Algae Oil Market Size, Share, and Growth Forecast, 2025 - 2032

Algae Oil Market Size and Trends Analysis

The global algae oil market size is projected to rise from US$ 2.4 Bn in 2025 to US$ 3.1 Bn by 2032. It is anticipated to witness a CAGR of 3.7% during the forecast period from 2025 to 2032.

The algae oil industry growth is spurred by the ingredient’s sustainable sourcing and rich omega-3 profile, which is important for the nutraceutical and food industries. Among its various segments, the infant formula DHA algae oil market stands out, showcasing rising demand for plant-based DHA sources in early childhood nutrition.

Key Industry Highlights:

• Leading Region: North America, with around 42.7% share in 2025, augmented by increasing consumer awareness of plant-based nutrition and strong regulatory support.
• Fastest-growing Region: Europe, owing to supportive policies, increasing demand for sustainable omega-3 sources, and a mature food fortification market.
• New Product Launch: U.S.-based Spotlight Foods and Algae Cooking Club introduced microalgae-based cooking oil products in September 2024. Both products bagged the Seed Oil Free Certified seal.
• Dominant Grade: Fuel grade, approximately 58.2% share in 2025, boosted by favorable government incentives and its potential for large-scale production of renewable biofuel.
• Leading Application: Animal feed records nearly a 29.6% share in 2025, as algae oil improves livestock nutrition while reducing dependence on overfished marine resources.

Global Market Attribute	Key Insights
Algae Oil Market Size (2025E)	US$ 2.4 Bn
Market Value Forecast (2032F)	US$ 3.1 Bn
Projected Growth (CAGR 2025 to 2032)	3.7%
Historical Market Growth (CAGR 2019 to 2024)	3.1%

Market Dynamics

Driver - Plant-based and Clean-label Preferences Spur Demand

Surging popularity of natural products in the dietary supplement industry is spurring demand for algal oil as consumers seek plant-based and clean-label alternatives to synthetic or animal-derived ingredients. Algae oil’s status as a natural and sustainable source of essential omega-3 fatty acids fits perfectly with this trend. Consumers also associate natural products with few side effects and better long-term health benefits, improving algae oil’s appeal over traditional fish oil supplements.

The trend is mainly evident among Gen Z and millennials who prioritize sustainability, ethical sourcing, and transparency. In North America and Europe, algae oil is becoming a staple ingredient in vegan and organic supplement lines. Various brands have broadened their algae oil products with certifications such as Non-GMO Project Verified and USDA Organic, thereby strengthening the natural product positioning. Regulatory bodies are further approving algae oil for use in natural supplements, removing barriers for manufacturers.

Restraint - Digestive Discomfort Leads Some Users to Discontinue Use Quickly

Common side effects such as headache, nausea, diarrhea, and stomach pain have slowed the adoption of algae oil to a certain extent. These symptoms often emerge due to the body adjusting to concentrated omega-3 fatty acids or residual compounds in less-refined algae oil products. A 2023 consumer survey by Nutraceutical World reported that about 12% of new algae oil supplement users discontinued use within the first month due to mild gastrointestinal discomfort.

Such side effects create a barrier in markets where consumers expect supplements to be easy on digestion and free from unpleasant reactions. It has compelled firms to invest in refining processes that reduce impurities and improve digestibility. Education and transparent labeling are helping to address concerns. To address this barrier, some brands now emphasize gradual dosage ramp-up and consumption with meals to reduce gastrointestinal issues. Health influencers and medical professionals also recommend algae oil as a fish oil alternative, but caution about possible mild side effects initially.

Opportunity - Rising Specialty Oil Demand Creates New Avenues for Algae Oil

Increasing demand for specialty oils in the food industry is creating new avenues for algae oil by addressing consumer desires for clean-label, sustainable, and health-improving ingredients. Specialty oils such as those rich in omega-3 fatty acids, antioxidants, and unique fatty acid profiles are preferred by food manufacturers to differentiate products and meet regulatory health claims. Algae oil, with its plant-based origin, fits perfectly into this niche. Its neutral taste and high oxidative stability make it suitable for fortifying foods without altering flavor or shelf life.

The food industry’s move toward sustainability also favors algae oil. Unlike conventional specialty oils from tropical crops, algae can be produced with a small land and water footprint. It can also capture carbon dioxide during cultivation. Companies such as Corbion have partnered with food manufacturers to co-develop algae oil ingredients with verified sustainability credentials. Such partnerships help support eco-conscious branding. This trend is anticipated to accelerate as supply chains prioritize traceability and environmental impact.

Category-wise Analysis

Grade Insights

Based on grade, the market is segmented into fuel, food, and feed. Among these, the fuel grade segment will likely hold around 58.2% share in 2025, as its production is associated with large-scale industrial processes, specifically in regions with policy-backed demand for low-carbon fuels. Governments in the U.S., the EU, and parts of the Asia Pacific have introduced incentives such as renewable fuel credits and carbon offset schemes that make algae-derived biodiesel and jet fuel financially competitive with fossil-based alternatives. Another factor is the ability of algae strains to produce high lipid yields without competing for arable land or freshwater. This enables industrial-scale cultivation in non-arable zones or wastewater systems.

Food-grade algae oil is gaining momentum as it delivers a plant-based and allergen-free source of omega-3 fatty acids at a time when consumers are rejecting fish-derived oils due to sustainability concerns and taste issues. Unlike fish oil, algae oil delivers DHA and EPA without the risk of heavy metal contamination. It has a key selling point in markets, including the EU, Japan, and Australia, where food safety regulations are strict. Its rise is also attributed to the booming vegan and flexitarian population worldwide.

Application Insights

By application, the market is segregated into biofuel, dietary supplements, food and beverage, and animal feed. Out of these, animal feed applications are expected to account for nearly 29.6% of the share in 2025 as they provide a high-value solution to two pressing challenges in livestock and aquaculture, namely, nutritional enrichment and sustainability. Algae oil provides concentrated omega-3 fatty acids that improve animal growth rates, feed conversion efficiency, and health. In aquaculture, where fishmeal and fish oil supplies are volatile due to overfishing, algae-derived oil delivers a consistent alternative.

Biofuel applications of algae oil are experiencing swift growth because they provide a sustainable alternative to fossil fuels while complying with global climate goals. Governments worldwide are introducing policies that encourage the use of renewable fuels. Technological developments have improved the efficiency of algae cultivation and oil extraction, making biofuel production feasible. Additionally, algae biofuel production often integrates co-product streams, including protein-rich algae biomass for animal feed or bioplastics, improving economics.

Regional Insights

North America Algae Oil Market Trends - Rising Demand for Fish Oil Alternatives Fuels Growth

North America is estimated to account for approximately 42.7% of the share in 2025, due to regulatory clarity, established research and development infrastructure, and surging commercial adoption across various industries. Omega-3 ingredient is considered one of the fastest-growing segments, specifically for Docosahexaenoic Acid (DHA) and Eicosapentaenoic Acid (EPA) sourced from algae.

Demand in the U.S. algae oil market is being driven by the rise of plant-based dietary trends and the growing need for sustainable alternatives to fish oil in both human supplements and aquafeed.

The regional market is poised to witness steady growth due to the introduction of the International Algal Oil Standards (IAOS) by SGS Nutrasource in April 2024. It has set a benchmark for sustainability and quality, giving domestic suppliers a competitive advantage in global trade.

These certification frameworks are becoming increasingly important as customers demand transparency on sourcing and production impacts. Beyond supplements, algae oil is penetrating skincare and culinary markets. California-based Osea, for instance, has built a powerful following for its Undaria Algae Body Oil, showcasing anti-aging and skin-hydration benefits.

Europe Algae Oil Market Trends - Updated U.K. Dietary Guidelines Boost Sales

Europe is expanding steadily, backed by consumer health trends and industrial development. Market leadership is concentrated in Germany and the U.K., with demand rising for algal omega-3. In the U.K., updated dietary recommendations now advise 450 mg of combined EPA and DHA per day, up from the previous 200 mg guideline. This shift is creating new opportunities for plant-based omega-3 suppliers, including algae oil producers, as consumers seek sustainable alternatives to fish oil.

Policy frameworks are accelerating market growth. The European Commission released a strategic communication titled ‘Towards a Strong and Sustainable EU Algae Sector’ in 2022. It outlined 23 specific actions designed to boost sustainable algae and seaweed production, improve regulatory coordination, and fuel growth across various applications. The EU-backed FUELGAE project, launched in 2024, is also trialing photobioreactor technology to convert captured carbon dioxide into biofuels for aviation and maritime use.

Asia Pacific Algae Oil Market Trends - Shifting Dietary Preferences Augment Vegan Omega-3 Demand

Vegan omega-3 supplements are a standout segment in the Asia Pacific. This surge is attributed to changing dietary preferences, especially among young consumers in urban centers who are avoiding fish oil for ethical or allergenic reasons. Demand is further rising due to the expansion of fortified products in infant nutrition, prenatal care, and senior health markets. China is the dominant driver of algae oil consumption in the region, owing to rising health awareness among its booming middle class. In addition, the increasing popularity of vegetarian diets and surging investments in domestic microalgae cultivation are spurring demand.

Japan and India are also emerging as key markets, with India witnessing a notable uptake in prenatal DHA-enriched dairy products. Industry structure is moderately fragmented in Asia Pacific, with leading multinationals such as DSM, Corbion, Cellana, Algisys, and Polaris controlling around 50 to 60% of the market. The region is anticipated to witness considerable growth through 2032, backed by supportive government policies, industrial-scale developments, and rising demand from health-conscious consumers.

Competitive Landscape

The global algae oil market is highly competitive, characterized by a blend of large industrial collaborations, mid-tier ingredient companies, and small consumer-facing start-ups. They are focusing on distinct application areas. The most prominent commercial momentum is currently in the omega-3 segment for aquafeed, where algae oil directly replaces fish oil in salmon and trout feed. This market provides high margins and a ready B2B customer base compared to the low-cost commodity vegetable oil market, making it attractive for several companies. Niche brands are aiming to broaden their presence in the premium culinary oil field. Leading players are focused on sustainability branding, clean flavor, and chef-driven adoption to gain a competitive advantage.

Key Industry Developments:

• In April 2025, Aker BioMarine launched a new algae-based DHA oil named Revervia, which is ideal for dietary supplements. It contains between 40 and 60% DHA. It caters to both vegetarian consumers and environmentally conscious buyers as it is produced with minimal impact on marine resources.
• In February 2025, GC Rieber VivoMega launched an algae-based DHA and EPA product called Algae 1060 TG Premium, a cost-effective and high-quality solution for use in a wide range of supplement formulations.

Companies Covered in Algae Oil Market

• TerraVia Holdings, Inc.
• Diversified Energy Corporation
• Cellana Inc.
• Algix, LLC
• Pond Technologies, Inc.
• Algatech Ltd.
• Lonza Group
• Cargill Incorporated
• Cyanotech Corporation
• Royal DSM N.V.