Nowadays, non-renewable energy mainly deriving from fossil fuels is known to cause carbon dioxide emissions and contribute to climate change and global warming. There has been another energy source founded to be a better eco-friendly alternative. So far, studies show that microalgae are considered a potential source to play a role in third-generation biofuel feedstocks. The reason why microalgae is a better alternative is due to the many advantages. One of the advantages is the size of space to grow because microalgae require less land area than the biofuels from food crops. An outcome of microalgae is the production of lipids. Data proves that microalgae are a biomass source to receive massive production in oil content and yield. Microalgae biomass with increased amount of biomass and lipids yield are being used to produce biofuel and biogas. Microalgae cultivation is also being integrated with other technologies, such as carbon capture systems. The purpose of genetically engineering microalgae biomass is to increase production and obtain more oil content from the microalgae. To obtain greater biomass yield, genetically engineered microalgae has been proven to be a better alternative. However, genetically engineered microalgae also pose some risks, such as horizontal gene transfer and outcompeting wild-type strains. Therefore, field testing and close monitoring are much needed to ensure the application of bioethical principles.