Water pollution due to the discharge of untreated industrial effluents is a serious environmental and public health issue. The presence of organic pollutants such as polycyclic aromatic hydrocarbons (PAHs) causes worldwide concern because of their mutagenic and carcinogenic effects on aquatic life, human beings, and the environment. PAHs are pervasive atmospheric compounds that cause nervous system damage, mental retardation, cancer, and renal kidney diseases. This research presents the first usage of palm kernel shell biochar (PKSB) (obtained from agricultural waste) for PAH removal from industrial wastewater (oil and gas wastewater/produced water). A batch scale study was conducted for the remediation of PAHs and chemical oxygen demand (COD) from produced water. The influence of operating parameters such as biochar dosage, pH, and contact time was optimized and validated using a response surface methodology (RSM). Under optimized conditions, i.e., biochar dosage 2.99 g L−1, pH 4.0, and contact time 208.89 min, 93.16% of PAHs and 97.84% of COD were predicted. However, under optimized conditions of independent variables, 95.34% of PAH and 98.21% of COD removal was obtained in the laboratory. The experimental data were fitted to the empirical second-order model of a suitable degree for the maximum removal of PAHs and COD by the biochar. ANOVA analysis showed a high coefficient of determination value (R2 = 0.97) and a reasonable second-order regression prediction. Additionally, the study also showed a comparative analysis of PKSB with previously used agricultural waste biochar for PAH and COD removal. The PKSB showed significantly higher removal efficiency than other types of biochar. The study also provides analysis on the reusability of PKSB for up to four cycles using two different methods. The methods reflected a significantly good performance for PAH and COD removal for up to two cycles. Hence, the study demonstrated a successful application of PKSB as a potential sustainable adsorbent for the removal of micro-pollutants from produced water.