Over the last decade, intensive research has been carried out all over the world to explore the huge potential of microalgae for biofuel production, which could be coupled to the use of industrial flue gas to enhance CO2 fixation as a greenhouse gas mitigation strategy and to remove pollutants from various wastewaters. However, large-scale microalgae production for such purposes is not yet technically and economically feasible. Challenges are thus to increase the efficiency of both algae production and conversion into biofuel. The following parameters are critical for sustainable microalgal biomass production: CO2 concentration; light intensity and quality, photoperiod; photobioreactor design; batch, fed-batch or continuous conditions; possible use of wastewater streams. The purpose of our ongoing research is to clearly assess the influence of these parameters on the quantitative and qualitative production of biomass, lipids and added-value chemicals, taking into account the probable antagonism netween biomass and lipid production, often depending on the nitrogen supply. Several microalgal species 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 feasibility of an innovative process, for syngas production via hydrothermal processing of microalgae. The process is envisioned as a closed-cycle with respects to nutrients, water and CO2, that are separated and reused for microalgae growth. The possible effect of increasing injection of CO2 in the growth medium is under investigation, with the aim to mitigate CO2 and enhance biomass production.