Editor's Note: With this post we welcome Stephanie Freid to the writing team. Stephanie is based in Israel, and will be writing about desertification issues and technology. Keep an eye out for Stephanie's subsequent posts!

Humans have a knack for putting common elements to good use. Take algae. More than 150 species go into commercial food prep – ice cream thickening agents or livestock feed, for example – or in disease warding pharmaceutical drugs.

Unaltered, algae are living organisms that capture energy through photosynthesis and convert inorganic substances into simple sugars. Israeli researchers are applying that knowledge to fuel the future.

Algatech, founded in 1999, is turning a collective focus towards developing algae derived bio-fuel. The company’s 25-strong production facility collaborates with U.S. start-up GreenFuel Technologies Corporation in working towards a common goal: developing cost effective, energy efficient fuel made from micro-algae feeding off of carbon dioxide emissions.

“The bio-fuel concept is old,” said Algatech R&D head Dr. Amir Drory. “It started in the 60’s and 70’s when people started to look for alternatives. We’ve only been dealing with it for a few years.”

Headquartered in Cambridge, Massachusetts, GreenFuel is developing algae bio-reactor systems to convert carbon dioxide or smokestack emissions into clean, renewable bio-fuels.

Algatech and GreenFuel have been talking business for years because both sides recognize the complimentary fit: one side provides the algae and the other provides technology for turning it into fuel.

“From a technology point-of-view, there is no question that using algae to produce ethanol from CO2 is innovative,” a silent investor explained. “These guys have been doing work for more than a couple of years and already have investors that believe in the product.”

The product, in this case, is micro or single cell algae cultivated by through a screening process. Made up of lipids, starches and carbs – nature’s basic building blocks or the stuff we eat – algae goes from starch or sugar form through fermentation to alcohol and protein where it can be eaten or burned.

The major tasks facing Algatech and GreenFuel are culturing the algae, optimizing the process and keeping costs low.

“We’ll make it cost effective,” GreenFuel CEO Cary Bullock reported. “In the past you couldn’t grow the algae fast enough to justify the cost of building the plant. But with growing improvements and weighing the costs of producing a refined fuel derived from putting a refinery next to a major carbon source, the benefit is dramatic. You knock out the costs of producing, importing, refining and shipping and you’re simultaneously reducing the amount of CO2 in the atmosphere.”

Bullock says there is a fair amount of power plant land in Australia, the U.S. and Western Europe ideal for bio-diesel and ethanol production and notes that ethanol blended gasoline necessitates little to no engine modification. With government incentives like tax credit subsidies, accelerated depreciation and credits offered to blenders on a per-gallon of ethanol blended fuel basis, it would seem the CO2 derived algae bio-fuel is already seamless.

“There’s a lot of work to be done,” Bullock cautions albeit optimistically. “It seems too easy because you intuit the process at a high level. But on a basic level, it’s very hard. You’re working with micro-organisms that not a huge body of research is available on.”

Which is part of the reason GreenFuel and Algatech teamed up. Israel has been at the forefront of algae research for years, cultivating, developing and studying different strains of micro-algae under ideal climate conditions. Algae can be grown in a wide range of regions, including temperate zones such as Europe, but a Negev Desert setting is ideal.

Scientists on both fronts are eager to begin active collaboration expected to extend two to three years and both Drory and Bullock estimate they’ll have product to market within the coming decade. Governments and industrialists in the U.S. and Europe are already watching.

Will shortage be a future factor with which to contend?

“There are about 30,000 species of micro-algae – mostly unexplored,” Drory summarizes. “The reserve of micro-algae is huge…it’s the same as fungi decades ago before they started looking into antibiotics. We won’t face a shortage. We just have to invest money and effort to find very interesting micro-algae to work with.”