The unfolding seaweed revolution

In the last five decades the global algae industry has grown dramatically. Algae production has huge social and environmental potential – but only if sustainably sourced.

Worldwide interest in algae is booming. Algae is increasingly seen as the answer to haunting global problems – from food insecurity to climate change. Long considered a low-value product, interest in algae has blossomed as the potential for higher-value derivatives has emerged. Seaweed production offers a fantastic opportunity to develop algae-based products to those regions that can sustainably produce it, supporting jobs and livelihoods throughout the value chain. Algae cultivation, in particular, also comes with positive environmental outcomes.

Algae encompasses a wide variety of species ranging from complex macro-algae structures to microscopic micro-algae. While it still is a relatively small economic sector, global demand for macroalgae has grown exponentially due to their multiple potential uses across different industries. Direct human and animal consumption currently dominates, but applications like bioplastics and biofuels are expected to grow rapidly in coming decades. Lead by China, Asia is both the main producer and consumer – although other large buyers are consolidating in the EU and US.

Ergo has looked closely at the algae sector in Latin America. Chile dominates production, followed by Peru, due to the long coastlines, good climatic conditions, and abundant nutrients in the Pacific seawater, which combine to give comparative advantage for a variety of species. However, while most of the global production is currently cultivated, Latin America still relies on harvesting and direct collection from the beach, a technique that is largely unsustainable. A shift to cultivation is key to increase industry resilience, help recover natural seaweed beds, capture price premiums from certified sources and deliver sustainable livelihoods. For more, see our case study.