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Hydrogen as an energy carrier becomes more important in a future sustainable energy economy. One regenerative hydrogen production path is photobiological production by green algae “Chlamydomonas reinhardtii”. This organism is proven to produce small amounts of hydrogen under certain conditions only using sunlight and water [1] . To get into competition to other production technologies a new organism, called “Design Cell”, should overcome the handicaps of green algae leading to an improved organism.For cultivation of the microorganisms a photobioreactor system was developed in a laboratory scale. To collect first technical data a system analysis based on the methods of life cycle assessment was conducted to classify the current status of photobiological hydrogen, to identify potentials and to uncover weaknesses. The results were compared with other ways of hydrogen production. To develop the process to large scale applications, hydrogen production rates under sunlight illumination are estimated and a large scale reactor was designed.The assessment showed that the actual hydrogen production rates have to be increased at least by a factor of 100 to get into competition to other technologies. Scale up and sunlight illumination tests showed a lot of optimization potential, but also system limitations for large scale applications.