Global algae oil production could grow by 80% by 2030

Global production of microalgae oil could increase significantly in the coming years amid a growing shortage of fish oil. This conclusion was presented by analysts from The Center for Feed Innovation in a new industry report.

According to the report, global algae oil output reached about 20 thousand tonnes in 2025. By 2030, production capacity could rise to 36 thousand tonnes. At the same time, total demand for omega-3 oils is expected to exceed supply by around 100 thousand tonnes during the same period.

Although algae oil remains more expensive than fish oil — priced between $6,000 and $15,000 per tonne — it offers several advantages. In particular, it has a higher concentration of beneficial fatty acids and more stable supply chains.

While algae oil is often considered a more environmentally sustainable alternative to fish oil, its environmental impact can vary significantly depending on the production technology. In some cases, greenhouse gas emissions can be 30% lower than those associated with fish oil production, although certain cultivation and processing methods may result in higher emissions.

Price volatility drives demand

Experts say the main factor behind growing interest in algae oil is the volatility of fish oil prices. According to Oisin Nolan, communications director at The Center for Feed Innovation, price fluctuations in recent years have pushed producers to look for alternative sources of omega-3.

In 2025, fish oil production remained relatively high and prices were more stable. However, between 2022 and 2024 the market experienced strong volatility, with prices nearly doubling during certain periods.

Under such conditions, major aquaculture feed producers are seeking to reduce risks and diversify their raw material base, increasingly incorporating algae oil into feed formulations.

Beyond aquaculture feed, the use of this ingredient is also growing in other segments, particularly in pet food production and dietary supplements for humans.

Strong growth potential for the sector

Experts note that the algae oil market remains relatively small and is controlled by a limited number of producers. As a result, the launch of just a few large new facilities could nearly double global production capacity.

Although algae oil typically costs more than fish oil, it can become more competitive under certain circumstances. For example, during the closure of the fishing season in Peru in 2023, fish oil prices surged sharply, making algae oil a more attractive alternative.

According to analysts at Rabobank, global climate cycles could trigger another price shock in the fish oil market as early as 2028.

The report by The Center for Feed Innovation will be the first in a series of annual studies focusing on new and emerging ingredients for the feed industry. The algae oil sector was chosen for the first review due to its rapid growth and increasing importance for the global feed and food industries.

Tags: algae oil