San Diego-based Cellana, a developer of algae bioproducts, has signed a commercial-scale agreement with Neste Oil, the world's largest producer of renewable diesel.
Under the off-take agreement, Neste Oil has agreed to purchase large volumes of Cellana’s algae-based crude oil if Cellana can increase its future production capacity.
Cellana grows its oil-rich algae at its facility in Hawaii, using sea water in photo-bioreactors and open ponds.
"Depending on the production scale-up, the volume that Cellana could supply could be up to thousands or even tens of thousands of tons of algae-based crude oil," said Martin Sabarsky, CEO of Cellana.
Sabarsky said the deal is a milestone for the entire algae biomass industry.
“And in many ways it represents, in our opinion, the holy grail of what the U.S. government, various European governments, and an increasing number of governments and people across the world want to see, which is a more sustainable fuel or energy mix," said Sabarsky. "But not necessarily that costs more either.”
Stephen Mayfield, professor of molecular biology at UCSD, said Cellana’s success stems from its efficient business plan that monetizes every part of their product.
“It’s not just that they’re selling fuel," said Mayfield. "They actually have a process that is, ‘we’re going to make some high value products --Omega 3 oils -- and then some of that oil is not going to be as high value and that’s going to become biofuel.'
"The expression in pigs is, 'the only way you make money on a pig is if you sell everything but the oink,'” Mayfield added.
Mayfield said Cellana is the third California-based algae biofuel company to strike a significant commercial deal. He said that’s a good sign the industry is maturing.
"This helps the community stay the course," said Mayfield. "It helps the community see that we’re having successes and that we’re continuing to move the ball down the field."
San Diego is widely recognized as one of the world’s leaders in algae biofuel research and development.
