Florida-based Algenol Biofuels claims it can produce ethanol using algae, according to Technology Review, without the need for fresh water or agricultural lands.

The company has caught the attention of Dow Chemical, which is getting behind the Algenol technology.

The companies announced plans to build and operate a demonstration plant on 24 acres at Dow's Freeport, Texas, manufacturing site. The plant will consist of 3,100 horizontal bioreactors capable of holding about 4,000 liters.

The bioreactors are filled with salt water from the ocean. The algae growing inside are exposed to sunlight and fed a stream of carbon dioxide from Dow's ...