We are still some way from realizing the undoubted potential offered by algal biodiesel. Lifecycle analyses suggest that – using current methodologies – the process is marginal in terms of positive energy balance and global warming potential. Prospective schemes for the scale-up of algal production need to be informed by careful process modeling and LCA from the design stage. Without careful assessment of the energy balances and environmental impacts, there is a danger that many proposed schemes would be nonsensical from the point of view of sustainability. Moreover the lack of data from real-life demonstrations means that economic assessments are essentially hypothetical, and there is a pressing need to conduct pilot studies at a realistic scale and under prevailing weather conditions, so as to assess productivities likely to be achieved in practice. Finally, selecting high lipid producing strains optimized to regional climate conditions and to the large-scale production of algae biomass, and preferably also amenable to metabolic engineering, will be crucially important.