Congress is currently questioning whether existing policies are leading to the expanded use of domestic advanced biofuels—including algae-based biofuels (ABB), among other options. In the Energy Independence and Security Act of 2007 (EISA, P.L. 110-140 ), Congress expanded the Renewable Fuel Standard (RFS2) by mandating that increasing volumes of renewable biofuels be used in the nation's transportation fuel supply. The RFS2 identified four specific biofuel categories and established time-specific mandates for quantities of fuels, the fastest-growing and largest of which is the cellulosic biofuels category. Algae is not identified as a cellulosic biofuel feedstock type to meet the RFS2. According to RFS compliance data monitored by the U.S. Environmental Protection Agency (EPA), a steady production of small amounts of cellulosic biofuel began in mid-2013. As a result of the small amounts produced, EPA was compelled to lower the cellulosic biofuel mandate for the fourth successive year and has proposed to do so for a fifth year in 2014. Moreover, the long-term certainty of the tax incentives for which ABB is eligible is debatable. There is considerable concern about how the U.S. cellulosic biofuels industry will develop to meet the mandates in the absence of federal support and which, if any, other types of biomass could be used as a primary feedstock to meet the mandate. Thus far, legislation pertaining to algae-based biofuels has not been introduced in the 113 th Congress. Congress held hearings and Members introduced legislation during the 112 th Congress that supported the use of multiple biomass feedstocks as energy sources to meet transportation needs. Of particular interest are feedstocks that are sustainable and domestic in origin, could spur job creation, and would have few adverse environmental impacts. Some argue that algae—generally defined as simple photosynthetic organisms that live in water—is one biomass feedstock that could meet these criteria. Algae can be used to produce a variety of biofuels, but most production to date has focused on biodiesel and jet fuel, and it is unclear whether production of other biofuels would be feasible given resource requirements and other concerns. If successfully commercialized, ABB would have potential advantages and disadvantages compared to other biofuels. Among its advantages, algae has higher biomass yields per acre of cultivation than other feedstocks, leading to larger oil yields. It also may use water that is undesirable for other uses (e.g., wastewater or saline sources). In addition, ABB production could potentially use carbon dioxide from the flue gas of stationary sources (e.g., power plants), if ABB facilities are co-located with such facilities. Some ABB drawbacks concern the cost of running a commercial-scale facility, the volume and availability of resource inputs (e.g., water, land, and nutrients), the immaturity of technology to convert algae into biofuels, and the sensitivity of algae to minor changes in its environment. Substantial ABB research and development (R&D) has taken place since the 1950s, but for various reasons ABB has yet to gain a foothold in the transportation fuel market. The main reason is that ABB is not currently economical to produce at commercial scale. Also, it is not a major component of energy and agricultural statutes; as a result there is likely more inherent investment risk. The relevance of ABB to the U.S. transportation sector could potentially rise if technological advances are achieved, if oil prices rise, if certain fuels (e.g., cellulosic biofuels) prove incapable of meeting annual RFS2 mandates, or as federal agencies and corporations announce ventures involving ABB for both vehicle and aircraft use. This report discusses the status of ABB research and development, federal funding, and legislative concerns. While this report focuses on the use of algae as a biomass feedstock for transportation fuel, there are other applications for algae (e.g., nutraceuticals, cosmetics). However, congressional and public interest are currently focused on algae use for transportation. Many ABB discussions involve its limited eligibility for the RFS2—a mandate requiring that the national fuel supply contain a minimum amount of fuel produced from renewable biomass—compared to other biomass feedstocks. Although ABB is eligible to participate in the RFS2, it does not qualify as an eligible feedstock under the cellulosic biofuel subcategory because it is not defined as cellulosic in the RFS2 regulations. The RFS2 is composed of two biofuel categories: unspecified biofuel and advanced biofuels (or non-corn starch ethanol; see Figure 1 ). The advanced biofuel portion includes three subcategories: cellulosic and agricultural waste-based biofuels, biomass-based diesel, and "other" (see Figure 2 ). Each advanced biofuel subcategory has a specific volume mandate for each year of the RFS2 (currently 2006-2022) and must meet lifecycle greenhouse gas (GHG) emissions reduction thresholds. The cellulosic biofuels subcategory is ultimately the largest component of the RFS2. Its carve-out is set at 0.5 billion gallons for 2012 (roughly 3% of the RFS2) and ramps up to 16 billion gallons in 2022 (roughly 44% of the RFS2). The biomass-based diesel carve-out of the advanced biofuel category (the portion that algae-based biofuels do qualify for) had a 2013 mandate of 1.28 billion gallons, and EPA proposes a 2014 and 2015 mandate for the same amount. The biomass-based diesel volume for 2016 to 2022 has not been set and will be determined by the Environmental Protection Agency (EPA) in future rulemaking, but is to be no less than 1 billion gallons. In February 2013, EPA clarified that the RFS biomass-based diesel subcategory includes jet fuel. Assuming algae is converted to a diesel/jet fuel substitute, ABB would qualify for the biomass-based diesel subcategory, but to date it cannot compete cost-effectively with soy biodiesel in this subcategory. One study reports that the production of algae biodiesel could cost from $9.84 to $20.53 per gallon, compared to $2.60 per gallon for petroleum diesel production. In 2011, the U.S. Navy and the U.S. Department of Agriculture (USDA) announced the $12 million purchase of 450,000 gallons of advanced drop-in biofuel, from a blend of non-food waste and algae, to be mixed with aviation fuel or marine diesel fuel. It is unclear what impact ABB may have on the RFS biomass-based diesel carveout if it proves to be cost-effective to produce ABB as a jet fuel. Even with an RFS2 mandate and tax credits, cellulosic biofuels have yet to meet the required mandate. EPA reports that very few facilities are consistently producing cellulosic biofuels for commercial sale. As a result, the EPA lowered the 2010, 2011, 2012, and 2013 cellulosic biofuel mandates and proposes to lower the 2014 mandate. Congress may consider whether other biomass feedstock types, including algae, should play a larger role in meeting the overall RFS2 mandate. Some suggest that broadening the RFS2 to include algae as a cellulosic biofuel feedstock would boost production opportunities. Others contend that ABB will never be cost-competitive. Others could argue that the potential for higher prices of crude oil would be an incentive to produce fuels that may eventually be lower in cost. Technology exists to convert algae (like any organic matter) into multiple forms of energy, including liquid fuels (e.g., diesel or jet fuel), electric power, and biogas. However, there is no current technology to convert this biomass feedstock into a transportation biofuel economically and at commercial scale. While no technology is currently available to make this conversion commercially viable, microalgae, macroalgae, and cyanobacteria are each being considered for ABB production. Microalgae are microscopic photosynthetic organisms. Macroalgae, commonly referred to as seaweed, are fast-growing marine and freshwater plants that can grow to be quite large. Cyanobacteria are not technically algae, but bacteria that live in water and collect energy via photosynthesis. All three require light, nutrients, water, land, and carbon dioxide (CO2) or sugar to be successfully cultivated. Three primary components of algae—lipids, carbohydrates, and proteins—can be used to make energy. Different algae strains produce these components in different proportions. Depending on the biofuel to be produced, all or only one of these components may be used. Algae undergoes four major processes in its conversion to biofuel: cultivation, harvest, processing, and biofuel/bioproduct conversion (see Figure 3 ). Algae cultivation may be photoautotrophic (algae requiring light to grow) or heterotrophic (algae grown without light and requiring a carbon source such as sugar to grow). Photoautotrophic cultivation can occur in an open pond or in a closed system (e.g., a photobioreactor; see Figure 4 ). Each has advantages and challenges. Open pond cultivation is generally less expensive and simpler to build, but is subject to weather conditions, contamination, and more water consumption. Cultivation conditions may be better controlled in a closed system, but there are scalability concerns, and closed systems historically have been more expensive than open ponds. Heterotrophic cultivation occurs in a fermentation tank and can use inexpensive lignocellulosic sugars for algae growth, which could lead to competition for feedstocks with other biofuel technologies. After cultivation, a variety of methods can be used to harvest the algae, including flocculation, filtration, and centrifugation.