The production of biofuels and other products from algae is a technology that is rapidly developing. This paper presents an overview of algae, its benefits over other biofuel sources and the technology involved in producing algal biofuel. The case study in this report looks at the potential of algal biodiesel, produced using power plant exhaust, to replace our current petrodiesel supply and consequently reduce greenhouse gas emissions. The results suggest that using 60% of all coal and gas power plants would allow this new fuel source to replace petrodiesel entirely and thus reduce greenhouse gas emissions by ∼5%. The challenge at the present is to improve the efficiency of algal fuel production technology so as to lower the cost of algal biodiesel and thereby make it commercially competitive with petrodiesel. Researchers are currently developing various means of accomplishing this and successful commercialization is anticipated by 2018.