This paper presents a study on the production of biofuels from algae cultivated in municipal wastewater in Gothenburg, Sweden. A possible biorefinery concept is studied based on two cases; Case A) combined biodiesel and biogas production, and Case B) only biogas production. The cases are compared in terms of product outputs and impact on global CO2 emissions mitigation. The area efficiency of the algae-based biofuels is also compared with other biofuel production routes. The study investigates the collaboration between an algae cultivation, biofuel production processes, a wastewater treatment plant and an industrial cluster for the purpose of utilizing material flows and industrial excess heat between the actors. This collaboration provides the opportunity to reduce the CO2 emissions from the process compared to a stand-alone operation. The results show that Case A is advantageous to Case B with respect to all studied factors. It is found that the algae-based biofuel production routes investigated in this study has higher area efficiency than other biofuel production routes. The amount of algae-based biofuel possible to produce corresponds to 31 MWfuel for Case A and 26 MWfuel in Case B. (C) 2014 Elsevier Ltd. All rights reserved.