The recognised deficiencies in sustainable development and the extensive environmental deterioration and global warming concerns caused by anthropological CO2 emissions are major issues facing the world today. Massive reduction in atmospheric CO2 concentration, through the development of processes that utilize CO2 or minimise CO2 emissions, is critical to ensure environmental sustainability. One of the major contributors to anthropological CO2 emission is the combustion of petroleum fuels in vehicular engines for transportation. Biofuel, as an alternative to petroleum transport fuels, has become a partial substitute for fossil fuel. The use of microalgae for biofuel production has gained enormous research interests in recent years, primarily due to the ability to photosynthetically convert CO2 (a biology-inspired process engineering route) into potential biofuel biomass, as well as food, feed stocks, and high value biochemicals. In this review, the CO2 fixation ability of microalgae in comparison to other plant species and genetic engineering methods of improving microalgae photosynthetic rate, have been discussed. Advances in bioprocess technologies for microalgal biomass creation and biodiesel production are also described and other important matters are discussed.