Fourth generation biofuel (FGB) uses genetically modified (GM) algae to enhance biofuel production. Although GM algae biofuel is a well-known alternative to fossil fuels, the potential environmental and health-related risks are still of great concern. An evaluation of these concerns and accordingly devising appropriate mitigation strategies to deal with them are important to a successful commercialized production of FGB. While extensive research has been carried out on genetic modification and other technologies that aim to increase the productivity of algae strains, only a handful of them deal with the legislative limitations imposed on exploiting and processing GM algae. This paper examines this legislation and the mitigation strategies to meet potential risks associated with the exploitation and processing of FGB. Open-pond system is an economic solution for large-scale cultivation of microalgae; however, the concern regarding the health and environmental risk of cultivating GM algae and the associated stringent regulations is considered as the main barrier of FGB production. Disposal of the residue is another important issue that should be considered in FGB production. The byproducts obtained from energy extraction step and residual water from the harvesting process may contain plasmid or chromosomal DNA that may cause the risk of lateral gene transfer. Hence an appropriate mitigation practices should be used for replacement of the hazardous water residue and by-products with more environmentally friendly alternatives. The results obtained from several field testing projects for open-environment exploitation of GM algae show that under the various conditions used, there was no apparent proof to support possible horizontal gene transfer in release of GM algae. © 2019 Elsevier Ltd