Summary Microalgal biodiesel has emerged as a promising fuel source, but has still not been adopted commercially. One of the several inherent challenges is its high production cost, which mandates the need to develop an integrated process to produce other valuable coproducts economically. This article combines life cycle assessment and preliminary life cycle cost assessment of a proposed biorefinery, in which a high value product, β‐carotene, is coproduced from microalgae with biodiesel. The GaBi 6 environmental management software was employed to investigate the environmental impact associated with the production life cycle. The mass flow rates and the energy consumed in all stages of biodiesel and β‐carotene coproduction for the functional unit of 1 kg of biodiesel were assessed. When the coproduction of β‐carotene was not taken into consideration, the total energy input for a functional unit of 1.0 kg biodiesel/m2/y and the net energy ratio, that is, energy returned on energy invested were estimated to be 128.1 GWh/y and 0.27, respectively. The life cycle cost analysis showed that although the total production cost associated with coproduction of β‐carotene from Dunaliella salina was higher than that of the sole production of biodiesel, it generates a hiked revenue of up to $37 million/y. Over the system lifetime of 10 years, the sole production of biodiesel showed a loss of US$345 million per functional unit, whereas the coproduction of β‐carotene achieved a net profit of US$120.7 million per functional unit. This work clearly showed that the coproduction of β‐carotene with biodiesel from D. salina overcomes the cost‐ineffectiveness resulting from the production of biodiesel alone.
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