Photosynthetic biogas upgrading using microalgae provides a promising alternative to commercial upgrading processes as it allows for carbon capture and re-use, improving the sustainability of the process in a circular economy system. A two-step absorption column-photobioreactor system employing alkaline carbonate solution and flat plate photobioreactors is proposed. Together with process optimisation, the choice of microalgae species is vital to ensure continuous performance with optimal efficiency. In this paper, in addition to critically assessing the system design and operation conditions for optimisation, five criteria are selected for choosing optimal microalgae species for biogas upgrading. These include: ability for mixotrophic growth; high pH tolerance; external carbonic anhydrase activity; high CO tolerance; and ease of harvesting. Based on such criteria, five common microalgae species were identified as potential candidates. Of these, Spirulina platensis is deemed the most favourable species. An industrial perspective of the technology further reveals the significant challenges for successful commercial application of microalgal upgrading of biogas, including: a significant land footprint; need for decreasing microalgae solution recirculation rate; and selecting preferable microalgae utilisation pathway.