Algal biodiesel production requires large scale cultivation and harvesting systems, incorporating some challenges such as reducing the cost per unit area, and reducing the cost of downstream processing, etc. In the identification of suitable biofuel species, fatty acid profiling is also an important consideration. In the short run, the improvement of lipid profiles from some major strains that have high levels of lipid efficiency through genetic engineering techniques, and using photovoltaic or artificial photosynthesis technologies to convert solar energy into liquid fuels to store huge amount of energy, and solar CO2 recycling processes for other value-added products will be the key challenges for researchers.