With the rapid increase in solid waste generated worldwide, sustainable approaches for the recovery of resources considering environmental protection are required. As one of the emerging strategies in recent years, biochar has shown great potential due to its high carbon stabilization, adjustable porosity and tunability. This review focuses on the critical assessment of the available technologies for biochar upgrading, with a specific objective of biochar physicochemical functionality improvement and critical materials recovery in line with circular economy targets. We systematically review physicochemical activation methodologies, functionalizations and leaching approaches, accounting for their effects on surface area, porosity and functional group chemistry. Particular attention is paid to the dual functionality of upgraded biochar (i) as a catalyst support for thermochemical processes and (ii) as a medium for the recycling of essential nutrients (e.g., phosphorus, potassium, magnesium, calcium). It is evidenced that customized activation can further improve its adsorption and catalytic efficiency as well as promote near-total nutrition extraction. This review positions advanced biochar as an enabling multipurpose technology across sustainable material production, nutrient cycling and waste valorization in the circular bioeconomy.