Microalgal biotechnology has yielded a range of products for different consumer markets, but large scale production for bulk commodities is limited by the cost and environmental impact of production. Nutrient requirements for large-scale production contribute significantly to the cost and environmental impact of microalgal biomass production and should subsequently be addressed by more careful sourcing of nutrients. This study assessed the use of nitrogen and phosphorus contained in effluents from anaerobic digestion of food waste to cultivate the marine microalga Nannochloropsis sp. With suitable dilution, effluent could replace 100% of nitrogen demands and 16% of required phosphorus, without significant impacts on growth or biomass productivity. Additional phosphorus requirements could be decreased by increasing the N:P molar ratio of the media from 16:1 to 32:1. Nannochloropsis sp. accumulated lipid up to 50% of dry weight under N-stress, with significant increases in the content of saturated and mono-unsaturated fatty acids. Using empirical data generated in this study, the cost and environmental impact of nitrogen and phosphorus supply was assessed versus the use of fertilizers for biomass and biodiesel production. Nutrient requirements predicted by the Redfield Ratio overestimating impacts by as much as 140% compared to empirical data. By utilising residual nutrients and optimising nutrient supply, the cost and environmental impact of nitrogen and phosphorus were decreased by > 90% versus the use of artificial fertilizers. This study demonstrates the importance of using empirical data for process evaluation and how anaerobic digestate effluent derived nutrients can contribute to the sustainability of algal biomass production.