The photosynthetic capacity of algae as a primary producer in nature and the relative ease of its cultivation on a large scale make it attractive to explore opportunities and develop algal technology for simultaneous sequestration of industrial and atmospheric CO2 (to mitigate climate change), whilst developing sustainable processes for manufacturing renewable fuels alongside biochemicals of value. The development of strategies that maximise algal product yield while optimising the CO2 gas supply is needed for the appropriate scale-up of algal technology. One of the main targets of this technology is the potential exploitation of flue gases, an inexpensive and carbon-rich source. So far, the growth of microalgae has predominantly been investigated using relatively low CO2 concentrations that are far from the levels offered by flue gas (6–25%), which are more useful for energy generation with concomitant development of carbon neutral processes. Here, we tested a series of gas supply strategies to investigate microalgal growth at high CO2 levels with the aim to improve algal CO2 fixation and lipid accumulation. Optimal growth of Nannochloropsis salina (a marine algae) occurred at 6% CO2, whilst few cells grew under 20% CO2. Excess CO2 resulted in medium acidification, pigment reduction, and growth inhibition. However, the fixation capacity of CO2 and the production of specific lipids were improved by O2 removal from the inlet gas by up to 4.8-fold and 4.4-fold, respectively. These parameters were further improved by 72% and 25%, respectively, via a gradual increase in CO2 concentration. Extremely high CO2 levels (100%) completely inhibited cell growth, but this effect was reversed when air containing atmospheric CO2 levels was introduced in place of 100% CO2. These findings will allow for the future development of more effective strategies using algal biotechnology for producing biofuel while mitigating carbon emissions.