Only about 40% is used for ethanol and that's a very recent (as in this past decade) change.
The argument you make though explains why we aren't using algae to produce biofuel. Far more valuable for other purposes as called out in this Forbes post[0]. Here's a choice quote:
> An acre of algae can produce almost 5,000 gallons of biodiesel. It does not compete with food crops for arable land or potable water and could produce over 60 billion gallons/yr that would replace all petroleum-based diesel in the U.S.
[0] https://www.forbes.com/sites/jamesconca/2014/04/20/its-final...