Algae Oil Market Size, Share, Growth & Industry Analysis, By Grade (Food, Feed, Fuel), By Application (Biofuels, Food & Beverages, Animal Feed, Dietary Supplements, Personal Care, Others), and Regional Analysis, 2024-2031

Algae Oil Market Size

The Global Algae Oil Market size was valued at USD 2340.0 million in 2023 and is projected to grow from USD 2398.3 million in 2024 to USD 3048.8 million by 2031, exhibiting a CAGR of 3.49% during the forecast period. The expansion of the market is significantly influenced by the growing consumer preference for sustainable and eco-friendly products.

Algae oil serves as a renewable and ethical alternative to animal-derived oils, appealing to environmentally conscious buyers. The efficient cultivation process, which requires minimal natural resources, enhances its sustainability profile. The increased focus on reducing the environmental impact of industrial operations has prompted various sectors to adopt algae oil, propelling market growth.

In the scope of work, the report includes products offered by companies such as DIC Corporation, Exxon Mobil Corporation, dsm-firmenich, Cargill, Incorporated, Seaweed Energy Solutions AS, Cellana Inc., Chevron Corporation, Diversified Energy Corporation, TerraVia Holdings, Inc, Algae Floating Systems Inc., and others.

The growing nutraceutical industry is contributing significantly to the growth of the algae oil market, fueled by its rich DHA and EPA, which promotes brain, cardiovascular, and overall health. Consumers are increasingly opting for algae oil as a sustainable, plant-based alternative to fish oil.

Its ability to meet vegetarian and vegan dietary needs has positioned it as a preferred choice among health-conscious individuals. Rising awareness of preventive healthcare and the focus on improving nutrition are increasing the demand for algae oil, strengthening its position in the global dietary supplements market.

Algae oil, extracted from aquatic algae, is a rich source of essential omega-3 fatty acids such as DHA (docosahexaenoic acid) and EPA (eicosapentaenoic acid), positioning it as a sustainable alternative to fish oil in dietary supplements. Algae oil is also used as a biofuel, cooking oil, and a cosmetic ingredient due to its nutritional and environmental benefits. Its production involves cultivating algae in controlled environments, followed by extraction and refinement.

Analyst’s Review

Companies in the algae oil market are leveraging advanced strategies to aid growth and strengthen their competitive edge. Key initiatives include leveraging technologies such as photobioreactors, closed-loop systems, and precision breeding. These innovations enhance algae yields, improve resource efficiency, and enable the development of customized strains with superior lipid profiles to cater to diverse industry demands.

• In July 2024, NTT Corporation and Euglena Co., Ltd. achieved a groundbreaking milestone as the first in the world to successfully breed algae through mutagenesis using neutron beam irradiation. This breakthrough enhances algae's CO2 absorption capabilities and enables the development of algae strains tailored for diverse applications, addressing critical climate change challenges.

Investments in enhanced oil extraction methods and the development of production facilities are prioritized to improve purity, enhance efficiency, and reduce production costs.

• In February 2023, Neste revealed plans to build an algae pilot production facility in Spain to enhance its global raw material supply. This pilot aims to advance algae cultivation and processing techniques, supporting further research and the commercialization of algae and associated technologies.

This has strengthened the scalability and commercial viability of algae oil across sectors such as nutraceuticals, biofuels, and cosmetics. Moreover, partnerships with research institutions and technology providers are fostering continuous advancements in cultivation and extraction processes. These strategies are fueling the sustained expansion of the market and meeting evolving consumer and industrial needs.

Algae Oil Market Growth Factors

The growth of the market is fueled by expanding applications in the food sector, particularly in cooking oils and fortified food products. Algae oil’s neutral flavor, high smoke point, and significant nutritional content make it suitable for a wide range of culinary uses. Its inclusion in infant formulas, dairy alternatives, and functional foods has increased its appeal.

Rising demand for healthier food options and innovations in food product development are further fostering market expansion, particularly in health-focused segments.

The expansion of the biofuel industry is contributing to the growth of the algae oil market, leveraging its renewable nature and high lipid content for biodiesel production. Algae oil is recognized for its ability to reduce greenhouse gas emissions, aligning with global initiatives to combat climate change. Its scalability and efficiency have attracted significant investments in algae-based biofuel technologies.

• In January 2024, a new four-year EU-funded project, FUELGAE, was launched with a budget of USD 5.5 million to explore algae as a potential fuel for the aviation and maritime industries. Coordinated by the Spanish National Research Council (CSIC), the project involves a consortium of 13 partners focused on developing an innovative method for producing advanced liquid fuels.

The increasing adoption of alternative energy sources in transportation and power generation sectors further increases the demand for algae oil, highlighting its importance in achieving global sustainability goals and boosting market growth.

However, a significant factor restraining the growth of the algae oil market is the high cost of production, fueled by the expenses associated with algae cultivation, harvesting, and oil extraction. The need for specialized infrastructure and technologies, such as photobioreactors, further increases overall costs and hampers scalability.

To address this challenge, companies are investing in research and development to optimize algae cultivation processes, improve yields, and reduce energy consumption. Additionally, advancements in automation, integrated systems, and more efficient extraction methods are being implemented to lower costs and make algae oil production more economically viable.

Algae Oil Industry Trends

The cosmetic and personal care industry is stimulating the growth of the algae oil market, particularly in skincare and haircare formulations. Algae oil, rich in antioxidants and essential nutrients, promotes skin hydration, repair, and protection against oxidative damage.

Its incorporation into premium products, such as anti-aging creams and serums, has boosted demand among consumers seeking natural and sustainable beauty solutions. The growing preference for organic and clean-label cosmetics, combined with industry innovation, is enhancing the role of algae oil in the global beauty market.

The global shift toward veganism and vegetarianism is further influencing the algae oil market, as it serves as a sustainable alternative to fish oil.

• According to the 2023 survey conducted by Sentient, approximately 4% of Americans follow a vegan diet, equating to an estimated 13.2 million vegans in the country. A YouGov survey indicates the vegan population in the UK has remained steady at 2-3% from 2019 to 2024. In Italy, around 2.4% of the population follows a vegan diet, while in Germany, about 3% of individuals aged 18 to 64 identify as vegans.

Algae oil addresses dietary restrictions while providing essential nutrients such as DHA and EPA, appealing to the growing population of health-conscious consumers. Its versatility across dietary supplements, fortified foods, and personal care products further enhances its appeal. The increasing focus on reducing dependence on animal-derived products and adopting plant-based diets is supporting market expansion.

Segmentation Analysis

The global market has been segmented based on grade, application, and geography.

By Grade

Based on grade, the market has been segmented into food, feed, and fuel. The food segment led the algae oil market in 2023, reaching a valuation of USD 814.9 million. Algae oil, rich in omega-3 fatty acids, offers a superior nutritional profile compared to traditional oils, making it a preferred choice for health-conscious consumers.

The increasing trend toward clean-label products in the food industry further boosts its growth, as it is considered a natural and sustainable alternative. Furthermore, its versatility in cooking, stability at high temperatures, and positive impact on heart health are fueling its use in the food sector, thus propelling segmental expansion.

By Application

Based on application, the market has been classified into biofuels, food & beverages, animal feed, dietary supplements, personal care, and others. The biofuels segment is set to grow at a CAGR of 3.99% through the forecast period. Algae oil, known for its high lipid content and biodiesel production potential, is emerging as a viable alternative to traditional fossil fuels.

The increasing transition to decarbonization and the reduction of greenhouse gas emissions is prompting governments and industries to invest in algae-based biofuels as part of their sustainability strategies.

Additionally, algae oil's ability to produce high-quality biofuels that meet regulatory standards is contributing to its dominance. The ongoing advancements in algae cultivation and oil extraction technologies are further enhancing the commercial viability of algae-based biofuels, making it a preferred choice for the energy sector.

Algae Oil Market Regional Analysis

Based on region, the global market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and Latin America.

The Asia Pacific algae oil market accounted for a notable share of around 28.97% in 2023, with a valuation of USD 677.8 million. Asia Pacific’s booming beauty and personal care market is leading to increased demand for algae oil.

Countries such as South Korea and Japan, known for their advanced skincare products, are leveraging algae oil for its antioxidant and moisturizing properties. The preference for natural and sustainable ingredients in cosmetics has increased its appeal, resulting in its widespread adoption across the region's premium skincare and haircare markets.

The expanding infant nutrition sector in Asia Pacific, particularly in countries with high birth rates like India and Indonesia, is contributing to regional market growth. Manufacturers are incorporating DHA-rich algae oil into infant formulas to meet the growing demand for enhanced nutritional products.

• In October 2024, U.S. companies Spotlight Foods and Algae Cooking Club developed an innovative algae cooking oil through fermentation. This seed-free oil, derived from microalgae, offers a sustainable alternative to conventional seed oils, marking a potential shift in the cooking oil industry.

This trend reflects increasing parental awareness of early-stage development and the health benefits of omega-3 fatty acids, aiding regional market expansion.

The Europe algae oil market is projected to grow at a CAGR of 3.79% over the forecast period. This growth is largely attributed to increasing government support for sustainable and renewable resources.

Both the U.S. and Canadian governments have introduced initiatives aimed at promoting green energy solutions and reducing carbon footprints. Algae oil, particularly for biofuels, is viewed as a critical component of these sustainability efforts. Policies incentivizing biofuel production and research in algae-based technologies are further propelling regional market growth, with investments expected in algae cultivation and oil extraction technologies.

Ongoing investments in research and development (R&D) by both established companies and startups in North America are fostering innovation in algae oil production and applications. These investments focus on improving algae strains, optimizing cultivation methods, and enhancing extraction technologies. R&D efforts are expanding the applications of algae oil, ranging from biofuels to nutraceuticals, positioning it as a versatile and commercially viable resource.

• In December 2023, Ginkgo Bioworks, in collaboration with the Pacific Northwest National Laboratory, Colorado School of Mines, and Global Algae Innovations, secured funding from the U.S. Department of Energy's (DOE) Bioenergy Technologies Office (BETO). The project aims to develop a novel approach to algal crop protection, inspired by integrated pest management strategies traditionally used for terrestrial crops.

Competitive Landscape

The global algae oil market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions.

Strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, could create new opportunities for market growth.

List of Key Companies in Algae Oil Market

• DIC Corporation
• Exxon Mobil Corporation
• dsm-firmenich
• Cargill, Incorporated
• Seaweed Energy Solutions AS
• Cellana Inc.,
• Chevron Corporation
• Diversified Energy Corporation
• TerraVia Holdings, Inc,
• Algae Floating Systems Inc.

Key Industry Developments

• October 2024 (Launch): DSM-Firmenich launched Life’sDHA B54-0100, the company’s most potent natural algal docosahexaenoic acid (DHA) oil. This innovative product addresses challenges such as pill fatigue and convenience, expanding DHA’s accessibility to a broader consumer base worldwide.
• December 2023 (Launch): DIC Corporation developed KS-519, the world’s first algae oil-based product in its DAILUBE series of sulfurized extreme pressure (EP) additives. This innovative offering reduces CO₂ emissions, promotes sustainability, and outperforms traditional vegetable oil-based alternatives. It is anticipated to see high demand in the electric vehicle (EV) industry due to its enhanced performance.

The global algae oil market has been segmented as:

By Grade

• Food
• Feed
• Fuel

By Application

• Biofuels
• Food & Beverages
• Animal Feed
• Dietary Supplements
• Personal Care
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America