Introduction: Microalgae cultures represent an attractive source of biomass for biofuel and chemicals production since they can have higher energy yields per area than conventional biomass crops and can be grown on marginal land using waste, saline, or brackish water. Their use can thus avoid the food-fuel competition for land, resulting in major economic and social benefits. At the present stage however, major developments are needed for making microalgae-to-biofuels processes technologically and economically feasible. One substantial technical challenge is the development of cost-effective processes for efficient conversion of microalgae biomass to biofuels. Our research aims to study the production of biodiesel and of bio-Synthetic Natural Gas (SNG) from microalgae. Experimental: Several species of microalgae are grown at laboratory scale to compare the yield of biomass and lipid production. In addition to the potential use of oil for biodiesel production, we are currently working towards demonstrating the technical and economical feasibility of an innovative process, “SunCHem”, for SNG production via hydrothermal (HT) processing of microalgae. The process is envisioned as a closed-cycle with respect to nutrients, water and CO2, that are separated and reused for microalgae growth, resulting in unprecedented energy efficiency for both algae and fuel production. Results and Discussion: Before the feasibility of the process can be demonstrated several key challenges stemming from its closed-nature need to be tackled. One major challenge is the recycling of nutrient-rich effluents, which upon continuous operation might become enriched in potential toxicants that in turn affect the growth of algae. We demonstrated that the presence of trace metals (Ni, Cr) in the recycled effluent as a result of reactor wall corrosion and catalyst leaching resulted in adverse effect on the growth of microalgae. The effect was directly proportional to the heavy metal concentration, and for the highest concentrations tested (Ni 25 ppm or Cr 5 ppm) complete inhibition of cell growth was observed. It is known that algae, like many other organisms, can adapt to extreme environments, including those with heavy metal contamination, and the resulting mutants are better suited to survive under those particular conditions. In the framework of the present COST Action we will investigate the potential of developing and using metal-tolerant mutant microalgae as a biomass source for the SunCHem process. Experiments will be undertaken to develop Cr- and Ni- tolerant mutants by selective breeding and then comparing the mutants and the wild-type strains for their sensitivity to the heavy-metal contaminated HT effluent and the resulting biomass yields obtained in each case. It is hoped that the use of the metal-tolerant mutants will contribute to the cost-effectiveness of the process by offering an efficient alternative to the use of the more costly setups otherwise needed for effluent clean-up, thus providing a way to avoid the reduction in the biomass yield upon continuous operation of the SunCHem process. Conclusions: Another aspect of utmost importance is the evaluation of the availability for algae of the nutrients contained in the recycled effluents from the process. To this end, microalgae growth experiments will be performed using as sole nutrient source the salt brine delivered from the HT step. The biomass composition with and without recycled input from the hydrothermal process will be characterized. These tests will provide information on the recycling efficiency and speciation of nutrients and will help to identify potential nutrient management issues. If there is significant loss of a given key nutrient, it will have to be replaced in the bioreactor. A candidate for loss through volatilization could be N. Subsequent studies will explore the role of growth media and especially that of nutrients such as N, P, and minerals. Algae growth experiments will be performed using different synthetic media compositions and varying nutrient levels to assess the tolerance of algae to changes in nutrient level and quality. The issue is of special relevance as the possibility of recycling and reusing all the nutrients, including N and P, is a sine qua non condition for closing the loop in the process.