The credit crunch claims another victim, this time it’s the algal-fuel hope of MIT and Harvard. The company GreenFuel Technologies promised to provide green energy from algae. “GreenFuel’s high yield algae farms recycle carbon dioxide from flue gases to produce biofuels and feed, reducing net carbon dioxide production as waste becomes profit. Harvesting algae for biofuels enhances domestic fuel production while mitigating CO2,” reads their website.

Greentech media now reports that the company claims to have fallen victim to the economic times: “We are closing doors. We are a victim of the economy,” the report has venture capitalist Duncan McIntyre saying.

GreenFuel has had problems in the past when its algae over ran and they couldn’t control production. But the company seems to have been adept at raising money, although the last round, $13.9 million came over a year ago.

The hopes of a world fuelled by green slime are not over, though. Plenty other algae projects are still in existence. In late April, the San Diego Center for Algae Biotechnology opened, an academic and commercial collaboration. In New Zealand Aquaflow continues its open-air production and in Colorado, Solix does the same in tanks. Both these companies, as well as GreenFuel were highlighted in an article from last year looking specifically at 15 algae companies.

It will be interesting to watch progress of these other companies in these challenging credit crunch times.