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The productivityof these photosynthetic microorganisms in converting carbon dioxide into carbon-rich lipids, only astep or two away from biodiesel, greatly exceeds that of agricultural oleaginous crops, without competingfor arable land. Worldwide, research and demonstration programs are being carried out to develop thetechnology needed to expand algal lipid production from a craft to a major industrial process. Althoughmicroalgae are not yet produced at large scale for bulk applications, recent advances—particularly inthe methods of systems biology, genetic engineering, and biorefining—present opportunities todevelo p this pr oc ess in a susta in abl e and econ omi ca l way wit hin t he nex t 10 to 15 years .The concept of using algae to make fuelswas already being discussed 50 years ago(1), but a concerted effort began with theoil crisis in the 1970s. Large research programsin Ja p an a nd t he U ni te d Stat es f ocu se d on d ev el -oping microalgal energy production systems. From1978 to 1996, the U.S. Department of Energy’sOffice o f Fuels Develop ment funded a program todevelop renewable transportation fuels from algae(2). The main focus of the program, known as theAquatic Species Program (ASP), was the produc-tion of biodies el from high-l ipid- content alg aegrown in po nds, using waste CO2from coal-firedpower plants. In Jap an, the government financedalargeresearchprojectentitled“Biological CO2Fixation and Utilization” from 1990 to 1999 (3).These programs yielded some successes—such aspromising lipid production strains, open produc-tion systems (raceway ponds), and principles forphotob io r ea ct or design (the use of fiber optics tobring light inside the systems)—that are still thefocus of research today, but none has proveneconomical on a large scale.There have been several critical issues thatcombined have had a large influence on stim-ulating the resurgence of algal biofuels research.The wo r l d has exp er i e nc e d rec or d cru d e oil p r i c e s,increasing energy demand, and environmentalconcerns that have pushed biofuels research ingeneral to the fore. In the narrower context of1Wageningen University, Bioprocess Engineering, Post Office Box8129, 6700 EV Wageningen, Netherlands.2Wageningen Uni-versity and Research Center, Food and Biobased Research, PostOffice Box 17, 6700 AA Wageningen, Netherlands. E-mail:rene.wijff [email protected] l (R.H.W.); maria.barbosa@wu r.nl (M.J.B.)Imax: 1800 µmol photons m-2 s-1Imax: 400 µmol photons m-2 s-1(direct sunlight)(diluting effect)Fig. 1. The principle of light dilution. The light intensity (I)strikingcloselyspacedverticalpanelsismuchlower than the intensity