Pine needles are relatively less explored lignocellulosic forest waste which can be saccharified to fermentable sugars and be used in subsequent conversion to biofuels. Microbial lipids were produced from pine needles hydrolysate and recovered lipid liquor. Ultrasound assisted pretreatment increased the cellulose content by 20.679%, 27.17%, 32.21%, and 35.61% when treated for 60 min at varying NaOH concentrations (1–4%). The 4-feed batch sachharification was performed to investigate the effect of increasing substrate loadings and fixed initial concentration (5% w/v) and yielded maximum increase of 70.23% in reducing sugars. The pine needle hydrolysate yielded 19.581 g/L total lipids, 35.888 g/L biomass concentration and lipid concentration at 67.46% g/g. Simultaneously, at equimolar ratios of HCl and liquor resulted in highest yields for total lipids (6.92 g/L) and traces of inhibitors. The fatty acids distribution and biodiesel properties revealed a similar biodiesel quality to that of palm oil. Findings from this study facilitate the complete utilisation of pine needles for microbial lipid production to resolve forest fires, and in keeping view of climate, fuels and inorganic resources towards developing a circular bioeconomy.