With traditional biofuels under fire for driving up food prices and wreaking environmental havoc, industrialists are stepping up research into algae as a sustainable alternative - but many obstacles remain before algae oil finds its way into our cars and planes.

EU Milestones:

Dec. 2008: EU leaders agree revised directive on renewable energy, agreeing a 10% target for 'green fuels' by 2020 (EurActiv 5/12/08).5 Dec. 2010: Deadline for all EU countries to comply with new Renewables Directive. Greenhouse gas savings from biofuels to reach minimum 35%.2012: EU countries to submit first report on national measures taken to respect the sustainability criteria for biofuels.By Dec. 2014: Commission to review greenhouse gas emission saving thresholds for biofuels, taking available technologies into account.2017: Greenhouse gas savings from biofuels to reach minimum 50%.2018: Greenhouse gas savings from biofuels to reach minimum 60%.2018: Commission to present renewable energy roadmap for post-2020 period.2020: Transport sector mandated to source 10% of its energy needs from renewable energy, including sustainable biofuels and others.

In December 2008, the EU struck a deal to satisfy 10% of its transport fuel needs from renewable sources, including biofuels, hydrogen and green electricity, as part of negotiations on its energy and climate package (EurActiv 05/12/08).

"The mandatory 10% target for transport to be achieved by all member states should […] be defined as that share of final energy consumed in transport which is to be achieved from renewable sources as a whole, and not from biofuels alone," says the final text of the EU Renewables Directive.

The new directive obliges the bloc to ensure that biofuels offer at least 35% carbon emission savings compared to fossil fuels. The figure rises to 50% as of 2017 and 60% as of 2018.

The conditionality is linked to increasing concerns about the sustainability of the so-called first-generation biofuels currently available - such as biodiesel and bioethanol - which are made from agricultural crops (including corn, sugar beet, palm oil and rapeseed).

The directive also states that the EU should take steps to promote "the development of second and third-generation biofuels in the Community and worldwide, and to strengthen agricultural research and knowledge creation in those areas".