It is widely believed that the biofuels can be sustainably produced using microalgae that are known to convert CO2 from the atmosphere to lipids, in the presence of nutrient and accumulate them as their body mass. However, when algal biofuels are produced using thermochemical route, similar to 30-65 % of proteins present in algae are lost due to decomposition and some of the nitrogen from amino acids is incorporated into the biofuels. The algal protein is a valuable resource that can bring additional revenue to the biorefinery by converting this co-product to high-value polyurethanes. In this work, we have demonstrated a one-step removal of proteins from algae through hydrolysis of the proteins to smaller peptides and amino acids using environment friendly flash hydrolysis (FH) process. Subcritical water was used as a reactant and as a reaction media for hydrolyzing the algae proteins via FH. Scenedesmus spp., slurry in water (3.8 %), was used as the algal feed stock during the FH process which was run at 280 A degrees C for a residence time of 10 s. The soluble amino acids and peptides were separated from the other insoluble algal biomass components (cell wall and lipids) by filtration followed by freeze-drying. The product was then characterized by ion chromatography and Fourier transform ion cyclotron resonance mass spectrometry to determine its composition. The freeze-dried peptide and amino acids were then reacted with diamine and ethylene carbonate to produce polyols that were further processed to produce polyurethane. The relatively high hydroxyl value of these amino acid-based polyols and their compatibility with other commercially available polyols made them particularly suitable for producing rigid polyurethane foams. Due to the presence of amines and secondary amines in these polyols, the polymerization process was self-catalytic and the resulting foams are less flammable than conventional rigid polyurethane foams. The conversion of algal proteins to high-value industrial products by a relatively simple process greatly improves the value of proteins extracted from algae.