Microalgae are considered promising feedstock for the production of biofuels and other bioactive compounds, yet there are still challenges on commercial applications of microalgae-based products. This review focuses on the economic analysis, environmental impact and industrial potential of biofuels production from microalgae. The cost of biofuels production remains higher compared to conventional fuel sources. However, integration of biorefinery pathways with biofuels production for the recovery of value-added products (such as antioxidants, natural dyes, cosmetics, nutritional supplements, polyunsaturated fatty acids and so forth) could substantially reduce the production costs. It also paves the way for sustainable energy resources by significantly reducing the emissions of CO2 , NOx , SOx , and heavy metals. Large-scale biofuels production has yet to be successfully commercialized with many roadblocks ahead and heavy competition with conventional fuel feedstock as well as technological aspects. One of the prominent challenges is to develop a cost-effective method to achieve high-density microalgal cultivation on an industrial scale. The biofuels industry should be boosted by Government's support in the form of subsidies and incentives, for addressing the pressing climate change issues, achieving sustainability and energy security.