South Australian production of biodiesel from microalgae is a step closer with the grant of $1.2 million to Flinders University and South Australian Research and Development Institute (SARDI) from the Premier’s Science and Research Fund.

The joint project, with a total investment of $4.1m and led by Flinders biotechnologist Associate Professor Wei Zhang [pictured], will develop a proof-of-concept facility.

Two hundred square metres of cultivation systems will be used to produce microalgae biomass, from which natural oils and other biomaterials will be extracted for conversion into biodiesel and other high value products.

Dr Sasi Nayar from SARDI will lead the development of microalgae production system.

While the search for alternative sources of fuel is the driving force of the project, Associate Professor Zhang said that the commercial viability of a microalgal feedstock industry will initially hinge on the higher value by-products.

“The are two aspects to the project: one is to produce a microalgae biomass, preferably with high oil content of 30 to 40 per cent. When the oil is extracted, it can be used for biofuel production,” Associate Professor Zhang said.

“The second component is to produce high-value products from the residue.”

He said the project takes its model from the petrochemical industry, which produces profitable value-added chemicals as well as petroleum fuels, its basic product.

“For this reason, we are calling it a bio-refinery,” Associate Professor Zhang said.

Flinders will be involved in production of the value-added products from the biomass.

One example is development of methods to fractionate Omega-3 polyunsaturated fatty acids from the algal oil.

“Biodiesel is worth around one dollar a litre: pharmaceutical grade Omega-3 fatty acids can fetch up to $100 a litre,” Associate Professor Zhang said.

Glycerol, which can be processed into high-value chemicals widely used in the production of paint and plastics, is another potentially profitable by-product: every 10 litres of biodiesel production yields one litre of glycerol. This area of research is conducted by Dr Stephen Clarke of the Flinders Materials and Bioenergy Group.

Key personnel involved in the project include Professor Chris Franco, Mr Raymond Tham and Dr David Kehoe.

Associate Professor Zhang said the first generation of biofuel companies had not only relied on food sources that proved too expensive and unsustainable, but also followed a model that ignored commercial realities.

“At current prices, producing fuel can only cover basic costs – profits will have to come from the value-added products,” he said.

“The Flinders-SARDI project is championing the bio-refinery concept, and it is an approach that is crucial to the future viability of a biofuel industry in Australia.

“It makes economic sense to develop a biochemical industry in parallel with the biofuel capability. From one sustainable source material it is possible to produce a lot of environmentally friendly products for many industry sectors.”