A team of researchers at Irish biofuels company AER and the National University of Ireland in Galway developed the process which converts the waterborne vegetation into a fuel.
Interest in algae-to-biofuel has increased following claims that the first generation feedstocks, which were based on food grains such as wheat and oilseed, had pushed up global food prices.
Algae, which is a so-called second generation feedstock, requires water to grow, but this need not consume resources as it is not drinking-quality water it thrives in.
AER chief executive John Travers said next-generation feedstock would avoid raising food prices.
He said: “There is still some additional development to be done but I guess the most important part of the puzzle has been solved in that we’ve proven the ability to convert it.”
The EU has set targets of 5.75% of all road transport fuel coming from biofuels.
However, recent food costs have seen proposals for a 10% target by 2020 to be modified to require 40% of biofuels to come from second-generation feedstock.
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