NEWS RELEASE

FOR IMMEDIATE RELEASE

ALGAE STUDY HIGHLIGHTS WINNERS AND LOSERS IN 
BIOFUELS, BIO-PRODUCTS FROM 2011-2020

February 22, 2011 - (Houston, TX) - In a market research report released today, Algae 2020, Vol. 2  Emerging Markets Online highlights why some algae companies will be winners and some will be losers bringing their product from pilot to commercial scale from 2011-2020. The report concluded that of all the current algae production companies, R&D ventures and public-private partnerships currently in play, less than a dozen will graduate into pre-commercial, deployment-stage algae ventures using pond, photo-bioreactor and fermentation based production systems. Many of these winners will expand globally and multiply leading to hundreds of projects, markets, products, and co-branded ventures. Others will be left behind.

A unique element of this study is that lead author and algae commercialization expert Will Thurmond interviewed more than 200 CEOs and key researchers from algae related companies in person including universities, research labs, public-private partnerships, collaboratives, and large companies and performed 30 algae site visits in person. Traditionally, most reports of this magnitude have gathered their intelligence from information gathered from the internet and other published reports.

“For the Algae 2020 study,  I did my research the old fashioned way, where you conduct an on site visit, you kick the tires, and you say I understand you're producing algae and you have a pilot project. Show me," said Thurmond. "While I was on site I conducted interviews with CEOs and various staff scientists, took pictures, analyzed the data, and determined three common strategies of companies that are attracting investment capital and scaling up."

The study found three key strategies that determine which companies will attract capital and scale up their enterprises while others will be perpetually stuck in the laboratory or garage, many never even scaling up to small, test-pilot phase.

Strategy #1: Algae Long-Term Winners Focus on Drop-In Fuels and Biofuels.  There are about a dozen leading algae companies that have successfully progressed into pilot and demonstration scale projects. Why? In addition to being able to produce either ethanol or biodiesel, these organizations are also able to produce drop-in replacement fuels like biojet and renewable diesel that are in high demand today by various industries including oil and gas, aviation, petrochemical, and the U.S. military.

"The current winners are focusing on diversifying their fuels beyond just algae for biodiesel," said Thurmond. "They're focusing on algae for ethanol, and algae for drop-in replacement fuels like renewable diesel, biojet fuel, and biobutanol for early stage commercial and defense customers. This is what the market demands. These are what the companies are gearing up to produce at scale. It is not an R&D technology push strategy. If you're simply pushing a technology you are most likely to fail. The winners focus on a market pull or demand-based strategy."

Strategy #2 Algae Short-Term Winners Target Diversified Markets.  
Algae 2020 discovered that most winning algae producers are diversifying their short-term focus on high-value products including: omega 3s, health products, cosmetic, pharmaceutical, and specialty chemical uses, and some mid-value markets like livestock and fish meal, renewable chemicals. This allows a company to bring in revenue to pay the bills and establish brand identity while scaling up their operations over time to commercial scale biofuel production.

"I've concluded this is a short-term and short-sighted strategy, since most of the "higher value" markets are small in size, limited in competition, and will be quickly saturated by the long-term players as they reach economies of scale for biofuels production," said Thurmond. "There are a few exceptions in higher and mid-value value products which I've revealed in the Algae 2020 study that will find long-term success."
 
Strategy # 3 Algae Winners Bring Together R&D Labs, Universities and Public-Private Partnerships.
The third key finding from Algae 2020 study: among R&D and start-up related algae projects, the winners attracting government grants, funds, or private funds share the following in common. These winners bring together “collaborative clusters”of research labs, industry, government, academia, cleantech investors, and producers to share and collaborate on key technology challenges and market demand-based opportunities.

Thurmond notes, "Collaboration creates economies of scale, more access to funds, more access to private and public interests in the marketplace, and ultimately will be more than likely create the environment to bring algal biofuels to market sooner than their competitors. If it is simply one university or start-up doing research & development without the benefit of interaction with other entities, they're going to be caught in their silos, and severely limited in their R&D, project, and technology licensing endeavors."
 
The report concludes that if algae companies and R&D ventures engage in the above strategies, as detailed in the Algae 2020 study, they are more likely to attract the needed investment dollars, and ultimately more likely to scale up from the R&D stage to demonstration and commercial  scale, thus becoming an algae winner rather than an algae loser.

To learn more in the Algae 2020 study (Vol. 2), published by market research firm Emerging Markets Online, visit www.emerging-markets.com or contact: Will Thurmond, author and principal investigator and CEO of Emerging Markets Online at info@emerging-markets.com or at 713-429-4905.