Problems associated with algae biodiesel. One of the biggest problem with alga biodiesel production is the high cost for implementing the technology. Another limitation is identifying a reliable source of carbon dioxide. Weather changes, exposure to biological agents in the atmosphere and solar irradiation have the potential to significantly disrupt production. It requires phosphorous as fertilizer which is becoming scarce. It needs a considerable amount of land and water

Feasibility A number of companies in the U.S are developing algae refineries they include Solazyme, Sapphire energy, and OPXBIO. The funding is $144 million. Aviation trials with several airlines including United States and Quantas have been successfully completed using fuel blends of up to 40 percent algae-derived fuel.

Alternative approach They are various alternative approach to the formation of biodiesel. They include Elephant grass Soybean Corn Note that for every advantage there is always a disadvantage.

conclusion In summary, algae-based bio-fuel is a promising energy source that is in the latter stages of development. A number of issues related to the ultimate cost of the product need to be resolved, but there is a good deal of research money going into this as production is beginning to scale up. Land issues can be addressed using marginal land. Water can be recycled in reactors. Fertilizer issues could be addressed using waste streams, thereby recycling the critical nutrients. Time will tell, though I believe this is an important technology to watch.

Reference   Ciampia, Frank j. Algae biodiesel pros and cons.(A response to "could algae biodiesel be the new corn"). Cambridge: The green office, 2010. Siegal, RP. Algae- based Biofuel: pros and cons. Bellingham, WA, 12 April 2012.