One of the more promising sources of biofuels in recent years has been algae. While there are a number of small scale tests along with some larger scale commercialization projects, the UK's Carbon Trust wants to accelerate the process. The Trust has launched an Algae Biodiesel Challenge with goal of making algae-sourced liquid fuels commercially viable by 2020. The first phase of the £30 million project will focus on research and development including finding the best strains of algae, yield improvement and designing better large scale bioreactors.
The applicants that will get money in the first phase will be selected by August of next year. The second phase will be based on constructing a large scale commercial production facility. Funding for the program is coming from the UK Department for Transport and the Carbon Trust itself which is publicly funded.

[Sources: Earth2Tech, Carbon Trust]

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