Biofuels Digest released its 50 Hottest Biofuels Companies for this year and Solazyme is number 1, now well-established as a leader in the use of algae to produce biofuels. Read our  profile of Solazyme from March 22, 2009 here.

Solazyme, which until now has positioned itself as a producer of biofuels from algae, has just announced a shift in focus to produce food oils. The company believes it can have products on the market in 2010.  According to chief technology officer Harrison Dillon, the decision to diversify into food products came about by almost by accident when scientists at the company discovered their algae could excrete oils that were similar to olive oil. Olive oil has a market price about 25 times higher than fuel; I’ll bet that also played a role in the decision.

Algae have been touted as one of the Next Big Things in biofuels. The high oil content of some algal strains provide a potentially inexpensive source of oil that can be processed into biodiesel, and pathway engineering in algae could lead to the production of other fuel-like compounds as well. But it is the minimal growth requirements for algae that provide the real attraction of algae as a source of biofuels. Algae can grow using carbon dioxide from the air as a carbon source and sunlight as its energy source. Thus, cultivating algae could potentially cost next to nothing, and actually consume carbon dioxide. So then, why is Solazyme trying to produce biofuels by growing algae on sugar in the dark? Good question! Solazyme brushes this question aside with the glib, inconclusive response of “it’s more efficient this way.” OK, we’ll see.

Solazyme is not publicity shy. The company cranks out press releases at a rate of about one per month. The web site lists many different TV shows and magazine articles in which the company has been mentioned (favorably, of course). Executives actually attended the Sundance Film Festival in 2008 with a short film on algae-derived biodeisel that you can view on the company web site. I don’t know if all that PR advanced the technology platform very far, but it probably helped Solazyme raise money. The company has raised $70 million since inception, including $45 million is a round closed in August 2008, right before the markets tanked and financing dried up. This was very fortuitous timing for the company. Solazyme has used those funds to expand its R & D team and hire scientists from companies that include Genencor and Novozymes.

What about the technology? The Solazyme platform derives from technology to manipulate algal pathways, and the company claims that it will produce a range of useful compounds, including fuels, nutraceuticals and specialty chemicals. In June 2008 Solazyme announced that it had made the first algal-based renewable diesel to pass American Society for Testing and Materials D-975 specifications. Chevron has signed on to collaborate with Solazyme on developing and commercializing this product. Patent applications describe the production of chemicals that range from hydrogen to biodiesel to cholesterol reducers and compounds that lubricate your joints and improve the appearance of your skin. Solazyme has painted an incredible picture of its future. Economics are not yet proven, however, so we will be monitoring the progress closely. If the company delivers on just some of its promise, it will be quite successful.