Fuel made from algae is still in the experimental stages, but it looks very promising. First, algae require a lot of carbon dioxide to grow, producing carbon neutral fuel. Second, algae produce over ten times more fuel per acre than corn and other first generation biofuels. Third, “green crude” from algae does not spark the food vs fuel debate. Algae flourish in waste water and thrive in places where food cannot grow. Further, nobody but my crazy cousin Charlie eats algae in any quantity, so there is no impact on food prices.
A number of start-ups are racing to bring green crude to market. Solazyme is currently testing algae-diesel in regular diesel Mercedes C320s---no modifications needed. Other companies’ algae-based jet fuels have powered successful test flights by Continental and Japan Airlines.