Concern about greenhouse gases emission, such as CO2, is continuously increasing. Forthcoming taxes on industrial CO2 emission have also had large impact on those concerns. One way to reduce the amount of CO2 is to bind it as a biomass. Algae are plants with very high growth rates, which make them especially suitable for binding CO2 in a large quantity. Ongoing research at the Blue Lagoon R&D center with the aim of cultivating algae by feeding them on CO2 flue gas from geothermal power plant will be described here. Among problems arising from using such gas is its large sulphur content (mainly as H2S) which is detrimental to most plants. Two different species of algae are compared. A comparison to cultivation with pure CO2 gas is also made. In addition to serve as a carbon sequestration, the algae cultivation does have many other practical purposes, several of which will be mentioned here. The Blue Lagoon ltd is currently using such bio-mass in its skin care products but other exploitation include extraction of oil for fuel production and its use in fish feed.