Phototropic microalgae are regarded as a promising feedstock for sustainable biodiesel production, as microalgae can use natural sunlight as light source and are able to utilize CO2from flue gases and nutrients (P, N) from waste streams. To make large-scale outdoor microalgae production in closed photobioreactors economically feasible and sustainable, the costs for mixing and degassing should be reduced and the overall energy balance should become positive. This thesis focused on the effect of the accumulation of oxygen on the growth of the oleaginous microalga Neochloris oleoabundansat different light intensities. This study showed at what concentrations oxygen becomes toxic for the algae at the different light conditions encountered during outdoor cultivation and different strategies to overcome the inhibiting factor. The implementations of the main findings of this thesis wereevaluated using an economic model. The model was used to calculatethe energy and costs associated to microalgal biomass production in The Netherlands.The two methods adopted to overcome the negative effect of oxygen in microalgal cultures did result in a decrease in biomass production costs. Moreover, it showed that using the findings of this thesis, a positive energy balance for outdoor production of Neochloris oleoabundans in closed photobioreactors can be reached.