Many countries including the European Union (EU) have adopted policies on certain percentage of renewable energy use for transport and other rel­evant sectors. In December 2008, the EU signed a directive that requires 10% of member to come from renewable sources (biofuels, hydrogen and green el policy towards mitigation of climate change effect and global warming. The EU directive also obliges the bloc to ensure that biofuels offer at least 35% carbon emission savings compared to fossil fuels and the figure should rise to 50% in 2017 and debates among governments, policymakers, scientists and environmentalists as currently most commer­cially produced biofuels are derived from sources that compete with or belong to feedstock for human and animal consumption.

In terms of greenhouse gas emission, the biofuels produced from microalgae is generally carbon neutral. The CO2 emitted from burning biofuel is assumed to be neutral as the carbon was taken out of the atmosphere when the algae biomass grew. Therefore, biofuels from microalgae do not add new carbon to the atmosphere. Biofuels can be a viable alternative to fossil fuels on short and medium terms. Additionally, advanced biofuels made from residues or waste have the potential to reduce CO2 emissions with 90% compared to petrol/diesel.

While many years of research and development still lie ahead, if suc­cessful, algae-based fuels can help meet the world’s growing demand for transportation fuel while reducing greenhouse gas emissions. However, a number of challenges remain before algae can be used for mainstream commercial applications as the uncertainty of cost constitutes the biggest obstacle. There is no doubt that research work on microalgae is still in primary stages. Currently, it is not clear that what kinds or families of algae would be most appropriate in order to produce commercially viable biofuels. Researchers are currently working on appropriate commercial cultivation processes of algae biomasses. At this point in time, there is no definitive answer to an open question if it is better to grow algae in photobioreactor system or open air (pond) system. As algae are micro-or­ganisms of a size ten times smaller than human hair, it is a great challenge to harvest them. At present, microalgae harvestings are based on either centrifugation or chemical flocculation, which push all the microalgae to­gether, but these processes associated with high cost [16-23].

Biodiesel or bioethanol production from algae biomass cannot be com­mercially viable unless by-products are optimally utilised. As mentioned earlier, the lipid or the oil part is around 30% of the total algae biomass and the remaining 70% is currently wasted which can be used as nutrients, pharmaceuticals, animal feed or bio-based products. The use of lipid as well as all by-products will allow exploring the full potential of microal­gae towards sustainable environment and economy. At present, 70 -90% of the energy put into harvesting microalgae for fuel usually gets used into extracting the lipids (oil) they produce under current factory designs. It is obvious that new technologies are needed for reducing huge energy losses [13, 23-27].

Microalgae have immense potentials for biofuels production. How­ever, these potentials largely depend on utilisation of technology, input feedstock (CO2, wastewater, saltwater, natural light), barren lands and marine environment. Based on energy content, available technology, land, it is hard to overemphasize that biofuels are a realistic short-term, but definitely not a long-term and large scale solution to energy needs and environmental challenges. Microalgae can be temporary sources of energy, and with the appropriate growth protocols they may address some of the concerns raised by the use of first and second generation biofuels.