Algae.Tec has signed a deal with government-owned power company Macquarie Generation to site an algae carbon capture and biofuel production facility alongside a 2640MW coal-fired power plant in Hunter Valley Australia.
This first of its kind deal will capture an estimated 270,000 tons of carbon dioxide, which will be fed into an algae bed and converted into biodiesel. The Australian facility is expected to cost $140 million and the company has begun initial talks with funders and hopes to close its first round by the end of the year.
Algae.Tec has secured an off-take agreement with Biodiesel Industries Australia to put the fuel to use in the local area for transportation and mining.
Algae.Tec also made headlines last September when it signed a deal with German airline Lufthansa to build an aviation grade biofuels plant, but has come under construction delays and not yet come online.
In the wake of President Obama’s speech on climate change, utilities and power producers in the US can be expected to face new restrictions on CO2 emissions. As such, carbon capture has once again become a major topic of conversation. In fact, a new report estimates that the US could store a mean of 3,000 metric gigatons of carbon dioxide (CO2) in geologic basins throughout the country. Understandably, coal proponents point to this study as a reason to keep the status quo.
However, its important to remember that adding capture technology to plants is expensive, in the many millions depending on the size of the facility. Because the emissions are treated as waste, this is pure expense. The Algae.Tec project could showcase a new model for carbon mitigation – recycling CO2 emissions into valuable products rather than burying them. This approach flips the economic proposition on its head – turning a cost center into, ultimately, a profit center.
This is a compelling economic and environmental argument that we hope will continue to get traction as companies like Algae.Tec succeed.
UPDATE: Biofuels Digest had an excellent interview with the Chairman of Algae.Tec last last week, which can be found here.