The Ecosystem: start-ups look for greater coherence in EU algae strategy

Start-ups working with algae and researchers with related technology to commercialise are to get targeted support from the EU under a new strategy drawn up by the European Commission. But there are concerns the initiative puts too much focus on established methods for seaweed farming, while neglecting innovation.

“Overall, I think it is a good thing that this is on the EU agenda, because it creates an interest around algae as a raw material,” said David Erlandsson, co-founder and sales director of Aliga Microalgae in Denmark. “But as our main focus is to produce and promote algae as a food ingredient, I’m not sure if EU really is aware of the food industry’s requirements on volume, quality, colour and taste in order to embrace algae as a core ingredient.”

Erlandsson sees a tendency for the Commission to focus on seaweed and microalgae that is grown outdoors, consuming carbon dioxide in the process. Such cultivation methods have potential benefits for addressing climate change, but the biomass is not necessarily ideal for the food industry.

“The EU strategy mainly focuses on phototrophically cultivated algae, which naturally is rich in colour and algae flavours and very well suited for the dietary supplement field, or animal feed. But if you want to get into the food segment with algae, you really need to offer algae products with more neutral colour and taste, which is very difficult to produce with traditional growing methods,” Erlandsson said.

Mari Granström, chief executive and founder of Origin by Ocean in Finland, also welcomed the EU strategy for putting a spotlight on this developing sector and giving it some legitimacy. But she would like to see it result in greater consideration of unconventional sources of algae. “It’s very important to have this discussion about the kind of seaweed you are using, whether it is wild-harvested, or farmed, or invasive species, like we use.”

Origin by Ocean was founded in 2019 with the idea of harvesting invasive or polluting algae and using them to produce functional ingredients for industry. Top of the list of invasive species is the sargassum seaweed that inundates the Caribbean, and is increasingly problematic in southern Europe. Polluting species include the toxic blue-green microalgae that carpet water enriched by nutrients, for example in the Baltic.

Most European governments have a blind spot when it comes to allowing these kinds of algae to be harvested, with the presumption that any resource that isn’t farmed should remain untouched. “It’s such a new thing that it is difficult to have that conversation in the EU,” Granström said. “It’s happening elsewhere, for example in the Caribbean, where we are building a supply chain, but not in Europe, because it hasn't yet threatened our economies in the same way.”

One strategy, all the algae

The Commission’s strategy for the EU algae sector, published on 15 November, covers a wide range of uses for algae, from food and biofuel, to pharmaceuticals and climate change mitigation. In this way it is positioned as a lynchpin of EU policies, such as the Farm to Fork strategy for sustainable food systems, and the Green Deal for decarbonisation.

Initiatives are proposed to improve the commercial environment, to increase social awareness and acceptance of algae and algae-based products by consumers, and to close knowledge, research and technology gaps. Measures will be explored to support the transfer of technology from research to market, and pilot projects funded for small companies.

Having such a broad approach makes sense at the current stage of development of the algae industry, according to Jayne Brookman, director of the north west region for the European Institute of Innovation and Technology (EIT) Food knowledge and innovation community. “There are a lot of common requirements, for example understanding growing media, processes and scale-up, and companies are then going to be in a situation where they are able to look at a lot of different markets,” she said. “And that decision-making process is also something companies will have in common.”

It is also useful to bring together people with a range of different backgrounds. “You have the ability to forget about the market sector of a particular problem, and consider the challenge from the perspective of other industries,” Brookman said.

The strategy places particular emphasis on technology transfer from universities and other parts of the science base, and on the need to work on public perception, particularly when it comes to foods based on algae. Both will be helpful, Brookman thinks, but attention also needs to be paid to the path from one to the other.

“Between the technology push and trying to generate customer pull, there is often a long supply chain, with large and important actors, and you need to win their hearts and minds as well as the end consumers,” she said. This will be important as start-ups move out of development and into scale-up. “If you accelerate one part of a supply chain, you need to ask: is the next part ready to accept that new approach or those new technologies?”

Another important part of the scaling-up challenge is access to facilities for running pilots. While start-ups in conventional agriculture have little trouble finding farms of varying sizes on which to pilot new approaches, this is not so simple for companies working with algae. “That infrastructure is not really present at the moment,” said Brookman.

Fermentation versus farming

Aliga Microalgae was set up in 2016 by Erlandsson and Michael Krag Nielsen, to develop food ingredients from Chlorella microalgae grown in fermenters. Rather than sunlight and carbon dioxide, these algae need glucose to grow, rather like yeast in a brewery. The result is a much more controlled production process, which is aligned with the requirements for use in food. “The food industry is looking for a product with no contamination, that delivers the same quality batch after batch, and can be scaled up to give big volumes,” Erlandsson said.

But the important step for Aliga was the development of a chlorophyll-free white Chlorella strain, which it patented in 2021. Now it can produce a plant-based protein-rich algae ingredient that is colourless and has a neutral taste, which can be used as complement to soy, pea, and wheat in a wide range of foodstuffs. This is the kind of innovation that will be needed to unlock the potential of algae as a food ingredient, rather than trying to change public attitudes.

“There is a massive opportunity to use both seaweed and microalgae in food, but there are also inherent challenges linked to its strong colour and flavour. That’s what you need to overcome, and that’s what is missing from the EU’s approach,” Erlandsson said.

Hand in hand with new technologies like this, there is a need to update the regulations covering algae as foodstuffs. At the moment, any species of algae not consumed before 1997 are treated as novel foods, and must go through a lengthy approvals process. “There are so many more species around that are rich in nutrients and micro-nutrients, which were not consumed before 1997, and to get those approved can take forever,” said Erlandsson.

The long approval processes undermine the exploration of new species and restricts the use of algae as a food source. “The EU needs to support the industry more and open up for the usage of more algae species in human consumption,” said Erlandsson.

Aliga Microalgae is now scaling up production, both at home in Denmark and with a newly purchased facility in the Netherlands, which it bought in August. Currently with 25 staff in Denmark and the Netherlands, the company has grown so far without raising venture capital.

Exploiting invasive species

Origin by Ocean was started by chemical industry insiders, and has invested in harvesting technology, biorefining techniques, and product formulations, with the aim of creating high-value ingredients. These include thickening agents, anti-oxidants, biopesticides, and pigments that can be used by the cosmetics, food, agriculture, textiles and agriculture industries, among others.

The company is currently moving into the pilot phase for its biorefinery process, using partner infrastructure rather than building from scratch, and in 2023 will begin to commercialise the first products. “It’s exciting, but slightly crazy, to do both at the same time, but we want to have cash flowing into the company as early as we can,” said Granström.

After closing a €2 million seed round in 2020, followed by a €800,000 investment from Business Finland, the government innovation body, Origin by Ocean is currently raising funds again, with a target of €2.5 million. It also expects to get a further loan from the government to fund pilot work.

Supplying the chemical industry means there is no need to worry about public perception. “We extract the ingredients, they are purified and meet well-established technical specifications, so our customers know what they are getting from us,” Granström said.

This industry discipline is something that the EU should bear in mind with its strategy. “There are benefits [in having a dedicated strategy], but you should not create confusion around the value chain, the supply chain and market legislation for what you are producing,” said Granström. “They are trying to turn seaweed into something very special, and making the story way too complicated.”

She is also critical of the EU’s emphasis on the role seaweed can play capturing and storing carbon, which she feels is not always backed up with hard evidence. “It’s such a waste of biomass if you only look at the carbon. There is so much more that you can do with seaweed.”

For example, it can provide environmental services such as combatting eutrophication. “Nutrient removal is something that seaweed does really well, and so if you give carbon credits you should also give nutrient credits to the players who are then doing that job.”

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