A challenge of commercial algae cultivation is maintaining a low cost of production. Addition of CO2 is required for algae growth at this scale, and remains a significant cost. Flue gas, exhaust from fossil fuel combustion, is an attractive alternative source of CO2 for algae cultivation because it is abundant, cheaper than conventional sources of pure CO2, and allows for the recycling of CO2 that would otherwise be emitted into the atmosphere. Cellana, a developer of sustainable algae-based nutraceuticals, animal feed and biodiesel, is researching and developing an on-site diesel flue gas CO2-sourced system with commercial potential. This study aimed to evaluate the efficacy of this system in the open pond cultivation of Nannochloropsis oceanica. Growth performance and system cost were compared between algae grown using the flue gas system supplemented with pure CO2 and algae grown exclusively with pure CO2. We were able to establish novel baseline information on CO2 usage for the open pond growth cycle unique to Cellana’s cultivation procedures in addition to identifying several factors that affect CO2 consumption. While the experimental flue gas setup resulted in an 18% reduction in productivity, it only required 4% of the pure CO2 of the control pond to maintain algal growth, directly contributing to cost savings. No significant differences were found in daily biomass or nutrient depletion between treatments. However, residual flue gas heat did cause the experimental pond to experience temperatures exceeding 42°C, potentially reducing photosynthetic efficiency. Further investigation is required to understand what other aspects of flue gas treatment, such as particulates and toxins, may affect algal growth and biomass. The flue gas system presents a considerable cost savings with only a small reduction in productivity, which may be improved with additional research. If modifications to the flue gas treatment and delivery system can produce quality algae with satisfactory growth performance while maintaining cost savings, expansion of the system could possess commercial viability.