Microalgae are a promising alternative for future biofuel production. Compared to first- and second-generation biofuels, microalgal production systems offer higher biofuel productivities per unit area and do not necessarily depend on fertile soils or freshwater. However, little is known about how microalgal biofuel production on a scale large enough to meet a nation’s domestic transport energy targets might conflict with agricultural lands and biodiversity in the context of energy independence. Here, we use estimates of lipid productivity, resource availability, and accessibility to identify the most cost-effective areas for fulfilling 30% of each country’s transport energy demands in 2016 and 2050 while avoiding areas of high agricultural and biodiversity value. To fulfill this target, microalgal cultivation would need less than 1.1% of global land area, mainly in drier low-latitude areas or drier lowlands within each country. The most promising countries for microalgal biofuel production are mainly located in North and East Africa, the Middle East, western South America, the Caribbean, and Oceania. In countries with either high energy demands or without available human-transformed dry lands, decreasing targets in microalgal biofuel production or shifting production to countries where impacts are lower, could further reduce potential conflicts with food production and biodiversity.