We report that carbon dioxide (CO<
sub>
2<
/sub>
) can be a significant resource input affecting the cost of algae biomass production on an industrial scale. Improvements in biofuel productivity therefore require characterization of CO<
sub>
2<
/sub>
use efficiency (CUE). RuBisCO saturation with CO<
sub>
2<
/sub>
is an important factor influencing biomass productivity. During CO2 fixation by RuBisCO, fractionation of carbon isotopes occurs, with preferential fixation of <
sup>
12<
/sup>
CO<
sub>
2<
/sub>
, resulting in assimilation of the lighter isotope in algae. This photosynthetic discrimination (?<
sub>
DIC-algae<
/sub>
), approximated by the difference between the ?<
sup>
13<
/sup>
C of external medium and that of algae, is a function of the proportion of CO<
sub>
2<
/sub>
fixed relative to supply. ?<
sub>
DIC-algae<
/sub>
has been applied to the study of photosynthesis in algae over the past few decades and we have adopted the tool to characterize improvements in conditions optimized for biofuel productivity, such as controlled photobioreactors. We report the use of ?<
sub>
DIC-algae<
/sub>
as a tool for characterizing CO<
sub>
2<
/sub>
dynamics and RuBisCO saturation in Nannochloropsis salina CCMP 1776, a benchmark strain in algal biofuels research. We use ?<
sub>
DIC-algae<
/sub>
to describe the conditions under which RuBisCO saturation can be achieved to maximize biomass productivity. Finally, our results suggest that determination of ?<
sub>
DIC-algae<
/sub>
can provide important feedback to support engineering and cultural improvements that can impact carbon use efficiency and biomass productivity.