This paper used a theoretical approach based on physical laws to estimate large-scale algal production using recycled nutrients to present a multi-utilization scheme for algae that is environmentally friendly. A closed algal cultivation system that utilizes secondarily treated sewage for algal culture as a tertiary treatment is discussed. Results indicate that cultivation of 18% lipid content microalgae ( Chlorella vulgaris ) and 45% lipid content microalgae ( Botryococcus braunii ) in raceway ponds effects the reduction of nitrogen discharges by 126 kg N ha⁻¹ yr⁻¹ and 111 kg N ha⁻¹ yr⁻¹, respectively. Meanwhile, the projected biodiesel productivities were 4,052 L ha⁻¹ yr⁻¹ and 8,885 L ha⁻¹ yr⁻¹, respectively, accompanied with projected biogas outputs of 9,008 m³ ha⁻¹ yr⁻¹ and 3,670 m³ ha⁻¹ yr⁻¹, respectively. However, an insufficiency of nutrients in secondarily treated sewage resulted in high production costs. For further cost reduction, a cultivation technology that requires less energy and has highly efficient land use is essential. Combining biomass gasification plants with the algal cultivation system as an integrated approach to algal biodiesel production and CO₂ utilization may make up the shortage in power required by photobioreactors, bringing a projected reduction in the biodiesel production costs by 18% from ¥256 L⁻¹ to ¥210 L⁻¹. JEL Classification: Q01, Q42, Q53, Q56