Algae have a tendency to have a much different makeup than does most feedstocks used in ethanol, such as corn and sugar cane. Ethanol from algae is possible by converting the starch (the storage component) and Cellulose (the cell wall component). Put simply, lipids in algae oil can be made into biodiesel, while the carbohydrates can be converted to ethanol. Algae are the optimal source for second generation bioethanol due to the fact that they are high in carbohydrates/polysaccharides and thin cellulose walls

It’s not that it’s difficult to make ethanol from algae.

Veridium Corp is a subsidiary of GreenShift. (Mar 2006)

The real problem is that there are so many more valuable products to produce from it, such as carrageenan, agar, and dozens of valuable compounds. In comparison, alcohol is a low-priced product.

Algae Species for Ethanol Production

Some prominent strains of algae that have a high carbohydrate content and hence are promising candidates for ethanol production.

• Sargassum
• Glacilaria
• Prymnesium parvum
• Euglena gracilis

Process behind Ethanol from Algae

Fermentation process to produce ethanol include the following stages:
(a) Growing starch-accumulating, filament-forming, or colony-forming algae in an aqua culture environment;
(b) Harvesting the grown algae to form a biomass;
(c) Initiating decay of the biomass;
(d) Contacting the decaying biomass with a yeast capable of fermenting it to form a fermentation solution; and,
(e) Separating the resulting ethanol from the fermentation solution.
Initiating decay means that the biomass is treated in such a way that the cellular structure of the biomass begins to decay (e.g., cell wall rupture) and release the carbohydrates. Initiating decay can be accomplished mechanically, non-mechanically. The yeasts used are typically brewers' yeasts (Saccharomyces cerevisiae and Saccharomyces uvarum). Besides yeast, genetically altered bacteria know to those of skill in the art to be useful for fermentation can also be used.

Ethanol from De-oiled Algae

Overall, the algal biomass comprises three main components – Carbohydrates, Proteins and Lipids. Once the lipids have been extracted the left-over cake is primarily composed of carbohydrates and proteins. Carbohydrates in the left-over algae can be converted into sugars. Depending on the strain, the sugar can either be simple or complex. Thus, the left-over be used as feedstock for ethanol.
Algae cake that is left over after extraction of oil for biodiesel can be converted into ethanol through fermentation of the extract. This gives rise to the interesting possibility of producing both biodiesel and ethanol from algae! Add to this the fact that fermentation of algae extract to ethanol releases CO₂, which can again be fed to grow more algae. Such a closed loop presents an attractive potential on which some initial trials are on-going.

Research on ethanol production:

Ethanol from Seaweed in Japan

•    Japanese scientists and corporations working to create ethanol from seaweed.- researchers in Japan are doing, namely, trying to create ethanol from Sargassum seaweed (Apr – 2007)
•    Seaweed Bioethanol Production in Japan, titled the "Ocean Sunrise Project", aims to produce seaweed bioethanol by farming and harvesting Sargassum horneri, utilizing 4.47 million km² (sixth largest in the world) of unused areas of the exclusive economic zone (EEZ) and maritime belts of Japan. Through seaweed bioethanol production, the Project aims to combat global warming by contributing an alternative energy to fossil fuel. This paper outlines the results of the project's feasibility research conducted by Tokyo Fisheries Promotion Foundation. (Year 2007)

Saccharification of marine microalgal biomass for bioethanol production using marine bacteria

Mitsufumi Matsumoto*, Hideaki Miyashita, Tadashi Matsunaga
Department of Biotechnology, Tokyo University of Agriculture and Technology

Bioethanol production from marine algae will be divided into two major processes. One is a saccharification of starch to sugar and other is the fermentation process by yeast. In the saccharification of starch, enzymatic processes using amylase have been applied. Aspergillus sp. and Bacillus sp. produce large amounts of extracellular amylase, and are commonly used. However, desalinination process might be required to develop a direct bioethanol production from marine algal biomass. Therefore, marine amylase may be more suitable for saccharification of marine algal biomass. we investigated amylase production by marine NKMB 0074 and saccharification of microalgal biomass with high starch contents (Year 2003)

Whilst macroalgae is a proven source of biomass for ethanol and methane production, microalgae is also considered by scientists to be a promising source of biodiesel.
http://www.climatechangecorp.com/content.asp?ContentID=5704