In recent decades, third-generation bioenergy fuels have become a more attractive method of fuel production, and environmental concerns forced the world to look at bioenergy fuel as an alternative for economic development. Bioenergy fuel also facilitates maintaining national energy security and reduces environmental complications. Bioenergy fuels are energy-enriched chemicals that are generated either directly through biological processes or from the chemical conversion of the biomass of dead organisms. These are produced by photosynthetic organisms such as algae, photosynthetic bacteria, and vascular plants. Among all these organisms, algae are currently being promoted as an ideal third-generation bioenergy fuel feedstock due to their rapid growth rate, CO2 fixation ability, and high lipid production capacity. Algae do not compete with food or feed crops and can be produced on nonarable land, thus ensuring a lower water footprint and higher energy efficiency during its production. Algae have high bioenergy potential as they can be used to produce fuels, such as biodiesel and bioethanol. This book chapter is mainly focused on the global current status and challenges for large-scale production of third-generation bioenergy fuel. Third-generation bioenergy fuel has so much to offer including many integrated applications and advanced uses in the future fuel industry. Thus, to overcome the energy crisis, global cooperative efforts are very important for transforming third-generation bioenergy fuels into our current energy system that will further aid in cultivation methodology development as well as technological advancement of bioenergy fuel production.