Coupled level set and CFD (computational fluid dynamics) methods are adopted in this work to track the moving gas–liquid interfaces in the riser of an external loop airlift photobioreactor (ALR) in which microalgae are used to produce biofuels and capture CO2 from flue-gas. Modeling the behavior of gas bubbles is a crucial aspect for the fine-tuning of the operation of the reactor when inserted into a closed-loop biorefinery at the pilot-scale. The experimental data used for simulation were completely acquired or calculated from hydrodynamic experimental campaigns carried out on the ALRs. The rise, coalescence, and shape dynamics of the bubbles of the flue-gas are simulated in a rectangular domain representing the vertical section of the ALR riser. Different correction approaches, such as the conservative level set method (CLSM), are proposed to face the volume loss characteristic of LSM. Computational results evidenced strong agreement with the experimental data (bubble shapes and trajectories). The physically-based CLSM model was then effectively used for the fine-tuning of the multiphase flow regime inside the ALRs, suggesting operating conditions for the outdoor cultivation with Reynolds number = 10000 – 11000, Sherwood number between 1400 and 1800, and spherical-caps bubbles in the upper half of the riser, mildly churning the microalgae while avoiding damages to their cells.