The potential of microalgae biomass production for low-cost commodities—biofuels and animal feeds—using sunlight and CO2 is reviewed. Microalgae are currently cultivated in relatively small-scale systems, mainly for high value human nutritional products. For commodities, production costs must be decreased by an order of magnitude, and high productivity algal strains must be developed that can be stably cultivated in large open ponds and harvested by low-cost processes. For animal feeds, the algal biomass must be high in digestible protein and long-chain omega-3 fatty acids that can substitute for fish meal and fish oils. Biofuels will require a high content of vegetable oils (preferably triglycerides), hydrocarbons or fermentable carbohydrates. Many different cultivation systems, algal species, harvesting methods, and biomass processing technologies are being developed worldwide. However, only raceway-type open pond systems are suitable for the production of low-cost commodities.