A report by a Western Australian think tank has highlighted the massive potential of algae farming as a source for biofuel, billions of dollars and thousands of jobs.

A report by Future Directions International has suggested WA’s coast is ideally suited to fostering a massive biofuel industry from algae, due to its abundant sunshine, demand for fuel from the resource industry and willingness of farmers to innovate and try new crops.  

At Karratha one company has already kick-started the movement, the US-owned Aurora Algae has recently announced plans to build a $300 million facility next years to produce omega oils, aqua-feed and biofuels. Marketing manager Paul Brunato says a $10 million pilot study has proven the viability of production based on Nannochloropsis, an algae which the company breeds and imports to Australia under strict quarantine conditions.

"What we've learned is we can grow algae at tremendous rates here in the Pilbara," he said, "the species of algae we're working with ... is able to double in volume on a daily basis."

Not everyone is so optimistic. Professor Michael Borowitzka has studied about 400 algal strains in the last 15 years, and says the production of biofuels is not yet cost-effective enough. He says there’s no denying the great demand for renewable fuel sources, but for efficient production current methods would have to improve by a factor of 10 or more.