Chinese firm behind ambitious plan to breed microalgae in greenhouse with the potential to absorb carbon emissions

The garish gunk coursing through a greenhouse filled with transparent pipes appears to belong on the set of a particularly slimy episode of Star Trek.

Multiplying rapidly as it flows through tubes, stacked 14 high in four long rows, the organism thickens and darkens like the bioweapon of a deranged scientist.

But this is not a science fiction horror story, it is one of humankind's most ambitious attempts to recruit algae in the fight against climate change.

Developed by a groundbreaking Chinese firm, ENN, the greenhouse is a bioreactor that breeds microalgae, one of the fastest growing organisms on the planet, with carbon captured from gasified coal.

China is the world's biggest emitter of greenhouse gases, largely because it relies on coal for 70 per cent of its power. Almost none of the carbon dioxide is captured, partly because there is no profitable way of using it.

Algae may be the answer. The organism can absorb carbon far more quickly than trees, a quality that has long attracted international scientists seeking a natural method of capturing the most dominant greenhouse gas.

At ENN's research campus in Langfang, an hour's drive from Beijing, scientists are testing microalgae to clean up the back-end of a uniquely integrated process to extract and use coal more efficiently and cleanly than is possible today.

Coal is first gasified in a simulated underground environment. The carbon dioxide is extracted with the help of solar and wind power, then "fed" to algae, which can be then used to make biofuel, fertiliser or animal feed.

Foreign experts are enthusiastic. "Algae biofuels and sequestration are being tried in a bunch of places, but never with such an innovative energy mix," said Deborah Seligsohn, of the World Resources Institute, who visited ENN recently with a group of international energy executives. "It is really interesting and ambitious."

Researchers at the algae greenhouse plan to scale up the trial to a 100 hectare (247 acre) site over the next three years. If it proves commercially feasible, coal plants around the world could one day be flanked by carbon-cleaning algae greenhouses or ponds.

"Algae's promise is that its population can double every few hours. It makes far more efficient use of sunlight than plants," said Zhu Zhenqi, a senior advisor on the project. "The biology has been proven in the lab. The challenge now is an engineering one: We need to increase production and reduce cost. If we can solve this challenge, we can deal with carbon."

The algae must be harvested every day. Extracting the oily components and removing the water is expensive and energy intensive.

ENN is experimenting with different algae to find a hybrid that has an ideal balance of oil content and growth speed. It is testing cultivation techniques using varying temperatures and acidity levels.

Algae tests are also being carried out at the University of Ohio. In Japan, algae is farmed at sea where it absorbs carbon from the air. Elsewhere carbon is sprayed or bubbled into algae ponds. But ENN is focusing on a direct approach.

"Here we can control it, like in a reactor," said Gu Junjie, a senior advisor. "Theoretically we can absorb 100% of carbon dioxide emissions through a mix of microalgae and chemical fixing with hydrogen."

This might work on a large scale in the northern deserts of Inner Mongolia, where land is cheap, plentiful and in need of fertiliser. But elsewhere, application may be limited because of the large areas of land or water needed for cultivation.

"Algae is not likely to be the main solution for the carbon problem because of the amount of CO2 that needs to be consumed," said Ming Sung, Chief Representative for Asia Pacific of Clean Air Task Force. But, he said: "Algae is part of the solution and is closer to what nature intends. Being one of the simplest forms of life, all it takes is light and CO2 in salt water,"

The advanced algae, solar and coal gasification technology is the latest stage in the rise of ENN, which has been spectacular even by modern Chinese standards. Founded in 1989 as a small taxi company, it has branched successfully into the natural gas industry and now into the field of renewable energy. The private company now employs about 20,000 people, and owns a golf course and hotel near its headquarters in Hebei province, where a new research campus is under construction.

In the short term, ENN's advanced underground coal gasification technology is likely to prove more significant than its algae work. This technique enables extraction of fuel from small, difficult-to-access coal seams, and could double the world's current coal reserves. It also avoids the release of the pollutants sulphur dioxide and nitrogen dioxide.

The company is also one of only a small handful in the world capable of mass producing thin-film solar panels, which can be manufactured with less water and energy than conventional photovoltaic materials. Late last year, the World Bank's International Financing Corporation announced a US$136m loan for ENN's solar business.

ENN executives have talked to the US department of energy about joint research , a sign that the transfer of low-carbon technologies is no longer a one-way street from west to east.

The development of the algae technology trails the others, but Zhu says the results from the 10,000 litre algae greenhouse have been sufficiently encouraging to move ahead.

For the 100 hectare test facility, ENN is looking at sites near the company's 600,000 tonne-a-year coal mine in Ordos, Inner Mongolia, where the cold winters will require a heated greenhouse, and a location on Hainan Island, where the hot weather would allow the algae to be grown more cheaply in open ponds, but further away from China's main coal deposits.

With China building the equivalent of more than one new 500MW coal-fired plant every week and likely to be dependent on coal for at least two decades, the further studies planned by ENN could be crucial.

Recognising the continued role of the fossil fuel in China, the European Commission proposed a plan this week to co-finance a demonstration coal plant that aims to have near zero emissions through the use of carbon capture and storage technology.

If members states and the European parliament agree on the €50m plan, the facility would be operational by 2020.

• This article was amended on 1 July 2009. The original said that carbon was the most abundant greenhouse gas. That volume status is held by water vapour.