Hybrid processing of cellulosic biomass, composed of thermochemical-based pyrolysis of biomass into fermentative substrates followed by biochemical-based algal fermentation into lipid-rich biomass was developed. The hybrid process has proven an effective way for producing biofuel from lignocellulosic biomass. In this work, life cycle assessment and techno economic analysis were performed for algal fermentation of the acetic-acid rich stage fraction of bio-oil under different scales and fermentation conditions. These results will provide guidance for choosing optimal algal fermentation parameters. Moreover, with more biodiesel produced, increased environmental and economic benefits per gallon of biodiesel can be expected.