The quest for viable and scalable biofuel sources has been at the forefront of scientific innovation for the past three decades. Due to its rich chemical constituents, microalgal biomass has emerged as a pivotal sustainable and scalable feedstock for biorefineries. This comprehensive review critically analyzes the different types of microalgae feedstock, concurrent extraction technologies, bio-pre-treatment procedures, and the key chemical and physical parameters influencing lipid formation and algal biofuel production. We propose a novel approach of photo-initiated culturing of algal biomass using photobioreactors (PBRs) to address the limitations of concurrent space and time-related constraints. The innovative photo bio-refinery strategy presented herein aims to enhance sustainability factors while minimizing emissions, catering to the needs of futuristic non-electric vehicles. A comparative quality analysis of microalgae-derived biofuel against conventional fossil fuels and other biofuels is conducted, considering chemical, environmental, economic, and social perspectives. Furthermore, we elucidate the efficacy of bio-pre-treatment strategies such as dehydration, hydrothermal liquefaction, pyrolysis, and gasification in optimizing biofuel production. The proposed photo biorefineries exhibit the potential to yield a diverse range of value-added products, including biodiesel, biogases, bio-fertilizers, bio-pesticides, bio-alcohols, dyes, proteins, carotenoids, and drug vitals. This review provides a comprehensive framework for the development of sustainable and efficient microalgae-based biorefineries, paving the way for a greener and more economically viable future in the biofuel industry.