Microalgae: Green Engines for Achieving Carbon Sequestration, Circular Economy, and Environmental Sustainability—A Review Based on Last Ten Years of Research

Feeding a growing global population requires sustainable, innovative, and cost-effective solutions, especially in light of the environmental damage and nutrient imbalances caused by excessive chemical fertilizer use. Microalgae have gained prominence due to their phylogenetic diversity, physiological adaptability, eco-compatible characteristics, and potential to support regenerative agriculture and mitigate climate change. Functioning as biofertilizers, biostimulants, and bioremediators, microalgae accelerate nutrient cycling, improve soil aggregation through extracellular polymeric substances (EPSs), and stimulate rhizospheric microbial diversity. Empirical studies demonstrate their ability to increase crop yields by 5–25%, reduce chemical nitrogen inputs by up to 50%, and boost both organic carbon content and enzymatic activity in soils. Their application in saline and degraded lands further promotes resilience and ecological regeneration. Microalgal cultivation platforms offer scalable in situ carbon sequestration, converting atmospheric carbon dioxide (CO2) into biomass with potential downstream vaporization into biofuels, bioplastics, and biochar, aligning with circular economy principles. While the commercial viability of microalgae is challenged by high production costs, technical complexities, and regulatory gaps, recent breakthroughs in cultivation systems, biorefinery integration, and strain optimization highlight promising pathways forward. This review highlights the strategic importance of microalgae in enhancing climate resilience, promoting agricultural sustainability, restoring soil health, and driving global bioeconomic transformation.