Rapid industrialization has led to the generation of billions of tons of industry-based waste globally, causing serious environmental damage, leading to global warming, and becoming a threat to biodiversity. Bio-base industrial sludge is another major concern generated during wastewater management, treated and managed typically by incineration or direct landfill disposal, again leading to several environmental, economic, and social consequences. However, the safer bio-based wastewater sludge coming from food and related industries has the potential to convert to biochar or hydrochar through different high-end approaches. Converting sludge into biochar is eco-friendly; it is a method of carbon sequestration that aligns with net-zero targets and has many other eco-friendly applications. This chapter explores the potential of converting this bio-based sludge into biochar or hydrochar by emphasizing its environmental consequences, potentials, challenges, opportunities, and future recommendations.