Microalgae are considered as potential sources for biodiesel production due to the higher growth rate than terrestrial plants. However, the large-scale application of algal biodiesel would be limited by the downstream cost of lipid extraction and the availability of water, CO2 and nutrients. A possible solution is to integrate algae cultivation with existing biogas plant, where algae can be cultivated using the discharges of CO2 and digestate as nutrient input, and then the attained biomass can be converted directly to biomethane by existing infrastructures. This integrated system is investigated and evaluated in this study. Algae are cultivated in a photobioreactor in a greenhouse, and two cultivation options (greenhouse with and without heating) are included. Life cycle assessment of the system was conducted, showing that algal biomethane production without greenhouse heating would have a net energy ratio of 1.54, which is slightly lower than that (1.78) of biomethane from ley crop. However, land requirement of the latter is approximately 68 times that of the former, because the area productivity of algae could reach at about 400 t/ha (dry basis) in half a year, while the annual productivity of ley crop is only about 5.8 t/ha. For the case of Vaxtkraft biogas plant in Vasteras, Sweden, the integrated system has the potential to increase the annual biomethane output by 9.4%. This new process is very simple, which might have potential for scale-up and commercial application of algal bioenergy. (C) 2013 Elsevier Ltd. All rights reserved.