Tasmanian researchers believe they are one step closer to creating all the benefits of a fish-derived dietary supplement, without the fish.

Dr Susan Blackburn is involved in the National Algae Culture Collection and said with growing concerns about the sustainability of fish stocks and high levels of pollutants in some Omega-3 supplements, scientists were turning their attention to microalgae.

The microalgae targeted produces the omega-3 when processed in a laboratory as it does when processed by the fish.

More than $200 million worth of omega-3 supplements are sold in Australia annually, and that is growing at about 10 per cent a year.

Dr Blackburn said fish oil was the most popular source for omega-3, but the supply and pollutant concerns were driving the search for new sources.

"They're really important in our diet, in our human diet but in fact one-in-15 Australians do not get the recommended dietary intake of omega-3 oils," she said.

So scientists have turned their attention to what fish eat to get their source of the oil.

"The fish don't make the fish oil themselves, the fish eat the microalgae themselves, so we can get the fish oil from the microalgae, so bypass the source," Dr Blackburn said.

Most microalgae need sunlight to grow, but lead scientist Dr Kim Lee Chang said he had been feeding one type crude glycerol, which was industrial waste from a biodiesel plant.

He said he was pleased with the early results.

"It's just like making beer, beer fermentation. So what we do is we put the carbon source in, in this case crude glycerol, it's the sugar," he said.

"It's like you put the sugar in the beer fermentation."

Dr Chang said the brew he ended up with served two purposes.

"One would be the biofuels and the other would be the omega-3 oils," he said.

Dr Chang said microalgae's ability to double their biomass daily gave it the potential as a renewable resource for both food and fuel.

Scientists hope both products could be on Australian shelves in five to 10 years.