Solar energy is renewable, whereas all other fuels including those of fossil and nuclear origins are limited in amount and are exhaustible. One efficient method of capturing solar energy is through the use of the photosynthetic process to produce biomass (a renewable raw material resource for the production of food, fuel and chemicals) through appropriate conversions. There is currently great interest in using microalgae for the production of biofuels, mainly due to the fact that microalgae can produce biofuels at a much higher productivity than conventional plants and that they can be cultivated in aquatic environments, including seawater, and not compete for land resources with conventional agriculture. There are a number of limitations that hamper the current cultivation techniques used for algal biomass production; most important are high costs associated with increasing the mass transfer and by-product (O2) removal. The invention described here provides a cost-efficient way to eliminate problems associated with CO2 delivery and O2 removal. It is based on utilizing a consortium of microorganisms that produces large quantities of high-value biomass and/or valued metabolic byproducts by utilizing sun light, atmospheric CO2 and organic matter. As a proof of principle, we have used a binary culture of a photoautotrophic cyanobacterium and a heterotrophic bacterium and cultivated it in a non-aerated photobioreactor with only minimal addition of organic C. During this process, the binary culture produced higher amounts of microalgal biomass without air sparging (to remove O2 produced during photosynthesis) or additional CO2 injections. Utilization of binary cultures of phototrophic organisms opens new perspectives for designing efficient and cost effective production processes and means of directing carbon and nutrients from CO2 and waste towards algal production of biofuels: lipids, hydrocarbons.