Big oil companies stop funding algae biofuel research

Seaweed once seemed a promising alternative to fossil fuels. But all the major oil companies have now withdrawn their funding for research into algae-based biofuels. Among the reasons are continued subsidies for fossil fuels.

ExxonMobil’s withdrawal from algae-based biofuels comes as no surprise to industry experts. As the Guardian reported, investment in algae research was too small to make the technology commercially viable, despite the company investing 350 million dollars in its development.

Some, however, point out that the research was often merely a marketing tool for traditional fossil fuel companies. Exxon, for example, said that promoting the potential new biofuel cost it almost half as much as the company invested in the research itself. Oil companies are turning away from development despite announced record profits.

Electrification of transport reduces demand for liquid fuels

Commercialising the technology would require several billion dollars, experts point out. In addition, algae have become less attractive as a feedstock for biofuels over the years, as it has become increasingly clear that the world is moving towards the electrification of transport. This reduces demand for liquid fuels.