Concerns about rising energy demand, fossil fuel depletion, and global warming have increased interest in developing and utilizing alternate renewable energy sources. Among the available renewable resources, microalgae biomass, a third-generation feedstock, is promising for energy production due to its rich biochemical composition, metabolic elasticity, and ability to produce numerous bioenergy products, including biomethane, biohydrogen, and bioethanol. However, the true potential of microalgae biomass in the future bioenergy economy is yet to be realized. This review provides a comprehensive overview of various biochemical conversion processes (anaerobic digestion, direct biophotolysis, indirect biophotolysis, photo fermentation, dark fermentation, microalgae-catalyzed photo fermentation, microalgae-catalyzed dark fermentation, and traditional alcoholic fermentation by ethanologenic microorganisms) that could be adapted to transform microalgae biomass into different bioenergy products. Recent advances in biochemical conversion processes are compiled and critically analyzed, and their limitations in terms of process viability, efficacy, scalability, and economic and environmental sustainability are highlighted. Based on the current research stage and technological development, biomethane production from anaerobic digestion and bioethanol production from traditional fermentation are identified as promising methods for the future commercialization of microalgae-based bioenergy. However, significant challenges to these technologies’ commercialization remain, including the high microalgae production costs and low energy recovery efficiency. Future research should focus on reducing microalgae production costs, developing an integrated biorefinery approach, and effectively utilizing artificial intelligence tools for process optimization and scale-up to solve the current challenges and accelerate the development of microalgae-based bioenergy.
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