Phycoremediation is gaining attention not only as a pollutant mitigation approach but also as one of the most cost-effective paths to achieve carbon neutrality. When compared to conventional treatment methods, phycoremediation is highly effective in removing noxious substances from wastewater and is inexpensive, eco-friendly, abundantly available, and has many other advantages. The process results in valuable bioproducts and bioenergy sources combined with pollutants capture, sequestration, and utilization. In this review, microalgae-based phycoremediation of various wastewaters for carbon neutrality and circular economy is analyzed scientometrically. Different mechanisms for pollutants removal and resource recovery from wastewaters are explained. Further, critical parameters that influence the engineering design and phycoremediation performance are described. A comprehensive knowledge map highlighting the microalgae potential to treat a variety of industrial effluents is also presented. Finally, challenges and future prospects for industrial implementation of phycoremediation towards carbon neutrality coupled with circular economy are discussed.