Due to biodiesel produced from oil crops, waste cooking oil and animal fat cannot meet the high demand for renewable transport fuels, another biomass feedstock microalgae becomes attractive. This is because (1) microalgae are sunlight-driven cells, (2) grow rapidly with biomass double time of 24 hours, (3) require less high quality land used compared to other feedstock, (4) many are exceedingly rich in oil and (5) biodiesel produced from microalgae is ‘carbon neutral’ [76] (see Figure 6). However, several challenges need to be tackled in order to produce biodiesel from microalgae commercially. Scott et al. [77] provides a comprehensive review discussing these challenges and potential tackles.

There are estimated 300 000 species in algal strain. After screening, typical species including Botryococcus braunii, Nannochloropsis sp., Neochloris oleoabundans, Nitzschia sp., and Schizochytrium sp. have up to 77% (dry wt) oil content [76]. Microalgal biomass is produced with the presence of light, fed carbon dioxide and essential inorganic elements including nitrogen (N), phosphorus (P), iron and in some cases silicon. Biomass is then harvested and extracted to obtain oil for biodiesel production using transesterificaiton with methanol. Nutrients and spent biomass are recycled in the downstream process.

Factors involved in these phases are all important to be considered and optimized to maximize the biomass yield and minimize the production cost. First of all, the light level needs to be manipulated to deliver an optimal light to all of the algae cells within the culture. The excess light level not only can results in less efficient use of absorbed light energy but also can cause biochemical damage to the photosynthetic machinery [77]. Secondly, though minimal nutrients requirement can be estimated according to the approximate molecular formula of microalgae which is CO0.48 H1.83 N0.11 P0.0i[78], nutrients such as phosphorous must be supplied in excess. In order to minimise the nutrient cost, sea water supplement with commercial nitrate and phosphate fertilisers can be used for growing microalgae [76]. Thirdly, the choice of facility (open raceway ponds or closed photobioreactor) is important since the scale-up of biomass production is largely depending on the surface area rather than volume because light only penetrate a few centimeters [77]. The former raceway pond is an open-top close loop recirculation channel with a typical depth of 0.3 m. It is relatively cheap to build and has been operated with extensive experience for decades. However, the drawbacks for this type of facility are (1) it is difficult to avoid microbial contamination, (2) it requires for extensive areas of land for ht raceways and substantial cost regarding harvesting, and (3) it has poorly mixed therefore has optically dark zone [76, 77]. The photobioreactor a tubular reactors consists of an array of glass or plastic transparent tubes. It requires a large amount of energy for pumping and compressing air for sparging culture [77].

The biomass broth from production phase is harvested and processed to remove water and residual nutrients which are recycled. The concentrated biomass paste is then extracted to obtain oil and lipids using water and extraction solvent (e. g. hexane) [79]. It is difficult to release lipids from microalgae intracellular location using an energy-efficient way because of the large amount of solvent required. Also it is key to avoid significant contamination by other cellular components such as DNA [77].

The efforts in academic research and industrial commercialization of biodiesel production from microalgae include: (1) integration of production process such as energy integration, water and nutrient recycling; (2) improvement of microalgae biology via genetic and metabolic engineering such as enhancing their photosynthetic efficiency, increasing biomass yield and oil content and improving temperature tolerance to reduce cost associated with cooling; (3) improving photobioreactors regarding their capacity and operational ability [76].