Microalgae are excellent source of triglycerides and many other economically important chemicals which have a huge application in the production of Biodiesel and Food processing. Utilization of CO2 present in flue gas by microalgae has gained tremendous attention in the recent years. Carbon dioxide supplied from the flue gas emission pipes of turbines can be the most significant nutrient for the mass scale cultivation of microalgae. In this respect, screening of a suitable species of microalgae capable of growing using concentrated CO2 from flue gas is a challenge. In this study one oleaginous microalgae strain S. obliquus was investigated to observe the effect on growth, biomass production and lipid content by supplying two concentrations of CO2 (15% and >25%) during period of January to December in a serially connected closed photo-bioreactor system. The observation showed maximum biomass concentration of 2.89 g/L and the results indicated 40% higher lipid content for S. obliquus under 15% CO2 relative to lipid content in higher CO2 (>25%) concentration. The recovered biodiesel had higher heating values of 36 MJ kg−1 and contained 28-35% oil having high levels of C16 and C18 fatty acids. The cultivation season was projected to be efficient for 10 months and waste heat drying of the biomass is suggested for two winter months. The technique is proposed for carbon sequestering and energy storage in the form of microalga dry biomass for later conversion into Biofuels.