The reason behind extracting oil from Microalgae is due to its minimum carbon footprint as compared to other biofuels which are extracted from various other seeds. In the current study, potential algal specie Cladophoragoensis were collected from creaks of Navi Mumbai and employed as a feedstock for biodiesel production. Present review focuses on algal biofuels and their environmental sustainability. Microalgae are autotrophic microorganisms having extremely high photosynthetic efficiency and are valued as rich source of lipids, hydrocarbons, and other complex oils for biodiesel. This extracted oil was converted into biodiesel via transesterification process. The main goal behind the research is to develop an alternate source & better way to reduce CO2 footprints.