Petrol, diesel and kerosene are the ultimate high-density liquid fuels. Finding a green alternative that is capable of getting an airbus across the Atlantic, or achieving "50 miles to the gallon" in your car, is no easy task. Biofuels are one of the best solutions to date but a large-scale switch to biofuels would require billions of acres of land to grow the relevant grasses, grains and trees, putting pressure on global food production, or eating into pristine tropical rainforest.

Algal biofuels have been touted as an attractive alternative because they have the potential to produce large yields per acre compared to conventional biofuel crops. As yet algal biofuels only exist in concept, but many research groups are investigating a viable production process.

Current prototype methods of algal biofuel production consume large amounts of energy: lots of pumping and mixing is required to keep the algae afloat. Add to that the methane and nitrogen oxides that the process might produce and suddenly it isn't clear that algal biofuels will be such a green alternative after all.

To investigate further, Edward Frank from the Argonne National Laboratory, US, and colleagues have carried out a life-cycle analysis of the energy use and emissions for algal biofuels, using the GREET (Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation) model.

The scientists considered the energy input required, including the energy to keep the algae suspended in the growth pond. They also assessed the methane produced during anaerobic digestion and the nitrous oxides emitted if algal residues were used as crop fertilizers. Taking all of these issues into account, they showed that algal biofuels nearly halved greenhouse-gas emissions (from 101,000 g of CO2 equivalent per million BTU for low-sulphur diesel to 55,400 g for algal biodiesel), making them attractive compared to liquid fossil fuels.

However, these figures depend upon some clever recycling during the production process. "We assume that nutrients can be recovered after oil extraction and that biogas can be produced from the spent biomass," says Frank.

The calculations also show how important it is to consider by-products and waste gases from the process. Methane accounts for 23% of the greenhouse-gas emissions for algal bio-diesel, assuming 2% of the digester methane is leaked. This shows that preventing methane leakage could really improve the fuel's green credentials.

Meanwhile, using the spent biomass to produce fertilizer carries penalties too. Frank and his colleagues showed that, if the digester solids were used to make organic fertilizer, the resulting nitrous oxide emissions from soil processes accounted for 14% of the greenhouse-gas emissions for algal biodiesel.

Despite these challenges, the research shows that algal biofuels could be real contenders for avoiding greenhouse-gas emissions from liquid fossil fuels. "If produced sustainably at scale, they could help address this niche [transportation] of our energy consumption," says Frank.

The scientists reported their work in Environmental Research Letters.