Renewable and carbon neutral biofuels are necessary for environmental and economic sustainability. The viability of the first generation biofuels production is however questionable because of the conflict with food supply. Microalgal biofuels are a viable alternative. The oil productivity of many microalgae exceeds the best producing oil crops. This paper aims to analyze and promote integration approaches for sustainable microalgal biofuel production to meet the energy and environmental needs of the society. The emphasis is on hydrothermal liquefaction technology for direct conversion of algal biomass to liquid fuel.