Continued use of petroleum sourced fuels is now widely recognized as unsustainable because of depleting supplies and the contribution of these fuels to the accumulation of carbon dioxide in the environment. Renewable, carbon neutral, transport fuels are necessary for environmental and economic sustainability. Biodiesel derived from oil crops is a potential renewable and carbon neutral alternative to petroleum fuels. Unfortunately, biodiesel from oil crops, waste cooking oil and animal fat cannot realistically satisfy even a small fraction of the existing demand for transport fuels. As demonstrated here, microalgae appear to be the only source of renewable biodiesel that is capable of meeting the global demand for transport fuels. Like plants, microalgae use sunlight to produce oils but they do so more efficiently than crop plants. Oil productivity of many microalgae greatly exceeds the oil productivity of the best producing oil crops. Approaches for making microalgal biodiesel economically competitive with petrodiesel are discussed.