For bio-oil production, microalgae have higher productivities than oil-seed crops and will likely be used in the future to produce liquid and gas biofuels. Furthermore, biofuel production from microalgae (e.g. marine species) may not compete for arable land or fresh water, which should be reserved for food. Due to economic considerations, open ponds are likely to be the most viable option for large-scale biofuel production. Our aim is to identify areas in Australia which could be used to grow microalgae. A multi-criteria Geographic Information System (GIS) assessment that combines crisp as well as fuzzy selection criteria is used to identify areas in Australia most suitable for large-scale microalgae cultivation. As criteria for land selection, we consider annual rainfall and potential net evaporation, insolation, land-use, soil type, vegetation cover and the energy required to pump sea water to the culture as a fraction of the energy contained in the oil produced (on a per area and time basis). By combining GIS-based outputs of each criterion, we exclude large areas of Australia that are not suitable for microalgae biomass production. We classify the remaining areas into 6 levels of suitability. Although we demonstrate that much less land in Australia is suitable for microalgae culturing than what is generally thought, we conclude that extensive territory can accommodate the total 2700 km² of ponds necessary to suffice the total national diesel demand.