The company is working with researchers at the research institute CSIRO, with funding worth A$1 million from the Australian government.
Clover has established a strong position in fish oils and microencapsulated oils for use in functional food products such as breads and dairy products.
However it has previously stated that the rapidly growing omega-3 market has also raised the number of competing products on the market and that it is looking for alternative, less costly, sources of omega-3 in an attempt to reduce the price pressure.
Microalgae could provide it with a refined source of DHA oil for human consumption. Marine microalgae convert carbohydrates to beneficial oils that are passed up to fish through the sea's food chain.
"They may offer a renewable source of omega-3 oils for use in human and animal diets, depending on how well they adapt to life in large-scale culture facilities," said project director Dr Bruce Lee.
CSIRO has isolated microalgae strains that are efficient producers of docosahexaenoic acid (DHA) and eicosapentaenoic acid (EPA) under laboratory conditions.
"We'll be evaluating the scale-up potential of microalgae in large-scale culture vessels," said Clover director Guy Drummond in a statement.
"The market opportunity will be evaluated and a selected strain used to prepare samples at pilot-plant scale. The challenge is to scale up the volume while maintaining their production efficiency and beneficial oil profile," he explained.
The market for foods fortified with omega-3 is seeing strong growth in a number of markets, including Clover's domestic market and Europe. Two companies, Germany's Nutrinova and US-based Martek, already supply DHA derived from microalgae to the food market but at a significantly higher price than fish oils.