/l in the case of feed additives, whereas in the case
of aquafeed the market prices considered ranges from 1 to 10 €/kg.
Results shows as the incomes from the utilization of the biomass for aquaculture are less positive than
from the agricultural uses, but also it varies as a function of the final product and quality considered
(Figure 19). In the worst scenario, the production of low price aquafeed (1 €/kg) using raceway units
have incomes from 140 k€/year, lower than overall production cost of the biomass of 800 k€/year
using mineral fertilizers. To achieve positive economic balance, it is necessary to achieve prices upper
than 2.0 €/kg. However, the fabrication of high-value products as feed additives improves the
economy of the entire process. Thus, the fabrication of premium feed additives can proportionate
additional incomes from 140 to 1400 k€/year, for producing regular (2 €/kg) or premium feed
additives (20 €/kg), respectively. The range of prices determined is into the range or including lower
than other equivalent products from non-sustainable sources. Equal than in the case of agricultural
uses, in this economic analysis the cost of processing the biomass to obtain final high-value and low-
value products is also included, this cost ranging from 0.1 to 0.5 €/kg in the case of high-value
products, and from 0 to 0.2 €/kg in the case of low-value products.
28
7,000
Feed additives Raceway 7,000 Feed additives Thin-layer
6,000
Aquafeed 6,000 Aquafeed
5,000
Incomes, k€/year
5,000
Incomes, k€/year
4,000
4,000
3,000 3,000
2,000 2,000
1,000 1,000
- -
Regular High Premium Regular High Premium
Figure 19.- Incomes obtained at DEMO5 scale from target products for aquaculture uses.
5.4.Overall process
According to these numbers the portfolio of products to be obtained on SABANA project have
economic interest, although only some of them are economically positive when considering the
biomass production cost. It can be summarized that only the worst scenario, that to say the fabrication
of only the cheapest regular feed additive and the cheapest regular aquafeed have negative economic
balance (Figure 20). The production of high or premium aquaculture products have returns from 400
to 8.000 k€/year. In the case of agricultural products, including the worst scenario of producing regular
products allows to obtain returns upper than 14.000 k€/year, this increasing up to 65.000 k€/year in the
case of premium quality product. Only the completion of the project and the validation of real
products obtained into the market will allow stablishing the real final scenario on which the SABANA
process can be commercially successful.
Raceway Premium Thin-layer Premium

Feed additive+aquafeed High Feed additive+aquafeed High
Regular Regular
Biopesticides+biofertilizer Biopesticides+biofertilizer
Biostimulant+biofertilizer Biostimulant+biofertilizer
- 20,000 40,000 60,000 80,000 - 20,000 40,000 60,000 80,000

Overall balance, k€/year Overall balance, k€/year
Figure 20.- Overall economic balance (incomes-cost) for the SABANA project according to three
different scenarios and the two technologies considered.
6. HOW TO REDUCE THE PRODUCTION COST?

It has been previously indicated that the selection of an optimized location to improve the productivity,
to enhance the photosynthetic efficiency of microalgae by adequate control of culture conditions, and
to use free carbon dioxide and nutrients are the key issues to reduce the production costs (Norsker et
al., 2011). In general, there is a wide consensus about the major challenges to reduce the microalgae
biomass production cost. They include to reduce the cost of the technology, the cost of raw materials
to be used, the energy consumption involved into the process, the manpower required for the operation
of the facility, and finally to increase the size of the facilities to reduce the production by economy of
large scale. However, the first step must be to guarantee robust and reliable production systems, able
to produce all the year around, without fails or malfunctioning. Only from stable and safe production
systems it would be possible to improve the productivity and to reduce the production costs. Data here
reported shows as using open reactors it is possible to reduce the biomass production cost below 5
29
€/kg, and really close to 1.0 €/kg. Alternatively, it has been reported that using close photobioreactors
(tubular or flat panels) the unit production cost can be reduced to 0.70 and 0.68 €/kg, respectively,
whereas using open raceways it is not possible to reduce below 1.28 €/kg (Norsker et al., 2011). These
figures are based on the higher productivity and safe operation of closed versus open photobioreactors.
The type of photobioreactor have a large impact not only in the productivity but also in the production
cost because it largely determines the fix capital and finally the depreciation cost. It has been
reclaimed that to reduce the biomass production cost below 1.0 €/kg investment costs may not exceed
40 €/m2 (Hankamer et al., 2007). From the case study here analysed the fix capital per square meter
ranges from 18 to 43 €/m2 for thin-layer and raceway reactor respectively, thus confirming the
adequacy of planed technology.
Summarizing to reduce the microalgae biomass production cost the first step must be to think at large
scale, and to be able to develop robust processes capable to operate all the year around as base
scenario. From this pillar it would be possible to improve the efficiency of the process, so to reduce
the biomass production cost by optimizing the productivity or by reducing the cost of technologies and
materials to be used. Techno-economic analysis is a powerful tool to perform this optimization
process, also allowing to identify the target markets on which the biomass can be used thus
contributing to the expansion of microalgae based processes.
7. CONCLUSIONS
Although microalgae have been reported as promising raw material for a large variety of applications,
the current scenario is that today only high value applications on niche markets related with human
consumption are feasible due to the still high production cost of microalgae biomass, upper than 5
€/kg. To reduce the microalgae biomass production cost disruptive new technologies are required that
allows to increase in several orders of magnitude the current production capacity of 30.000 t/year.
Coupling of microalgae production with wastes treatment looks the most feasible option to largely
increase the microalgae biomass production capacity at the same time that reducing the biomass
production cost. On this document it is demonstrated that this option effectively allows to reduce the
microalgae production cost notably, but more when highly productive thin layer cascades are used.
However, still this technology has not been validated at industrial scale. Techno-economic analysis is
confirmed as a powerful tool to perform the optimization of whatever process, also allowing to
identify the target markets on which the biomass can be used, thus contributing to the expansion of
microalgae based processes. For the next future it is expected that more industrial facilities coupling
microalgae production and wastes treatment will be demonstrated, thus greatly increasing the
availability of microalgae biomass for non-human uses and reducing the production cost. This could
be the first step of a relevant change on microalgae biotechnology.
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33

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D1.2. COST AND ECONOMIC FEASIBILITY

Date: May 30th, 2018

To achieve final microalgae-based products for agriculture and aquaculture, suitable to be

1.2.KEY BENEFITS FOR SABANA STAKEHOLDERS

(3) We propose a simplified scheme to perform economic analysis of microalgae-based processes

2. COMMERCIAL APPLICATIONS OF MICROALGAE

2.2. High value products

Haematococcus is mainly produced as source of astaxanthin, a powerful antioxidant, and to be

2.3.Biofertilizers: biostimulants and biopesticides

Figure 6.- Complexity and volume of wastewater according to wastewater type.

2.6.Market of microalgae based products

3. MICROALGAE PRODUCTION CAPACITY

3.2.1. V/S ratio

3.2.2. Large scale reactors

Table 1.- General parameters for microalgae cultivation.

Parameter Low scale Large scale

4. ECONOMIC ANALYSIS METHODOLOGY

As example of proposed methodology the economic analysis of a production facility to produce

EQUIPMENT AND COSTS (€)

FIX CAPITAL PER YEAR

Item Raw materials Units €/und. Cost, €

1,000 Raceway 1,000 Thin-layer

Production cost, €/year

5.2.Production of biostimulants, biopesticides, biofertilizers for agricultural uses

5.3.Production of feed additives and aquafeed for aquaculture uses

Raceway Premium Thin-layer Premium

- 20,000 40,000 60,000 80,000 - 20,000 40,000 60,000 80,000

6. HOW TO REDUCE THE PRODUCTION COST?

Apt K, Behrens P. 1999. Commercial developments in microalgal biotechnology. J. Phycol.

Borowitzka MA. 2013a. High-value products from microalgae-their development and

Borowitzka MA. 2013b. High-value products from microalgae-their development and

Hernández-Carlos B, Gamboa-Angulo MM. 2011. Metabolites from freshwater aquatic microalgae

Lu Y, Xu J. 2015. Phytohormones in microalgae: A new opportunity for microalgal biotechnology?

Oswald WJ, Goleuke CG. 1967. Large-scale production of algae.

Richmond A. 2004. Handbook of microalgal culture: biotechnology and applied phycology/edited by

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