The San Francisco Chronicle reports that the fuel, known as Biodiesel B20, went on sale on Tuesday at gas stations in Berkeley, Oakland, Redwood City and San Jose as part of a monthlong pilot program.
It is made from 20 percent algae and 80 percent petroleum and can be used by any vehicle that runs on diesel.
The algae in the fuel is grown by South San Francisco-based Solazyme Inc. It already has been used in trials by the military and industrial companies.
Officials say a decision will be made on whether to continue offering the biofuel after the pilot project.