One primary application of algae is in the production of biodiesel; however, they can also be employed as a means of removing carbon dioxide from biogas. Algae have recently attracted a lot of attention due to these advantages. Reducing carbon dioxide and possibly hydrogen sulfide concentrations improve biogas quality significantly. Because biogas is created as a mixture of methane gas and a significant amount of carbon dioxide, it needs to be cleaned (scrubbed) to create usable, ultra-pure biomethane. Algae offer a more environmentally friendly way to extract carbon dioxide from biogas and utilize it for photosynthesis whilst yielding itself for production of biodiesel. Algal culture systems for upgrading biogas present a viable substitute to traditional physical and/or chemical upgrading methods, as they are safer, more affordable, and less harmful to the environment hence contributing to a more sustainable circular economy. To completely explore the enormous potential of growing algae to capture carbon dioxide, more study is necessary. This review's objective is to present fact-based knowledge regarding algae's capacity to absorb carbon dioxide from biogas.