The world is experiencing an energy crisis and environmental issues due to the depletion of fossil fuels and the continuous increase in carbon dioxide concentrations. Microalgal biofuels are produced using sunlight, water, and simple salt minerals. Their high growth rate, photosynthesis, and carbon dioxide sequestration capacity make them one of the most important biorefinery platforms. Furthermore, microalgae's ability to alter their metabolism in response to environmental stresses to produce relatively high levels of high-value compounds makes them a promising alternative to fossil fuels. As a result, microalgae can significantly contribute to long-term solutions to critical global issues such as the energy crisis and climate change. The environmental benefits of algal biofuel have been demonstrated by significant reductions in carbon dioxide, nitrogen oxide, and sulfur oxide emissions. Microalgae-derived biomass has the potential to generate a wide range of commercially important high-value compounds, novel materials, and feedstock for a variety of industries, including cosmetics, food, and feed. This review evaluates the potential of using microalgal biomass to produce a variety of bioenergy carriers, including biodiesel from stored lipids, alcohols from reserved carbohydrate fermentation, and hydrogen, syngas, methane, biochar and bio-oils via anaerobic digestion, pyrolysis, and gasification. Furthermore, the potential use of microalgal biomass in carbon sequestration routes as an atmospheric carbon removal approach is being evaluated. The cost of algal biofuel production is primarily determined by culturing (77%), harvesting (12%), and lipid extraction (7.9%). As a result, the choice of microalgal species and cultivation mode (autotrophic, heterotrophic, and mixotrophic) are important factors in controlling biomass and bioenergy production, as well as fuel properties. The simultaneous production of microalgal biomass in agricultural, municipal, or industrial wastewater is a low-cost option that could significantly reduce economic and environmental costs while also providing a valuable remediation service. Microalgae have also been proposed as a viable candidate for carbon dioxide capture from the atmosphere or an industrial point source. Microalgae can sequester 1.3 kg of carbon dioxide to produce 1 kg of biomass. Using potent microalgal strains in efficient design bioreactors for carbon dioxide sequestration is thus a challenge. Microalgae can theoretically use up to 9% of light energy to capture and convert 513 tons of carbon dioxide into 280 tons of dry biomass per hectare per year in open and closed cultures. Using an integrated microalgal bio-refinery to recover high-value-added products could reduce waste and create efficient biomass processing into bioenergy. To design an efficient atmospheric carbon removal system, algal biomass cultivation should be coupled with thermochemical technologies, such as pyrolysis.