Producing biodiesel from algae has been touted as the most efficient way to make biodiesel fuel. The advantage being that the land requirement for growing oil for biodiesel is very small. Independent studies have demonstrated that algae is capable of producing 30 times more oil per acre than the current crops now utilized for the production of biofuels. Algae biofuel contains no sulfur, is non-toxic and highly biodegradable. Some species of algae are ideally suited to biodiesel production due to their high oil content, in excess of 50%, and have extremely rapid growth rates.

Micro algae have many special features, which make them an interesting class of organisms. Many freshwater algae are microscopic in nature. They vary in size ranging from a smallest cell diameter of 1 micron to largest algal seaweed of 2 mm in height. Microalgae are very colourful. They exhibit different colours such as green, brown and red. In general, microalgae have a shade between and mixtures of these colors. Most microalgae can make their own food materials, through photosynthesis by using sunlight, water and carbon dioxide. A few of them are not photoautotropic, but they belong to groups, which are usually autotrops. They may be found as free-floating phytoplankton, which form the base of food webs in large water bodies. They can also be found on land attached to various surfaces like steps, roofs etc. There are microalgae, which live, attached to rocks or paving stones and other substrate at the bottom of the sea. They may occur as epiphytes on higher plants, or on other algae. All major bodies of water have these organisms in abundance, including, permanent or semi-permanent water of lakes, small streams, large rivers, reservoirs, ponds, canals and even waterfalls. Most of these organisms can tolerate different degrees of salinity. Some of them dwell in fresh water or sea water, whereas some are able to tolerate the extreme salinity of salt pans. In the sea, they may occur below the range of tidal exposure, in the sub tidal zone, as well as in the harsh inter tidal environment of the sea shore where they may be beaten by waves. Growing in the inter tidal zone, micro algae are subjected to a number of stresses and disturbances. At low tide, they may bake in the sweltering sun or even get rained on by fresh water. In some parts of the world, inter tidal micro algae are even scoured by sea ice, yet they persist living in this environment at 4^oC, some even close to freezing point. Those algae, which live attached to the bottom of a water body, are called benthic algae, and the ecosystems of which they are part, are referred to as benthos. The upper limit for their survival is 30^oC, but there are also some algae, that thrive at 60^oC in the hot springs. In deserts, they are found least common in wind blown sandy deserts and most common in the pebbly, rocky or clayey deserts. Small, microscopic algae, which drift about in bodies of water, such as lakes and oceans, are called phytoplankton. Phytoplanktons are important in freshwater and marine food webs, and are probably responsible for producing much of the oxygen that we breathe. Some forms of algae are able to grow in Arctic and Antarctic sea ice, where they can be quite productive and support a whole associated food web. Some algae can grow on the seabed, beneath a thick blanket of Arctic or Antarctic sea ice, even though they are in total darkness for a considerable part of the year. Algae are found in snow too! In some parts of the world, blooms of snow algae may paint the snow beds red in spring. One may be astonished to find that algae even occur in the driest deserts. In some areas of the Namib Desert in Namibia, and the Richtersveld in South Africa, one often finds many quartz stones scattered about on the ground. Since Quartz is quite translucent, the stones permit a considerable amount of light to pass through, so there is sufficient light for photosynthesis to take place underneath the stones. A small amount of moisture may be retained in the soil under the quartz stones, so unicellular algae are able to grow underneath them. It is amazing to note that algae are also found in the air, for there are many algae that colonize new bodies of water, simply by drifting about through the air.
Organisms that make up the algae, include representatives from three kingdoms and seven divisions. Cyanochloranta and Prochorophyta (from Kingdom Monera), Pyrrhophyta, Chrysophyta, Phaeophyta, and Rhodophyta (from Kingdom Protista), and Chlorophyta (from Kingdom Plantae).
These photosynthetic organisms are far from monolithic. Biologists have categorized micro algae in a variety of classes, mainly distinguished by their pigmentation, life cycle and basic cellular structure. The four most important (at least in terms of abundance) are:

1. Diatoms (Bacillariophyceae): These algae dominate the phytoplankton of the oceans, but are also found in fresh and brackish water.

2. Green Algae (Chlorophyceae): These are also quite abundant, especially in freshwater.

3. Blue-Green Algae (Cyanophyceae): Much closer to bacteria in structure and organization, these algae play an important role in fixing nitrogen from the atmosphere.

4. Golden Algae (Chrysophyceae): This group of algae is similar to the diatoms. They have more complex pigment systems, and can appear yellow, brown or orange in color.

The bulk of the organisms for oil, fall in the first two classes, the diatoms and the green algae. The unique ability of algae to grow in saline water means that we can target areas of the country in which saline groundwater supplies prevent any other useful application of water or land resources. In a world of ever more limited natural resources, algae technology offers the opportunity to utilize land and water resources that are, today, unsuited for any other use. Land use needs for micro algae complement, rather than compete, with other biomass-based fuel technologies.
A spectacular diversity is seen in algal reproduction. Asexual reproduction is seen in some algae, while sexual reproduction is noticed in some algae, others follow both the mechanisms for multiplication. Asexual reproduction is accomplished by binary fission where an individual cell breaks into two, which is often seen, in unicellular algal members. Most algae are capable of reproducing by spores, these spores on dissemination from the parent alga grows into new individual under favorable conditions. Sexual reproduction however is restricted to multi-cellular forms where the union of cells takes place through a process called conjugation.