Algal biofuels used to drive a renaissance of algal technologies in the early 2000s. The big potential did not materialise mainly due to economic non-feasibility. Algal biomass simply cannot be produced at a cost comparable to agricultural crops. The potential is, however, still there: if/when fossil fuels become expensive enough, the demand for energy crops and the competition between fuels and food will again call for algal feedstock that may be produced on non-arable land or in seawater. There are some applications that genuinely demand high-energy-density fuels, like sustainable aviation fuels (SAF) or sustainable freight fuels (trucks and ships).

Biogas is not always considered a biofuel, but when it is, it is the most area-efficient fuel. So we will focus mainly on algae and biogas as synergistic technologies.

Algal biomass is a substrate for biogas production via anaerobic digestion, and a feedstock for various liquid biofuels. This chapter covers the EU renewable energy framework as it applies to algal bioenergy, the sustainability criteria that algae must meet to qualify as a renewable fuel, the ABP and waste law interface for digestate from algae, and the emerging carbon farming context.

Algal bioremediation may also be used to treat the liquid fraction of AD digestate. The approach is relevant in situations where a high nutrient dilution rate represents a logistical or agrotechnical obstacle to distributing AD digestate for agricultural use. These approaches are also relevant in nitrogen-limited zones where the nitrogen content of the AD is non-local and cannot be returned to agricultural use in the area.

Even in cases of AD of aerobic wastewater sludge, when the liquid digestate is returned to the WWTP secondary stage, the algal pretreatment of the liquid phase of AD digestate can decrease the nitrogen load significantly.

AD digestate may also represent an efficient and low-cost nutrient source for algal cultivation for certain algal products. When biogas is used in CHP, the exhaust can be used as the CO₂ source for algal cultivation. Finally, in these cases there is often a supply of heat (from cooling exhaust or from cooling of the biogas-operated engine) that may be used to heat (or even to cool - via absorption chillers) the algal cultivation media.

This chapter is focused mainly on use of algae as bioguels and biogas substrate. Regulatory aspects of digestate bioremediation and other topics are covered in the chapter Waste, wastewater and nutrient recovery.

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (recast) (RED II), OJ L 328, 21.12.2018, p. 82 EURlex, as amended by Directive (EU) 2023/2413 (RED III) EURlex.

Relevance to algae: The Renewable Energy Directive (RED II, as amended by RED III in 2023) establishes the framework for counting and promoting renewable energy in the EU's energy mix. Algae are explicitly mentioned in the Directive as a feedstock for advanced biofuels (Annex IX, Part A). Key provisions:

• Advanced biofuels (Annex IX Part A): algae, seaweeds, and microalgae that do not require arable land to grow are listed as feedstocks eligible for the advanced biofuel category, which receives double-counting credits in EU member state national targets. This is a significant commercial incentive for algae-to-biofuel pathways.
• Sustainability criteria (Art. 29): biofuels, bioliquids and biomass fuels must meet binding sustainability criteria to count towards renewable energy targets. The key criteria relevant to algae:
  1. Greenhouse gas (GHG) saving threshold: fuel must achieve a minimum GHG saving compared to the fossil fuel comparator (currently 65% for fuels from new plants). The GHG saving must be calculated using the methodology in Annex V or VI.
  2. Land use and biodiversity criteria: biomass must not come from areas with high biodiversity value (primary forest, designated protected areas, highly biodiverse grasslands) or high carbon stock (wetlands, peatlands, continuously forested areas). Algae grown on non-arable land, in sea water, or in closed systems generally satisfy these criteria more easily than terrestrial energy crops.
• Biomethane and renewable gases: algae-derived biomethane (biogas upgraded to natural gas quality) can be counted under the RED II framework as a renewable gas; rules on guarantees of origin and sustainability certification apply.

The GHG saving calculation methodology specified in Annex V and VI of RED II is detailed and requires either:

• Use of the published default values for specific feedstocks and pathways (where available — algae-specific default values are limited); or
• A disaggregated (actual value) calculation following the methodology defined in the Annex, accounting for actual cultivation energy use, processing energy, transport, and co-product allocation.

The BioGrace calculation tool (developed under a European project and freely available) provides a spreadsheet-based methodology for calculating GHG savings in compliance with RED II requirements. It is widely used by biofuel producers and their certification bodies.

The GHG savings from algae-derived biofuels can be high in principle (algae require no agricultural land and can capture CO₂) but the calculation depends critically on the energy input to cultivation (lighting for closed systems, CO₂ supply - bubbling, pumping). High energy consumption in cultivation can significantly reduce the net GHG saving calculation, and in some cultivation scenarios may fail the sustainability threshold. Producers developing algae-to-bioenergy pathways should model their specific system's GHG footprint before assuming eligibility.

Biofuel sustainability criteria must be demonstrated through certification by a recognised voluntary scheme (or national certification systems meeting equivalent criteria). The Commission recognises several voluntary schemes under the RED II framework, including:

• ISCC (International Sustainability and Carbon Certification)
• Bonsucro
• RTRS
• Others listed in the Commission database

For algae-derived biofuels and biomethane, ISCC is currently the most widely applicable scheme, as it covers a broad range of feedstocks including algae. Producers seeking to sell algae-derived fuel into the EU renewable energy market must obtain certification from a recognised scheme before making sustainability claims.

Anaerobic digestion (AD) of algal biomass produces biogas (a mixture of methane and CO₂, with minor contaminants) and a liquid/solid digestate. Both products have regulatory implications:

Raw biogas can be used for on-site heat and electricity generation; upgraded to biomethane, it can be injected into the gas grid (subject to grid injection rules, which vary by member state) or used as vehicle fuel. In all cases, counting towards renewable energy targets requires sustainability certification as described above.

Digestate is the post-digestion residue from AD. Its regulatory status depends on the nature of the input material:

• Digestate from algae grown on non-ABP substrates (e.g. from clean cultivation water, without animal-origin materials) may be eligible for use as a fertilising product under the FPR CMC framework or under national fertiliser law, subject to contaminant testing (Annex I to the FPR).
• Digestate from algae grown on ABP-containing substrates (manure, fish waste) is governed by the ABP Regulation and must be processed and used in accordance with the applicable ABP rules (see Animal By-products).
• The waste law status of digestate (whether it has exited waste status) is also relevant; see Waste, Wastewater, Nutrient Recovery and End-of-Waste.

Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide, OJ L 140, 5.6.2009, p. 114. EURlex

Relevance to algae: Algae are studied as a biological carbon capture mechanism, particularly in the context of CO₂ utilisation in algae cultivation. CO₂ from industrial flue gases is increasingly used as a nutrient input for photosynthetic microalgae, and the resulting biomass sequesters carbon in organic form. This is not “geological storage” for the purposes of the CCS Directive (which governs capture and geological injection of CO₂), but it is increasingly relevant in the context of the EU Carbon Removal Certification Framework (see Greenhouse Gases and Climate).

• Advanced biofuel designation (Annex IX Part A) is a significant commercial advantage — if algae biomass qualifies, biofuel derived from it is double-counted in member state targets, creating market demand; confirm your feedstock qualifies before investing in this market.
• Model the GHG saving for your specific production system before committing to the biofuel market; high cultivation energy consumption can reduce or eliminate the GHG saving claim.
• Obtain certification under a recognised voluntary scheme (ISCC recommended) before selling biofuel or biomethane on the EU renewable energy market.
• Digestate quality from algae AD systems must be tested and its regulatory status under the FPR and/or ABP rules determined before it can be sold or used as a fertilising product.
• Grid injection of biomethane requires national regulatory approval (grid injection licence) in addition to sustainability certification; rules vary significantly between member states.

See also: Greenhouse Gases and Climate | Waste, Wastewater, Nutrient Recovery | Animal By-products | Fertiliser Product Regulation

Last reviewed: June 2026.