The conditions of the Northern Atlantic differ substantially from the extensive shallow water areas found in Asia, the main producing region. Therefore, cultivation methods and equipment for growing algae in Europe differ, and more R&D is needed there to scale up production.

Furthermore, stabilisation and processing methods are still lacking, which represents perhaps the most important bottleneck for the sector.

On top of this, the EU algae sector requires substantial capital investments to overcome high production costs (e.g. due to manual rather than mechanised harvesting) and limited scale. There is demand for more landing facilities and biorefineries to enhance processing capacity and achieve the broader potential of algae for food, feed and other sectors (e.g. bioplastics).

Several safety issues with microalgae are technical obstacles (such as heavy metals accumulation and high levels of toxins, which depend on the growing substrate), which must be resolved at production or processing stages. When arsenic content is a concern, that tends to be overwhelming organic arsenic, which is harmless, although EU regulation on this matter currently ignores the distinction between organic and inorganic forms.

There are also regulatory obstacles regarding high iodine content in seaweeds. Iodine content is not subject to harmonised EU limits at present, although it is generally understood that the EU population is iodine deficient overall.

Significant regulatory obstacles lie outside the remit of the EU, and relate to licensing regimes, which are under the responsibility of Member State authorities.

Climatic conditions in the Northern Atlantic, as well as expanding offshore infrastructures (wind farms) provide opportunities for further growth of the sector in the EU.