Abstract The sustainable, efficient production of biofuel can lead to reductions in greenhouse gas emissions, lowered climate change impact and increased security owing to the fulfilment of global energy demands. Microalgae have been shown as an attractive feedstock for renewable fuel production, such as biodiesel and biogas. To date, more effort has been put towards the production of biodiesel using the lipid contents in algal cells, while less attention has been placed on biogas production through anaerobic digestion. However, anaerobic digestion has the potential to generate energy from waste residues and to mobilize nutrients enabling subsequent recovery and/or recycling. Therefore, anaerobic digestion is an area with strong potential for novel research focusing on the development of a sustainable integrated system of biodiesel and biogas production. The result is essentially a solar power plant, producing fuel with minimal inputs and a closed nutrient loop, a necessity for sustainable and cost-efficient production of biofuel. In this review we discuss relevant studies on biodiesel and biomethane production, including the potential improvements and advantages when using an integrated approach for biodiesel and biogas production with special focus on nutrient recycling.