Algal biomass is attractive for renewable liquid fuels, but much water accompanies this aquatic biomass feedstock. The energy requirements for drying algae are very high, which militates against a large-scale fuel production process employing this step. Thus, there is a need for processes that convert wet algal biomass directly and therefore operate in the aque­ous phase. Two major considerations of the emerging algal biofuel industry are the energy­intensive dewatering of the algae slurry and nutrient management. The process is suitable for high-moisture aquatic biomass such as defatted microalgae and macroalgae because the bio­mass is processed as slurry in hot compressed water.