Why the Algenol – Dow Algae Joint Venture is a Big Deal

Biofuels Digest reported today that Algenol and Dow have partnered on a joint venture in Florida to build a 24 acre algae demonstration facility for bioplastics. I think this announcement is a big milestone for algae, biorefining and bioplastics.
Here’s why:
1. Dow has deep pockets. With revenues of $57 billion, Dow ranked 38th on the 2009 Fortune 500 list. This is a company with serious financial muscle.
2. Dow may be initiating a series of strategic moves to build out a portfolio of biorefining technologies and capabilities. The faster Dow moves away from petroleum the better. According to Sustainability Ninja, Dow ranks third on its List of the 100 Worst Corporate Polluters in America. The PR ding for this is significant, but the threat of greenhouse gas regulation looms even larger. Cap and trade, as proposed under Waxman Markey is both a threat and opportunity. The threat is that Dow will be taxed so heavily as to lose its ability to generate profits. The opportunity is that, depending on the amount of allowances it is grandfathered, Dow could be sitting on a goldmine of carbon opportunity if and when it ramps up carbon-neutral/carbon-positive operations (then sells the credits off to lagging polluters without a coherent biorefining or biofuels strategy.
3. Algae, a technology that has been knocked as being “5 years away” for the past 20 years, appears poised to ramp-up. A recent analysis in Biofuel Digest predicts 1 billion gallons of algal fuel production by the year 2014 .
4. The prospect of biomaterials such as bioplastics opens up a new avenue for the sustainable production, handling and disposal of organic materials to replace petro based materials. Advantages include carbon-neutral or even carbon positive production, reduced dependence on foreign oil and, importantly, biodegradability. Plastics in their current form break down slowly, if at all. Recycling is good, but it comes at a high price in terms of energy used and recycling facilities, and has limitations, including a significant reduction in the structural properties of recycled materials.