Funding has been secured for a demonstration-scale fuel plant in South Australia, which converts marine microalgae into green crude.

Organic-waste-to-energy experts Muradel develop a pilot plant to test its Green2Black technology in 2011, and now the Australian Renewable Energy Agency (ARENA) has stepped in to take it to the next level.

Muradel has isolated and evaluated a particular microalgae species, which is highly-productive, tolerant to a wide salinity range, and can be successfully propagated in outdoor, low-cost 'raceway ponds' (so-called because they resemble a horse-racing track).

The same company has also developed an innovative low-energy algae harvesting and concentrating system that will be further improved and integrated with the algae fuel production system.

The $4.4 million grant for the $10.7 million project means Muradel can combine the two technologies at a much greater scale.

There are even plans to scale-up the demonstration plant to a commercial facility, that could produce 500,000 barrels of green crude each year.

A statement from ARENA says: “If successful, this project will deliver a viable solution that can be applied at commercial scale, and one that will offer a source of renewable fuel that meets the challenge of reducing carbon emissions while being energy efficient and economically attractive to consumers.”

ARENA CFO Ian Kay said while Australia’s domestic liquid refinery capacity is in decline, it is more important than ever to find cost-effective alternative transport fuels.

“Muradel has successfully taken this technology through to demonstration scale and is poised to offer it commercially with the ambition of making it available as a renewable alternative at the pump,” Mr Kay said.

“While there are great opportunities on the biofuels horizon, there are also significant technical and commercial challenges to overcome.”