Energy is essential and vital for development. The use of fossil fuels as energy is now widely accepted as unsustainable due to depleting resources and also due to the accumulation of greenhouse gasses in the Environment. Renewable and carbon neutral biodiesel is necessary for environmental and sustainability. The micro algae which are one of the most abundant organisms in the world got final attention because of its highest capacity to produce bio fuels in per acre as compared to other power crops and more yielding capacity (58,700L/h). These tiny organisms don’t require big lands or farmhouses. They can be grown in open ponds, plastic bags, glass vessels and photo bioreactors. Algae can accumulate the CO2 and reduce the CO2 levels in environment to prevent the global warming. The micro algae have emerged as high lipid content to produce the bio diesel. Scenedesmus quadricaudaare a green pyramid shape planktonic micro algae. It is of potentially great importance in the field of biotechnology. It has been shown to grow best at a temperature of 280 C, Light period of 12 hrs in CHU 13 medium. It has high lipid content (25 % – 86 %).In this study an attempt has been made to evaluate the CO2 sequestration efficiency of Scenedesmus quadricauda for its maximum biomass production and lipid content. The algae were grown in culture rack and open race way ponds. Flask cultures were maintained at 320 C temperature and 8000 Lux light intensity with different light and dark periods. Different concentrations of CO2 inputs were studied to know optimum CO2 concentration to get Maximum yield of Biomass, Lipid and Fatty Acid Methyl Esters (FAME) .For open raceway pondstudies the algal cultures were grown out side in the open environment. physico-chemical parameters like pH and D.O along with light and temperatures were monitored for both flask and open race way pond cultures. Best yields were noted in open raceway ponds at 28-40 0 C Temperatures and 80-120Klux light intensities, at 12% CO2 for S. quadricauda with a biomass yield of 1.485 g/L, lipid yield of 0.452 g/L and FAME yield of 0.21g/L.