Excessive carbon dioxide (CO) emissions into the atmosphere have become a dire threat to the human race and environmental sustainability. The ultimate goal of net zero emissions requires combined efforts on CO sequestration (natural sinks, biomass fixation, engineered approaches) and reduction in CO emissions while delivering economic growth (CO valorization for a circular carbon bioeconomy, CCE). We discuss microalgae-based CO biosequestration, including flue gas cultivation, biotechnological approaches for enhanced CO biosequestration, technological innovations for microalgal cultivation, and CO valorization/biofuel productions. We highlight challenges to current practices and future perspectives with the goal of contributing to environmental sustainability, net zero emissions, and the CCE.