<p>The transition toward circular and low-carbon bioeconomy systems requires biomass resources capable of integrating renewable energy production with environmental and agricultural co-benefits. This review systematically synthesizes peer-reviewed literature (2000–2026) to critically evaluate Azolla, a nitrogen-fixing aquatic fern, as a multifunctional biomass platform spanning wastewater remediation, livestock and aquaculture nutrition, anaerobic digestion, compressed biogas (CBG) production, composting and biochar application. The analysis compares Azolla with major perennial energy grasses in terms of growth kinetics, biochemical composition, methane productivity, pretreatment requirements, land-use intensity, nutrient cycling, and lifecycle implications. Evidence indicates that Azolla exhibits rapid biomass doubling (2–5 days), low lignin content (10–15%), high crude protein (20–30% dry basis), and biological nitrogen self-sufficiency, reducing synthetic fertilizer dependence. In constructed wetland and wastewater systems, Azolla demonstrates significant nutrient and heavy metal removal while generating harvestable biomass suitable for downstream valorization. Predominantly laboratory-scale anaerobic digestion studies report methane yields of 0.25–0.35&#xa0;m³/kg VS, with upgraded biomethane purity typically reaching 96–97% depending on the upgrading technology, comparable to grass-based systems but with reduced preprocessing intensity. The review identifies Azolla’s primary strength as systems-level multifunctionality rather than single-output methane maximization. By integrating remediation, feed supplementation, renewable gas production, nutrient recycling, soil enhancement, and climate-smart biochar applications, Azolla emerges as a strategic circular bioeconomy interface. However, pilot-scale validation, standardized lifecycle assessment, and techno-economic modeling remain critical research priorities.</p> Graphical abstract <p></p>