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Algal Oil Market

The market for Algal Oil was estimated at $2.4 billion in 2025; it is anticipated to increase to $2.9 billion by 2030, with projections indicating growth to around $3.6 billion by 2035.

Report ID:DS1805019
Author:Debadatta Patel - Senior Consultant
Published Date:
Datatree
Life Science
Nutraceuticals
Algal Oil
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Report Summary
Market Data
Methodology
Table of Contents

Global Algal Oil Market Outlook

Revenue, 2025

$2.4B

Forecast, 2035

$3.6B

CAGR, 2026 - 2035

4.3%

The Algal Oil industry revenue is expected to be around $2.4 billion in 2026 and expected to showcase growth with 4.3% CAGR between 2026 and 2035. The market continues to grow because Algal Oil establishes itself as a sustainable fish-free omega-3 alternative which benefits from environmental rules becoming stricter and businesses working to reduce their carbon footprint and new microalgae cultivation technology investments. The combined market value of Food & Beverages and Biofuels now reaches 41.7% of total application demand because Algal Oil serves two essential purposes in nutrition and energy sustainability initiatives. The Food Grade Type of Algae segment maintained its position as the leading revenue generator in 2025 with $1.38 billion in sales because manufacturers focus on developing high-quality products with traceable ingredients and clean-label formulations for dietary supplements and fortified foods. The market demand for Algal Oil continues to grow because it functions as a fundamental component for sustainable nutrition and energy security throughout all existing and developing markets.

The algal oil market is experiencing steady growth as the product gains recognition for its high nutritional value, sustainability, and versatility. Extracted from microalgae, algal oil is rich in omega-3 fatty acids, antioxidants, and essential lipids, making it an attractive ingredient for dietary supplements, functional foods, and infant formula. Its use is also expanding into pharmaceuticals, aquaculture feed, and cosmetics due to its purity and renewable production process. Recent trends such as the rising demand for plant-based nutrition, increased focus on sustainable omega-3 sources, and innovations in large-scale algae cultivation technologies are further accelerating market adoption.

Algal Oil market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Algal Oil Market Outlook

Market Key Insights

  • The Algal Oil market is projected to grow from $2.4 billion in 2025 to $3.6 billion in 2035. This represents a CAGR of 4.3%, reflecting rising demand across Nutraceuticals and Dietary Supplements, Biofuels Production, and Animal Feed.

  • DSM Nutritional Products, Cellana Inc., and Corbion NV are among the leading players in this market, shaping its competitive landscape.

  • U.S. and China are the top markets within the Algal Oil market and are expected to observe the growth CAGR of 6.3% to 9.0% between 2024 and 2030.

  • Emerging markets including Brazil, South Africa and Malaysia are expected to observe highest growth with CAGR ranging between 8.3% to 10.8%.

  • Transition like Shift to Sustainable Alternatives has greater influence in United States and China market's value chain; and is expected to add $63 million of additional value to Algal Oil industry revenue by 2030.

  • The Algal Oil market is set to add $3.1 billion between 2024 and 2034, with manufacturer targeting Infant Nutrition & Culinary Use Application projected to gain a larger market share.

  • With Rising health consciousness, and growth in Vegan and Vegetarian Diets, Algal Oil market to expand 128% between 2024 and 2034.

algal oil market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Algal Oil - Country Share Analysis

Opportunities in the Algal Oil

The market for Algal Oil derived from microalgae will also expand to USD 0.61 billion by 2030 from its current USD 0.45 billion in 2025 while North American vegan omega-3 consumers remain unserved by this market. The market offers opportunities for brands to introduce high-DHA microalgae oil as a fish oil substitute in softgels and gummies and functional foods which focus on heart health and cognitive performance. Nutraceuticals manufacturers who team up with microalgae fermentation experts and retailers will create faster paths to sustainable omega-3 market adoption while building enduring brand value and customer loyalty.

Growth Opportunities in North America and Asia-Pacific

The North American market for Algal Oil bases its demand on nutraceuticals & dietary supplements because DHA-enriched oils and vegan omega-3 products serve as high-end scientific solutions for heart health and brain function. The market demands innovative plant-based nutrition solutions which unite environmentally friendly fats with functional food items and drinks to serve flexitarian consumers and aging people through scientific-backed labeling and unadulterated product formulations. The market competition has grown stronger because specialty lipid refiners and contract manufacturers and private-label brands now use Algal Oil to expand their omega-3 product lines which forces producers to adopt affordable fermentation methods and trackable supply systems and customized oil concentration solutions. The market demand for algae-based ingredients in sports nutrition and brain health products and fortified foods drives growth in specific regions because of marine oil safety concerns and sustainable ingredient choices by retailers and fast market adoption.
The Asia-Pacific region demonstrates the highest potential for Algal Oil application through its use in infant formula and food & beverages because DHA-enriched plant-based lipids match the region's emphasis on infant nutrition and premium product development and safety standards. The market demands localized product development which meets national regulations and consumer tastes and budget requirements while adding Algal Oil to fortified food products and beverages and functional snack items. The competitive landscape includes three main segments which consist of regional ingredient blenders and infant formula brands and new algal cultivation businesses that use their proximity to aquaculture and biomass resources to achieve better cost efficiency and production capacity. The market expansion of Algal Oil depends on three main factors which include increasing middle-class spending power and population shifts to cities and public interest in brain development during early life and official support for eco-friendly fish-free omega-3 alternatives that enable business growth into animal feed and cosmetic and pharmaceutical-grade markets.

Market Dynamics and Supply Chain

01

Driver: Rising Demand for Sustainable Omega-3 Sources Coupled with Health-Conscious Dietary Trends

The growing global awareness of health and wellness is also significantly driving the demand for algal oil. Consumers are also increasingly seeking natural, plant-based sources of omega-3 fatty acids to support heart, brain, and eye health, particularly as a substitute for fish oil. This trend is also most pronounced in the dietary supplement, infant formula, and functional food industries, where consumers prioritize purity, sustainability, and nutritional benefits. Simultaneously, environmental concerns and overfishing have also fueled interest in alternative omega-3 sources. Algal oil, derived from microalgae, offers a renewable and eco-friendly solution that reduces dependence on marine sources. Technological advancements in algae cultivation, extraction, and refinement have also improved yield, purity, and cost-effectiveness, making algal oil a viable large-scale alternative. Together, these factors—health-conscious consumer behavior and sustainability-driven innovations—are also significantly boosting market growth across various food, nutraceutical, and pharmaceutical applications.
Innovation in algae cultivation and oil extraction technologies is also a key driver for the algal oil market. Techniques such as closed photobioreactors, heterotrophic fermentation, and supercritical CO2 extraction have also enhanced oil yield, purity, and scalability. These advancements allow producers to meet the increasing demand from nutraceutical, functional food, and pharmaceutical sectors efficiently while maintaining product quality. Moreover, automated monitoring systems and optimized growth conditions reduce production costs and environmental impact, making algal oil a more attractive alternative to traditional fish-based omega-3 sources. Such technological progress is also accelerating the adoption of algal oil across global markets.
02

Restraint: High Production Costs

Although algal oil has advantages to offer a significant obstacle hindering its market expansion is the steep production costs linked to its manufacturing process. Extracting oil from algae requires complex bioengineering methods that rely heavily on technology and skilled workers. This relianceon technology and labor intensive production processes can drive up the cost of the final product. thus making it less accessible, to a wider consumer base. Manufacturers are facing challenges in expanding algae cultivation and maintaining a yield which has led to increased production costs and hindered the widespread adoption of algal oil, in the market.
03

Opportunity: Emerging use of Algal Oil in premium sustainable aquafeed for salmon farming in Norway and Chile and High-purity Algal Oil as a clean-label DHA source for infant formula manufacturers across Asia-Pacific markets

The market for global macroalgae- and algae-derived ingredients will expand from USD 1.38 billion and USD 0.54 billion in 2025 to USD 1.73 billion and USD 0.71 billion during the 2030 period because of increasing demand for environmentally friendly aquafeed ingredients. Norwegian and Chilean salmon producers need stable EPA and DHA content in their feed while they work to decrease their dependence on unstable fish oil supplies. The production of Algal Oil from microalgae provides stable product quality and enhanced biosecurity measures and complete production tracking. Feed formulators who work with algae biorefinery companies and large farming groups through co-development agreements can establish permanent high-value contracts.
Asian-Pacific infant formula manufacturers focus on using clean-label plant-based DHA sources because parents want to know what ingredients their children are consuming. The production of lactose-free hypoallergenic premium infant formulas becomes possible through High-purity microalgae-derived Algal Oil because it eliminates marine contaminants and fish oil taste problems. The expanding Algal Oil market segment will reach CAGRs between 3.8% and 5.1% during 2030 so companies that act first will obtain regulatory clearance and backed-by-science product labels and dedicated supply agreements. The market opportunity exists best for microencapsulated DHA algal oil which suits production of infant formula powders and ready to drink products and medical nutrition solutions.
04

Challenge: Regulatory and Environmental Concerns

The growth of the algal oil sector may encounter significant challenges due to stringent regulations and environmental considerations. Managing the large volumes of waste generated from algal biomass, along with potential ecological impacts from large-scale cultivation, such as nutrient runoff or disruption of local ecosystems, presents notable hurdles. Compliance with environmental guidelines and sustainable production practices is essential to mitigate risks, ensure responsible growth, and maintain industry credibility.

Supply Chain Landscape

1

Microalgae Cultivation

Cellana Inc.AlgatechRoquette Klötze GmbH & Co. KG
2

Algal Oil Processing

DSM Nutritional ProductsCorbion NVRoquette Klötze GmbH & Co. KG
3

Algal Oil Formulation

DSM Nutritional ProductsCorbion NVAlgatech
4

Omega-3 Applications

Dietary supplementsFunctional foodsInfant nutrition
Algal Oil - Supply Chain

Use Cases of Algal Oil in Nutraceuticals & Dietary Supplements

Nutraceuticals and Dietary Supplements : In the health and wellness field algal oil is commonly used for its content of omega 3 fatty acids that play a key role in preventing and treating heart disease issues Algal oil enriched health products and supplements are becoming popular due to their improved absorption and lack of allergens Key industry leaders such, as Archer Daniels Midland and DSM have leveraged their distribution channels and strong research and development capacities to establish dominance in the market.
Biofuels Production : The worldwide focus on eco energy solutions is increasing as the use of algal oil in the biofuels sector grows as well. Algal oil not only provides sustainable energy but also helps lower carbon emissions. Key players like Renewable Energy Group and ExxonMobil are deeply involved in this field. Are using advanced techniques to cultivate algae, for efficient biofuel manufacturing.
Animal Feed : Algal oil is widely utilized in animal feed due to its nutritional content which boosts the quality of products like eggs and dairy while eliminating any fish like taste typically associated with omega 3 fatty acids supplementation in feed by BASD and Neptune Wellness Solutions innovative algal oil offerings, for feed manufacturers.

Recent Developments

Over the few years algal oil has become increasingly popular in the nutraceutical and biofuel sectors as a sustainable and renewable source of omega 3 Fatty acids. The growing interest, in this plant. Derived option is driven by a rising recognition of the health advantages linked to omega 3 And the conscious choices made by consumers.

December 2024 : Algoil Corp has obtained funding from leading investors to enhance and expand its unique technology for extracting algal oil pointing towards significant potential growth, in the worldwide market.
November 2024 : BioMarine Innovations is enlarges its oil production facility in North America to meet the increasing demand and create a promising future, for the market.
October 2024 : Greenseal Biolabs introduced a range of products with increased levels of DHA, in their algal oil. This move demonstrates a competitive stance and aims to set their offerings apart in the market.

Impact of Industry Transitions on the Algal Oil Market

As a core segment of the Nutraceuticals industry, the Algal Oil market develops in line with broader industry shifts. Over recent years, transitions such as Shift to Sustainable Alternatives and Technological Advancements in Algal Oil Production have redefined priorities across the Nutraceuticals sector, influencing how the Algal Oil market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Shift to Sustainable Alternatives

The Algal Oil market is undergoing a significant transition driven by heightened environmental concerns and a global shift towards sustainable alternatives. As organizations increasingly adopt eco-friendly practices, the demand for renewable biofuels and health supplements, particularly those rich in Omega-3 fatty acids, is surging. This shift is not only reshaping consumer preferences but is also catalyzing increased research and funding for innovative extraction methods. Notably, the transition towards sustainable options is projected to enhance the market's value chain, contributing an estimated $63 million to the Algal Oil industry's revenue by 2030. This strategic pivot positions Algal Oil as a key player in the renewable energy sector, aligning with both consumer demand and environmental goals while driving significant business growth.
02

Technological Advancements in Algal Oil Production

The algal oil industry has greatly benefited from ongoing technological innovations that improve operational efficiency and reduce manufacturing costs. Advanced cultivation techniques, including closed photobioreactors and optimized heterotrophic fermentation, allow producers to maintain consistent algae growth while minimizing resource usage. Similarly, modern oil extraction methods, such as supercritical CO2 extraction and enzymatic processes, enhance yield and purity while lowering energy consumption. These improvements enable higher algal oil output at reduced production costs, which translates into more competitive final product pricing. As a result, technological advancements are facilitating broader adoption of algal oil across nutraceutical, food, and pharmaceutical sectors.