Among the existing renewable alternatives to fossil fuels, microalgae have received increased interest as new biomass source for the production of renewable energy as they are ubiquitous having rapid growth rates with high yields and can be harvested daily. For the commercial production of micro algal biofuel, high lipid productivity of dominant, fast-growing strain is a major prerequisite. To reduce the microalgal production cost and to make the biofuels a viable technology, MCRC jointly with EID Parry, Nellikuppam and Murugappa Water Technology & Solutions has demonstrated cultivation of microalga using industrial wastes like sugar effluent and exhaust CO2 that supplies the required nutrients for algal growth and productivity. The biomass generated is subjected to stress condition, which was found to be very effective in inducing biosynthesis and accumulation of lipid in algal cells.