Economic and policy issues in the production of algae-based biofuels: A review

Despite the initial environmental and supply benefits associated with conventional biofuels leading to substantial policy support, research has indicated that these benefits might have been overly optimistic. Negative externalities associated with food and resource allocation have also resulted in an increasing scepticism about the long-term potential of transitioning to biofuels. This review presents the economic benefits and costs surrounding conventional biofuels and suggests the need for further development of a third-generation feedstock based on algae. The article provides guidance on the potential for a policy framework for supporting microalgae as a source of biofuels given the numerous associated positive externalities.