INTERVIEW: HutanBio seeks to go from litres to tonnes with high-energy desert-grown algae

HutanBio says it has sifted through a trillion algae samples to find a family of energy-rich species that had never been catalogued before.

IMAGE: Algae samples. HutanBio

“Fundamentally, we’re trying to solve the same problem that lots of people across the industry are, which is how do we decarbonise long-distance transport?” chief executive Paul Beastall tells ENGINE.

The firm pitches algae oil as a low-carbon “drop-in” replacement that can be stored, pumped and combusted much like today’s gasoil, sparing shipowners the cost of new engines or cryogenic systems to run on alternative fuels like LNG, liquefied biomethane or e-fuels.

“Our core hypothesis is that it’s only really hydrocarbons that have the energy density and the ability to be stored and transported at standard atmospheric temperature and pressure, and that can effectively be retrofitted without needing to change equipment,” Beastall says.

Casting the net wide

HutanBio is far from the first company to explore algae’s potential as a fuel. But others have not looked as far and wide for the right kind of algae.

“Everybody else who’s looked at algae biofuels has started with an off-the-shelf algae from a university library or from one of the national research institutes.”

HutanBio took another route, screening more than a trillion samples, stress-testing 140 species for heat, salinity, light and oil yield, and discarded lots of them to end up with high-density triglycerides. Roughly 80 of those were new to science, giving the team a proprietary starting point.

“We went out and sought the algae that fit the problem best…it’s down to the research and literally just looking all over the place for the right algae.”

Others have been looking off the coast of the US or Western Europe because that’s where universities and research institutions are located. They’ve tried to engineer it to improve performance, but not worked with the right kind of algae in the first place.

“We’re pretty confident we’ve got something special,” Beastall argues.

HutanBio has patented the evolved algae and its production technology. And now that HutanBio claims to have cracked the algae challenge by finding a unique and high-performing strain with potential for scale, will others try to replicate it?

“They can try. … Will somebody go and copy it? Possibly. Can they find it? Probably not, unless they steal it from us,” Beastall says.

Scaling in deserts

The company will raise new capital in 2025 to leap from litre batches to tonne-scale output by building its first desert algae farm. Coastal locations with abundant sunlight and seawater access - such as Western Australia - are on the shortlist, but no site is fixed yet.

“As much as we can in the early days, it makes sense to try and sell it close to where it’s made. It helps the carbon case,” Beastall says.

Once a pilot farm is proven, more desert farms would follow to add capacity in modular blocks. Beastall estimates that “massive oil farms” would be needed to theoretically serve the whole shipping fleet. But that is not the point, at least not yet, as HutanBio as a start-up needs to do things step by step.

A challenge with building algae farms in coastal desert land areas is that there are not many big ports in these areas. HutanBio has also been speaking to authorities and fuel suppliers in ports that are not close to deserts, like Rotterdam and Singapore, and call these forward-thinking.

The aim is to get proof of concept and then financial backing to move into the hundreds of mt.

Confidence-building

There is also generally a lack of knowledge about algae as a fuel. Not many people understand it, which makes scaling it trickier, Beastall argues.

First up is building confidence in the market by testing against marine fuel standards, before engine testing in labs and eventually at sea.

Uniform chemistry should simplify ISO 8217 marine fuel testing and ship engine trials. HutanBio’s algae oil is uniform because it’s made from a biological process, and has C16-C18 hydrocarbon chain lengths. This is a narrower range than you get for fuel oil.

“What comes out is not like a barrel of crude oil where there’s all different chain lengths of hydrocarbons,” Beastall explains.

The algae is 2 billion years old. The company’s scientific founder John Archer has a hypothesis that crude oil extracted from places like the Middle East today is made from relatives of the algae used by HutanBio.

“We’re kind of already there,” Beastall says, noting that the algae “is an ancient microorganism” with about 98% of MGO's energy density, so ships would see little or no loss of range.

Ships and planes

HutanBio will market the algae oil in two main streams. One is a finished bunker fuel that can be blended directly with VLSFO or MGO. The other is a feedstock for sustainable aviation fuel (SAF) production in refineries.

Selling bunkers first keeps the supply chain shorter. Beastall says that by selling it as a marine fuel, the company has “direct access to the market and that is a huge advantage for us to maintain our independence and flexibility.”

Pricing will be in the range of more established marine biofuels like fatty acid methyl ester (FAME). The aim is “hundreds of dollars per tonne, not thousands."

SAF refiners will inevitably take a processing margin, but how large that will be is still unclear, Beastall notes. And they control the jet fuel delivery networks, leaving HutanBio with less pricing power than in the marine market.

Supply squeeze

Tighter IMO targets for ship emissions, and EU emission targets for all sectors, are set to eventually squeeze waste- and residue-based biofuel supply.

There are structural limits on how much used cooking oil (UCO) or palm oil mill effluent (POME) the world can produce into sustainable biofuels. This has prompted some producers and suppliers to experiment with alternative biofuel feedstocks such as cashew nut shell liquid (CNSL), which carry stability risks at higher blend percentages.

Beastall thinks the marine biofuel market could get tight as emission reduction targets increase. There could be a shortage, and prices could rise. If there is not enough to go around, that is a good position for HutanBio to be in, he says.

When asked how much of its volume will go to shipping versus aviation, Beastall says: “That’s up to the market and regulations to decide.”

He expects a mixed-fuel future where multiple technologies compete, but believes drop-in algae oil offers one of the fastest transition tracks.

For now, the company is concentrating on scaling gradually and winning customer trust before worrying about total market share.

“People ask me often, who are your competitors? And I’m going to say I hope everybody’s successful because we’re facing a climate emergency and actually we need lots of solutions.”

By Erik Hoffmann

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