A major Ontario industrial operation is making a bet that algae might solve its greenhouse gas emissions problems.

U.S. Steel Canada announced Tuesday it will partner with Union Gas and Pond Biofuels to test an innovative system that pulls carbon dioxide directly out of its power station’s smoke stack in Nanticoke, Ont., and pipes it to a tank that will grow algae.

In addition to keeping that CO2 out of the atmosphere, the algae can later be turned into biodiesel and other useful byproducts.

The announcement is a major coup for Pond Biofuels, a small Canadian company that is alone in the world in operating this kind of technology using industrial emissions.

“Algae is the solution to the climate-change issue,” explains Steve Martin, Pond Biofuels’ CEO. He says it’s not enough to hide carbon underground, as you would with a carbon capture and sequestration project. You need a way to fix the carbon in place.

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