One way to mitigate microplastic pollution from pharmaceutical and cosmetic products is to develop nature-based ‘green’ microcapsules. This study involves in situ microencapsulation of therapeutic tea tree essential oil by brown algae-derived alginate biopolymer using classic external ionotropic gelation. The effects of type of divalent crosslinkers (calcium and barium ions), presence/absence of surfactant in oil-in-water (o/w) emulsion and molecular weight of alginate were investigated using gravimetry, scanning electron microscopy (SEM), shear rheometry, ultraviolet (UV) and infrared spectroscopy. Microcapsules were ~ 1 mm in diameter. Barium chloride crosslinker showed highest gel strength (8396 ± 306 Pa) and large pores on surface (59.9 ± 9.1 µm). Presence of surfactant lowered the gel strength (182.6 ± 100.5 Pa) and had smaller pore size (20.3 ± 2.6 µm). Microcapsules with no surfactant, calcium chloride crosslinker and low viscosity alginate showed optimum gel strength (3620.8 ± 141.5 Pa) and smooth surface. An interplay exists between loading capacity (proportional to pore size) and encapsulation efficiency (compromised by surface oil and water-soluble oil components). Life cycle analysis (LCA) shows significant reduction in global warming and ecotoxicity. This project supports eight Sustainable Development Goals (SDG) of United Nations and promotes blue economy.