Abstract: The present invention relates to an integrated method for processing algal biomass comprising a marine algal strain or a freshwater (non-marine) algal strain or a plurality of marine algal strains or a plurality of freshwater (non-marine) algal strains or any combination thereof or other carbonaceous feedstocks like biosolids or any combination of algae/algae mixtures and carbonaceous feedstocks to produce biofuel. The method includes subjecting the algae/algal mixture to hydrothermal liquefaction/co-liquefaction using sub-critical water to produce a biocrude. The biocrude is pretreated using a renewable biocatalyst to remove impurities which include Nitrogen (N), Sulfur (S), Oxygen (O) and salts and the pretreated biocrude is mixed with heteroatoms a petrocrude to form a biocrude-petrocrude blend. The biocrude-petrocrude blend is distilled and the distillate fractions are treated using the renewable biocatalyst to remove impurities and finally hydrotreated to produce fractions biofuels.