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Algal biofuel has become an attractive alternative of petroleum-based fuels in the past decade. Microalgae have been proposed as a feedstock to produce biodiesel, since they are capable of mitigating CO2 emission and accumulating lipids with high productivity. This article is an overview of the updated status of biofuels, especially biodiesel production from microalgae including fundamental research, culture selection and engineering process development; it summarizes research on mathematical and life cycle modeling on algae growth and biomass production; and it updates global efforts of research and development and commercialization attempts. The major challenges are also discussed. [ABSTRACT FROM AUTHOR]