The third generation of biofuels uses algae as a raw material. Algae are a preferred raw material compared to agricultural source (i.e., corn). However, the algae industry struggles to meet the biofuel demand, and these biofuels are still mostly a promise. However, several factors are contributing to the growing study of production, including a low demand for algae cultivation areas; the possibility of cultivation avoiding agricultural areas already considered scarce; rapid growth of algae when compared to many other higher plants; the better use of biomass in the conversion of biofuels; and, probably the most important, possibility of various coproducts derived from a single biomass. For biofuel production, biomass can be subjected to biochemical, thermochemical, chemical, or direct conversion. Those techniques involve photobiological H2 production, fermentation, anaerobic digestion, gasification, pyrolysis, liquefaction, transesterification, and direct power generation. Microalgae biomass can yield various important and valuable bioproducts, and the biomass can still be explored for biofuel production. This chapter discusses how new technologies are going to lead to the third-generation of biofuels, as well as their future market perspectives on a global scale.