The rapid growth in plastic production, coupled with inadequate waste management, has led to a significant accumulation of plastic waste in different environments. This raises substantial concerns about long-term ecological impacts, including bioaccumulation in organisms and potential risks to human health. This review focuses on plastic waste-derived carbon materials (PWCMs) and their role in promoting sustainable, eco-friendly energy solutions. The novelty of the study examines the current progress in converting plastic waste into carbon-based materials, with a particular emphasis on recent applications in environmentally sustainable practices, carbon dioxide capture, and green energy solutions. The growing interest in carbon-based materials is due to their unique characteristics, including high specific surface area, porosity, electronic conductivity, stable structure, and versatile surface chemistry. The utilization of PWCMs and their composites has shown promise in absorbing a wide range of contaminants. For organic pollutants, this includes dyes such as methylene blue and pharmaceuticals like antibiotics, polycyclic aromatic hydrocarbons (PAHs), and other endocrine-disrupting chemicals (EDCs). For inorganic contaminants, PWCMs effectively target heavy metals, i.e., cadmium, lead, mercury, and arsenic, as well as anions like nitrate and phosphate. Converting waste plastics into carbonaceous adsorbents holds excellent potential for removing up to 99% of toxic metal elements from wastewater. Furthermore, carbon capture through PWCMs provides an environmentally friendly and practical approach to closing the carbon loop, advancing carbon neutrality, and fostering a more sustainable future. Repurposing waste plastic for hydrogen production has significant potential to contribute to decarbonization efforts and accelerate achieving sustainable development goals (SDGs). The findings also offer valuable insights into the advanced uses of PWCMs, encouraging future efforts in upcycling plastic waste for innovative and sustainable solutions. Yet, a comprehensive evaluation of PWCM applications and their limitations is needed to guide future research toward optimizing their synthesis for economic and environmental sustainability.