In the past decades, a series of phenomena such as global warming, glacier melting, sea level rise, and haze weather caused by the greenhouse effect have been reported, which seriously threaten the future of humans. To address this challenge, several countries have initiated interventions to prevent climate change, such as carbon neutralization. Given the current economic, social development and environmental protection requirements, microalgal carbon fixation appears to be a suitable approach to achieve carbon net zero emission while also promoting microalgal biofuel production. This promotes the realization of energy structure transformation and optimization of carbon neutralization. This article provides a comprehensive and state-of-the-art review of research progress on microalgal carbon capture and solid biofuel production via the torrefaction process, with focus on the efficiency and capacity of microalgal carbon fixation, as well as the principle and application of microalgal torrefaction. The detailed review includes the practical value and development prospect of microalgal torrefied biochar, fuel performance conversion, and mechanism in the torrefaction process. Furthermore, the environmental impact of microalgal carbon fixation and torrefaction process are discussed to evaluate the overall environmental benefits of microalgal utilization via life cycle assessment (LCA) method. The technical difficulties of microalgal carbon fixation and torrefaction process are also discussed. This review paper is beneficial to guide the scheme demonstration and specific implementation of microalgal carbon neutralization and thus lead to the efficient establishment of microalgal carbon reduction, biomass accumulation, and biofuel production techniques.