Global energy demand is rising, fossil fuel prices are rising, fossil fuel reserves are running out, and fossil fuel use contributes to the greenhouse effect. As a clean alternative source of energy to fossil fuels, biomass is becoming more and more essential. Carbon fiber (CF), often known as graphite fiber, is a thin, strong, and adaptable material utilized in both structural (capacity) and non-structural applications (e.g., thermal insulation).Precursors are the raw materials used to create carbon fiber, which is mostly derived from fossil fuels. Because of the high cost of precursors and manufacture, carbon fiber has only found employment in a few numbers of high-performance structural materials (e.g., aerospace). To reduce the price of CF and reliance on fossil fuels, numerous alternative precursors have been studied throughout the years, including biomass-derived precursors including rayon, lignin, glycerol, and lignocellulosic polysaccharides. This study's goal is to present a detailed study of biomass-derived CF precursors and their market potential. We look into the viability of producing CF from these precursors, as well as the state of technology, potential applications, and cost of production (when data are available). We go over their benefits and drawbacks. We also talk about the physical characteristics of CF made from biomass and contrast them with CF made from polyacrylonitrile (PAN). Additionally, we go into bio-based CF manufacturing and end-product concerns, logistics for biomass feedstock and plant sites, feedstock competition, and risk-reduction techniques. This paper offers a comprehensive overview of the CF potential from all biomass sources and can be used as a resource by both novice and seasoned professionals who are interested in producing CF from non-traditional sources.