We used hydrothermal carbonization (HTC) of wet algal bionias to facilitate.extraction of algal lipids that have value for both liquid biofuels and dietary supplements (i.e., nutraceuticals). HTC of the wet algal slurry produced a solid hydro char that retained more than 85% of the fatty acids in the original biomass and more than 75% of the valuable rimega-3 fatty acid eicosapentaerioic acid (EPA). The mass yield of hydro char was a linear function of the logarithm of the reaction ordinate, which is a measure of the severity of the carbonization conditions. The retained fatty acids could be readily extracted using ethanol, a renewable and food-grade solvent. A total fatty acid recovety of 74% was achieved through this combination of HTC and ethanol extraction. Thus, we herein, demonstrate a process for removing fatty-acid-containing lipids from Wet algae Using only water and a non-petroleum-derived solvent. The recovered lipids include both those titable for making biodiesel or green diesel and those suitable for the human diet.