Can green gunge save the planet? FUEL: Scientists look into the environmentally attractive potential of algae.

SLIMY, green and upsetting to all those who want a nice swim, the algae on ponds, lakes and still water has never been seen as one of nature's most pleasant gifts.

Yet now, this scummy substance is being considered as an alternative fuel source and soon could be powering our cars, planes and perhaps even our homes.

Rising oil prices and an urgent global need for cleaner energy have flung algae into the centre of a hot biofuels debate. Scientists, entrepreneurs and even government ministers are discussing its viability, as we try to cut back our worldwide dependency on fossil fuels.

Of course you might think: 'We've heard that one before'. The same glowing promises were made about the so-called "first-generation" biofuels, based on food crops like sugarcane and corn. But those predictions quickly turned sour after the biofuels were blamed for higher food prices worldwide.

But algae is different. At its most basic level, algae only needs water, sunlight, carbon dioxide and basic nutrients to grow. Unlike the first-generation biofuels, algae can be cultivated on non-arable land using seawater or wastewater. They can double their size in photosynthesis in a day, and are easily grown in controlled conditions.

This means it potentially has all the strengths of biofuels extracted from conventional crops without contributing to the global food crisis. A 'GREENER' OIL Algaculture - which focuses on microalgae, such as phytoplankton, rather than macroalgae, like seaweed - is a steadily growing business.

According to the Government-established Carbon Trust, algae is able to deliver six to 10 times more energy per hectare than traditional biofuels, whilst reducing carbon emissions by up to 80 per cent relative to fossil fuels.

Initial forecasts suggest that algae-based biofuel could replace more than 70 billion litres of fossil fuels used worldwide each year by 2030, consequently stemming 160 million tonnes of CO2 emissions.

The promise of 'green oil' has consequently has stirred up a great deal of interest.

In July, US oil giant ExxonMobil vowed to invest up to $600 million in biotechnology research devoted to turning algae into fuel.

Other oil companies such as Shell, BP and Chevron have also recently invested in algae. Boeing, Virgin Atlantic, Continental Airlines and Air New Zealand - each of them members of the Algal Biomass Organisation - have done the same. Here in the UK, the Carbon Trust has begun work on a pounds 30 million project to make algae biofuels a commercial reality by 2020.

With transport accounting for one-quarter of the UK's carbon emissions, algae could help the government meet its target to reduce overall emissions by 80 per cent by 2050, says Dr Mark Williamson, innovations director at the Carbon Trust.

"Algae could provide a significant part of the answer and represents a multi-billion pound opportunity," he said.

But algae production will have to be sustainable on a large-scale for it to work, says transport minister Andrew Adonis, referring to the recent food-crops-as-fuel debacle.

"We are clear that biofuels will only have a role to play in this if they are sustainably produced," he said.

GREEN GOLD? NOT JUST YET The exact science of cultivating algae into transport fuel, as well as its true cost, is still up in the air.

What is definite is that, for now, it can't be grown everywhere: hot, sunny climes produce far more algae than overcast and rainy ones, warns the Carbon Trust, although companies are developing strains that can be grown in colder climates.

We also need to find a cost-effective way to produce algae biofuels on a scale that can meet our transport needs.

Bearing in mind, that it was the relatively high cost of turning algae into fuel, coupled with the low cost of petroleum, which caused the US Department of Energy to abandon its 20-year-long algal biofuel research in 1996.

An issue that some worry will still create problems today.

Scientists and companies all over the world are trying their hand at the fastest, cheapest and best ways to create algae biofuels.

Israel's Seambiotic is using smokestack flue gas from a coal-burning power plant to grow marine microalgae (they eat the carbon dioxide in the gas).

California-based Solazyme is feeding sugar to algae grown in large tanks. And NASA is using sewage to grow the green goo.

Algae isn't perfect: it still creates pollution when burned, albeit less than fossil fuels. But perhaps its saving grace is that it can also cultivate food, fertiliser, dyes, bioplastics and chemical feedstock.

And, as it eats carbon dioxide and exhales oxygen to survive, algae has also been heralded as a potential 'breath mint' for the air pollution that currently racks our skies.