BackgroundOleaginous microorganisms are sustainable alternatives for the production of biodiesel. Among them, oleaginous fungi are known for their rapid growth, short life cycles, no light requirement, easy scalability, and the ability to grow in cheap organic resources. Among all the sources used for biodiesel production, industrial wastewater streams have been least explored. We used oleaginous fungi to decontaminate sago processing wastewater and produce biodiesel.ResultsAmong the 15 isolates screened for lipid production and starch utilization using the Nile red staining assay and amylase plate screening, three isolates accumulated > 20% (w/w) of their dry cell mass as lipids. The isolate ASEF14 exhibited the highest lipid accumulation (> 40%) and was identified as Aspergillus caespitosus based on the 28S rRNA gene sequencing. The maximum lipid content of 54.4% in synthetic medium (SM) and 37.2% in sago processing wastewater (SWW) was produced by the strain. The Fourier-transform infrared (FTIR) spectroscopy of the fungal oil revealed the presence of functional peaks corresponding to major lipids. Principal component analysis (PCA) of the FTIR data revealed major changes in the fatty acid composition during the transition from the growth phase (Days 1–3) to the lipid accumulation phase (Days 4–7). The fatty acid methyl esters (FAME) analysis of fungal oil from SWW contained 43.82% and 9.62% of saturated and monounsaturated fatty acids, respectively. The composition and percentage of individual FAME derived from SWW were different from SM, indicating the effect of nutrient and fermentation time. The fuel attributes of the SM- and SWW-grown fungal biodiesel (kinematic viscosity, iodine value, cetane number, cloud and pour point, linolenic acid content, FA > 4 double bonds) met international (ASTM D6751, EN 14214) and national (IS 15607) biodiesel standards. In addition to biodiesel production, the strain removed various contaminants such as total solids (TS), total suspended solids (TSS), total dissolved solids (TDS), dissolved oxygen (DO), chemical oxygen demand (COD), biological oxygen demand (BOD), total nitrogen (TN), total phosphorus (TP), and cyanide up to 58.6%, 53.0%, 35.2%, 94.5%, 89.3%, 91.3%, 74.0%, 47.0%, and 53.84%, respectively, from SWW.ConclusionThese findings suggested that A. caespitosus ASEF14 is a potential candidate with high lipid accumulating ability (37.27%), capable of using SWW as the primary growth medium. The medium and incubation time alter the FAME profile of this fungus. The physical properties of fungal oil were in accordance with the biodiesel standards. Moreover, it decontaminated SWW by reducing several polluting nutrients and toxicants. The fungal biodiesel produced by this cost-effective method could serve as an alternate path to meet global energy demand.